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When Richard Gephardt unveiled his plan for near-universal health
coverage in April, one of the sharpest rebukes came from fellow
Democratic presidential candidate Bob Graham. "The problem I have
with Congressman Gephardt's proposal is we tried that before,"
Graham said during an appearance on ABC's "This Week." "That is
what President Clinton and Mrs. Clinton tried to do in 1993 and
1994. And what we found was that the health care system in the
United States is so complex, and there's so many groups that have a
vested interest in the status quo, that it just fell apart."Actually, Graham got it exactly wrong. You can say a lot of things
about Gephardt's plan: that it would cost too much, that it
wouldn't wring out the system's inefficiencies, that it wouldn't
improve the quality of care. But one thing you can't say is that it
looks anything like the Clinton plan. Clinton, after all, wanted to
abolish most employer-based insurance and create an entirely new
health care bureaucracy in its place. Gephardt wants to preserve
job-based insurance for those who have it while obtaining it for
those who don'tin effect, leaving the system exactly the way it is
now.

As Gephardt sees it, trying to do anything more radical would doom a
plan to failure: "You've got to have something that can pass," he
recently told columnist Matt Miller. And Gephardt is hardly alone
in thinking this. As of this writing, three of the major Democratic
candidates for presidentGephardt, Howard Dean, and John Kerryhave
unveiled ambitious, detailed proposals for making health insurance
more available. The other threeGraham, John Edwards, and Joe
Liebermanhave indicated they'll soon do the same. But, while the
candidates' visions differ in shape and scope, they share a common
political premise: reviving Clintoncare would be a big mistake.
"We've learned from that, " Dean said on NBC's "Meet the Press"
last year. "We've learned that we cannot radically reform the
health care system."

Unfortunately, political realism doesn't always produce the best
policy. The reason the Clinton plan was so complicatedand
ultimately so unpopularwas that it made difficult trade-offs in an
effort to solve the health care system's myriad, interconnected
problems: Clinton was determined to both expand coverage and hold
down costs, to help people with insurance as well as those without
it, to give consumers more power while still reducing their
consumption of excess care. No plan now under discussion harbors
similar ambitions. Indeed, none of the plans proposed by the major
candidates would actually achieve "universal" coveragethat is,
making sure every American has insuranceeven though the candidates
frequently cite that as their goal.

Nevertheless, there's still something to be said for what the
Democrats are proposing. Each of the six major candidates has
called for repealing at least some of the Bush tax cuts; now it
looks like each of them wants to spend at least some extra money on
subsidizing health insurance for those who can't afford it. That's
a direct transfer of government money from people who don't need it
to people who do. While none of the major candidates would make the
health care system perfect, all would make it better, far better
than would George W. Bush.

One way to think of each plan is as a near-perfect distillation of
its author's character and experience. That's certainly true of
Gephardt's proposal. Gephardt was House majority leader back in
1994, and he remembers all too well how employers, insurance
companies, and other groups with something to lose from reform
killed the Clinton plan. Rather than confront those special
interests all over again, Gephardt now proposes to buy them off.

The first step in Gephardt's plan is requiring all businesses to
provide their employees with health insurance. Normally, such a
requirement, known as an "employer mandate," would be anathema to
business lobbies. But Gephardt sweetens the pill by offering
companies tax credits worth 60 percent of their insurance
costseffectively doubling the existing government subsidy for
employee health insurance. In theory, companies that don't currently
provide insurance could suddenly afford to do so; those that
already provide insurance would see their costs decrease
dramatically. Employees, in turn, would benefit from higher wages
and more stable coverage. (The only people left out would be the
unemployed; Gephardt would assist them through expanded state
programs such as Medicaid.) Even private insurance companies would
make out well under this scheme since they'd end up with a lot more
business. In the end, Gephardt says, he'd extend insurance to about
30 million additional people, or about three- fourths of the
uninsured population, while stabilizing coverage for those who
already have it.

