The New Republic

Everybody knows how much contempt conservatives show for Hillary
Clinton whenever she talks about health care. But people tend to
forget how much liberals have been deriding her, too. It was just a
few months ago that Michael Moore attacked her in Sicko, alleging
that campaign contributions from people in the health care business
had made her a tool of that industry. Last week, when asked about
Clinton and health care, John Edwards made a similar charge,
pointedly noting that, "in order to have universal health care, you
have to be willing to take on ... insurance companies, drug
companies, and their lobbyists." In other words, he would deliver
what Hillary could not.By unveiling a new health care plan last week that did, in fact,
promise to cover every single American, Clinton put to rest the
worst of these suspicions. But, even after last Monday's
blockbuster roll-out--which provoked a press frenzy rare for what
was, after all, a policy speech--questions remained. It is one
thing to put these ideas on paper. But just how serious is she about
them, particularly given all her talk about the "scars" she has
from 1993 and 1994, the "lessons" she learned from that episode,
and the need for "consensus" this time around? If compromise is
necessary, then what, specifically, is she willing to compromise
away? Enacting universal health care is bound to mean waging some
fights. Is she really willing to do that--and which fights will she
pick?

Those were the questions I hoped to ask Clinton in a telephone
interview a few days after the announcement--although, truth be
told, I didn't expect many answers. Mine was one of a series of
interviews she was doing during the week, leading up to a string of
appearances on five Sunday morning talk shows. By the time I talked
to her, she had already dispensed plenty of carefully calibrated,
almost perfectly anodyne, statements: "I've learned some valuable
lessons"; "This is not a government-run health care system"; "I
know how important it is to work with the Congress."

The start of my interview played out the same way. To a question
about when she had first sat down to seriously discuss with her
staff what this new plan would look like, she gave the boilerplate
version of her health care resume: "I've been committed to
universal health care for fifteen years. When we weren't successful
after '93 and '94, I kept working to try to expand coverage"- -and
so on. But then she shifted gears, and, over the next few minutes,
as we discussed both the details of what she had proposed and her
ideas about how to make it law, she gave some answers I hadn't
expected. In the process, she put to rest many of my lingering
doubts while demonstrating what may be her strongest assets as a
champion of health care reform: her unrivaled mastery of the
subject and her savvy sense of how to move a proposal through
Congress.

Does this mean Clinton is the best candidate on health care? Not
necessarily. But it may help explain why she's running such a
strong campaign among Democratic primary voters right now. The
assumption going into this race was that Clinton would position
herself as the centrist alternative to her chief rivals, Edwards
and Barack Obama. But on health care, which has emerged as the
campaign's top domestic issue, she's positioned herself as far to
the left as they have--offering a plan of similar reach and
pledging to push it with similar political will--while managing to
stay within the boundaries of what passes for mainstream political
debate. You could say this reflects a welcome and politically
viable consensus on how Democrats should approach health care in
the coming years--or, if you're disappointed in the substance of
what she's proposing, you could say it reflects a failure by both
Edwards and Obama to stretch the boundaries of debate further.
Either way, though, it means she's winning over liberal primary
voters even as she positions herself for both the general election
and--should she win-- a battle to actually enact health care
reform. That's no small feat.

It's not hard to see how the 1993-1994 debacle shaped Clinton's
thinking on health care--and, in certain critical ways, how it
reduced her ambitions. Most notably, she has decided against
blowing up the existing health care system, even though there's a
pretty good case for doing so on the merits. As she learned the
hard way in 1993-1994, starting from scratch would force the
majority of Americans to switch coverage, thereby scaring the very
large portion of the U.S. population that already has some form of
insurance and likes it. So, this time, Clinton is doing her best to
reassure those folks. If you have health insurance and you're
pleased with it, she says, that's fine-- you get to keep it. But,
if you don't have insurance or you don't like the coverage you
have, then you could buy new insurance on your own. You would do it
through a purchasing pool set up and maintained by the government--
selecting from a choice of plans in much the same way federal
workers and employees of large companies do now. You'd get the same
sort of benefits these people get: No insurer could deny you
coverage or charge you more because of your medical conditions, and
the prices would be more affordable because of the relatively low
overhead. And, if you were still too poor to afford this coverage,
the government would give you financial assistance while continuing
to make Medicaid and other safety-net programs available to the very
poor.

This might like seem like precisely the sort of plan that would
disappoint at least some traditional supporters of universal
coverage--namely, those who believe the best systems are those run
directly by the government, or so-called "single-payer" systems.
That's because the new Clinton scheme assumes most working-age
people will continue to get private health insurance. (To many
single-payer advocates, this was precisely the problem with the old
Clinton scheme, too: It relied on private insurers, not the
government, to deliver coverage for most people.) But there's
another wrinkle in Clinton's proposal. Among the insurance options
she'd make available to people would be a plan run by the
government, perhaps using the basic Medicare model. The idea would
be to let this public program operate alongside the private
ones--in effect, competing with them for business. If the public
program were as efficient and popular as advocates of public
insurance believe it will be--and, for the record, I'm one of those
advocates--then, over time, it would attract more and more people,
naturally evolving into a single-payer system.