It all sounds lovelyuntil you see the price tag. To finance his
plan, Gephardt would have to repeal all of the Bush tax cuts. That
means rescinding not just the parts that primarily benefit the
wealthy (like elimination of the estate tax) but also those parts
that benefit the poor and working class (such as the increase in
the child tax credit). Gephardt says he relishes a fight pitting
tax cuts against health insurance. But, in proposing a scheme that
rescinds tax breaks for individuals in order to finance what looks
like tax breaks for businesses, Gephardt invites political attacks,
such as the one Edwards launched during the South Carolina debate
in early May: "That's taking money that people desperately need and
giving it to ... the very people that we've had trouble with. ...
It feels like saying, 'You're in good hands with Enron.'"

In fairness to Gephardt, the Edwards attack was pretty misleading:
Most economists believe tax credits for health insurance generally
pass through to workers in the form of higher salaries or better
benefits. That's one reason why Gephardt touts his plan not just as
a health care reform but as a stimulus, too. "Gephardt's plan is
actually a lot less expensive to society as a whole than it seems,"
says Len Nichols, vice president of the Center for Studying Health
Systems Change. "It's just substituting public dollars for private
dollars we're already spending on health care."

A better criticism of the Gephardt plan focuses on what it doesn't
do. Because the tax credit is good no matter how expensive health
insurance gets, it means employers and consumers would have even
less incentive than they do now to seek out cost-effective health
insurance planswhich would likely contribute to wasteful medical
spending. Problematic, too, is the fact that, although business
makes out well under Gephardt's plan, there's no guarantee the
business lobby will support it politically. (Back in 1994, large
employers and insurance companies would have probably benefited
from the Clinton health care plan. But they turned on it with fury
nonetheless.) Finally, the Gephardt plan doesn't leave much room
for financing other government priorities. Unless Gephardt is
willing to run up huge deficits or raise taxes, he'll have no
significant new money for schools or homeland defense. Nor can he
shore up Social Security and Medicare.

Dean considers himself a hard-line fiscal conservative, which helps
explain why he never considered anything as expensive as what
Gephardt is proposing. But, like Gephardt's, Dean's proposal is
very much a product of his own experience fighting for health care
in the '90s.

While Clinton was busy trying to sell Washington on his "managed-
competition" scheme, Dean was proposing a similar system for
Vermont. But, when Dean's crusade met the same miserable fate as
Clinton's, he didn't give up. Instead, Dean concentrated on
incremental coverage expansions using the programs that already
existed: Medicaid and the State Children's Health Insurance
Program, known as s-chip. By the time Dean was done, nearly every
child in the state was eligible for some sort of coverage. When Dean
began running for president, he indicated that he'd base his health
care proposal on the programs that had served him so well in
Vermont.

Kerry's health care proposal is the product of a different sort of
journey. Kerry is a relative stranger to health care issues;
although his voting record would make any liberal proud, he's been
neither a major player on Capitol Hill (like Gephardt) nor a major
innovator at the state level (like Dean). But, in his run for
president, Kerry has become the candidate of the Democratic
establishmentthe successor to Al Gore. So he has been able to
assemble a seasoned circle of advisers that represent the
Democratic Party's best and brightest on health care, including
veterans of the 2000 Gore campaign (Sarah Bianchi), the 2000
Bradley campaign (David Cutler), and the Kennedy Senate staff (Nick
Littlefield).

These experts have steered Kerry to the same approach Dean favors:
expanding state-run insurance to cover the poor and near-poor, then
opening up the Federal Employees Benefits Programthe system that
covers federal workers and members of Congressto everybody else
without insurance. (Technically, Dean would actually create a
separate plan called the "Universal Health Benefits Program," but
it's the same basic idea.) The poor would end up in state-managed
insurance, which has proved pretty successful over the years.
Meanwhile, people higher up the income ladder who don't get
insurance through their jobs could select from a menu of private
plansthe same menu from which federal workers now chooseallowing
them to buy insurance at affordable "group" rates. (Since some
people still couldn't afford these rates, Dean and Kerry would also
use tax breaks to offset the cost.)

The plans are not identical. Dean is more aggressive when it comes
to the working poor: He guarantees staterun insurance to children
under 300 percent of the poverty line but defines children as
anybody under 25. That's good for public health since it means
providing comprehensive coverageincluding prenatal careto more
women in their child-bearing years. Kerry, by contrast, has
thoughtfully included what's known as a "reinsurance" scheme, under
which the government would assume financial responsibility for the
most expensive patients, who constitute a small minority of the
population but a significant share of overall health care costs,
thereby lowering premiums. But features such as these represent
relatively modest differences; either candidate could incorporate
them later on. What's important about the plans is what they have
in common: Both would apparently expand insurance coverage by nearly
as much as Gephardt's plan would, but they would do so for less
than half the price.

The problem is Dean's and Kerry's plans could be tough sells
politically. For starters, the Dean-Kerry approach does a lot less
for people who already have insurance: Under Gephardt's scheme,
somebody who already has employer- provided health insurance would
probably see his paycheck increase; under Dean's or Kerry's plan,
he'd probably see no immediate change. Indeed, since most of the
money in the Dean and Kerry plans is spent providing insurance to
those who don't already have it, many voters might see it as
welfarea charge that hurt Clinton's plan.

The Dean and Kerry schemes are also maddeningly complex. Kerry's
"reinsurance" plan will go over great at the Brookings Institution,
but try explaining it on a 30second TV ad. And, while the essence
of Dean's plan is building on existing programsparticularly, the
Federal Employees Benefits Plan and s-chiphe has inexplicably given
their new incarnations new names, the "Universal Health Benefits
Program" and "Family and Children Health Insurance Program," each a
mouthful of unnecessary complication. Indeed, on a media conference
call shortly after his major health care speech in April, Dean
stumbled over its details and had to refer questioners to his policy
advisers for clarification.

While the other candidates haven't made their plans public, it seems
likely they will neither be as expensive as Gephardt's nor as
complicated as Dean's and Kerry's. Instead, Edwards, Graham, and
Lieberman will probably call simply for expanding state-run
programs, such as Medicaid and s-chip, with lower spending than the
others. That would mean helping fewer people.

Perhaps because Democratic activists crave bolder action than these
limited extensions suggest, all three men have been trying to
change the subject, bringing the conversation around to the issues
they know best. Press Edwards about health care, and he invariably
responds by talking up the issues he dealt with as a trial lawyer
and has worked on in his brief senatorial career: HMO reform and
medical-malpractice laws. Ask an adviser to Graham about health
care, and chances are you'll hear about Medicareand Graham's record
of protecting it for Florida seniors. In mid-May, when the press
started writing about the other candidates' plans, Lieberman
decided to make his own major policy speechonly, instead of
focusing on increasing access, he proposed increasing government-
sponsored medical research, a longtime interest.

Whatever the merits of these ideas, all three candidates are missing
the point. The reason health care is a lively topic today isn't
that people are upset about malpractice laws or that doctors still
haven't cured cancer. It's that, at a time of rising insurance
premiums and declining job security, people worry whether they can
continue to afford health coverageor, in the case of the uninsured,
whether they can get it at all.

Then again, the ultimate standard of comparison isn't Edwards versus
Dean or Graham versus Gephardt; it's the eventual nominee versus
President Bush. And that's a much clearer call. Bush's lone
proposal to help the uninsured consists of a tax credit too small
for many people to buy a decent policy. And, while Bush grudgingly
signed off on a modest increase in Medicaid funding for this yearin
order to get his tax cut through Congresshe favors a reform plan
that would, over time, dramatically reduce the federal commitment
to Medicaid, almost certainly leading to even greater numbers of
uninsured Americans. Reasonable people can disagree about which
Democrat has the best plan, but nobody can dispute that, when it
comes to helping the uninsured, they'd all do a better job than the
guy who's in the Oval Office today.

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