None of this makes Clinton unique among her rivals. Both Edwards,
who unveiled his plan in February, and Obama, who introduced his in
May, offer essentially the same deal to the insured-- allowing them
to keep their coverage while the government constructs and oversees
a new system for everyone else. Both Edwards and Obama also have
public insurance options that open a door to single-payer--a model
that bears the intellectual fingerprints of Yale professor and
sometime tnr contributor Jacob Hacker, who has met with all three
campaigns. Clinton's plan does have one key difference with Obama's:
She would require everyone to get some kind of coverage, a
requirement known as an "individual mandate." Obama decided against
calling for a mandate initially, preferring to wait and see whether
it was really necessary for achieving universal coverage--and until
he knew for sure that insurance would be affordable for everyone
required to buy it. But, while that's not a minor difference, in
the grand scheme of things it's not a colossal one, either.
Meanwhile, the differences between what Clinton proposed and what
Edwards proposed are downright miniscule. In fact, the plans are
virtually identical.

The lack of huge substantive differences in these plans makes it all
the more important to figure out which candidates will push their
proposals with maximum determination. And, here, Edwards has set a
pretty high standard. Not only was he the first major candidate to
put forward a serious plan to cover every American; he has also
made clear it's his top priority by, among other things, pledging
that he would pursue universal coverage even if it meant postponing
some progress on deficit-reduction. Obama, too, has cautioned that
health care expansions may have to come before complete budget
balance. But, it turns out, Clinton pretty much shares this view.
While she told me she is determined to make some progress on
reducing the deficit--she very deliberately did not use all of the
savings from President Bush's expiring tax cuts to pay for her
plan--she agrees that establishing universal health care may have
to precede balancing the budget outright, if only because you can't
do the latter until you get medical costs (which drive up the price
of government programs) under control. "I think we've got to begin
making a down payment on fiscal responsibility, but it has to come
over time," Clinton said. "If you don't get . .. quality,
affordable care to everybody, you can't realize a lot of the
savings that will help you with deficit-reduction, with Medicare,
Medicaid, and other programs."

Although Clinton constantly invokes the need for having an open mind
while dealing with former adversaries in Congress, she also says
that universal coverage is a core principle with which she's not
prepared to part. "We have to remain committed to the goal of
quality affordable care for everybody," she told me. "That has to
be one of those principles that we'd take into whatever the
negotiations are." Similarly, for all of Clinton's talk about
consensus, she's not particularly tolerant of the insurance
industry--or, at least, the way it practices business now.
"Remember," she said, "this is an industry that spends

$50 billion a year excluding people, either altogether, by denying
them coverage, or by denying them care that they need."

Clinton leaves open the possibility that the industry could retool
itself so that insurers compete on cost and quality rather than on
their ability to pick out the most healthy beneficiaries (the way
they typically do now). This was, she explained during the
interview, a new "business opportunity" just waiting for smart
companies to take advantage of it. But she also seemed to recognize
that doing so runs against the nature of many insurers today--noting
that even some of the industry's erstwhile allies in the corporate
world are getting fed up. "I think there's an awareness," she said,
speaking of CEOs she's met, "that the health insurance industry is
not working in a way that makes economic sense for the rest of the
economy--and I think that's a revelation for them."

That's a clever rhetorical construction: It pits the interests of
the business community against the interests of the insurance
industry, effectively splitting the traditional opposition to
universal coverage. And it may hint at the political strategy
Clinton intends to pursue if she gets elected. While she isn't
signaling compromise on universal coverage or going soft on
insurers, she is embracing business--constantly invoking the wisdom
of CEOs, talking up the need to establish partnerships with them,
and tailoring her proposal with their companies' needs in mind.
Clinton would require all larger firms to contribute toward their
workers' health benefits. But she would let these firms provide
workers with coverage directly (rather than simply pay a tax) if
that's the company's preference--because, she notes, even CEOs
frustrated with rising benefit costs "still want to have control."
Firms with fewer than 25 employees would be exempt from the
requirement to pay for health insurance, although, if these firms
did offer their workers insurance, they would get a tax credit.

That last part seems to be a unique feature of Clinton's plan;
neither Edwards nor Obama have indicated they would let firms with
so many employees off the hook (although they would give those
firms access to much cheaper insurance than they can get now). And,
substantively speaking, that's a serious concession. According to
Professor Jonathan Gruber of MIT, such a large exemption concedes
about two-thirds of the total available revenue from employers. In
other words, Clinton gives up a large pot of money--money necessary
to finance the subsidies for low-income people--that she then must
find elsewhere. (She finds most of it through efficiency gains.)
Clinton's advisers say the difference isn't as stark as it seems,
since most other proposals would end up easing at least some of the
burden on small businesses-- generally by exempting or subsidizing
the very smallest employers. Whatever the impact in terms of
dollars, though, the decision to avoid slapping small- business
owners with a requirement to pay for health care seems to be
primarily political. The small-business lobby played a pivotal role
in bringing down the old Clinton plan. And, while some of this
opposition reflected nothing more than ideology, much of it stemmed
from that plan's small-business mandate. In one of the most
memorable episodes of that fight, the U.S. Chamber of Commerce
effectively reversed itself--backing out of a planned endorsement of
a mandate on business--because a rival organization, the National
Federation of Independent Business, was winning over members who
wanted no part of such a requirement.

Taken together, these moves suggest a divide-and-conquer strategy,
in which Clinton would try to pry the business community from the
ranks of the determined opposition. And this may reflect the
influence of Clinton's uniquely experienced advisers. All three
Democrats have turned to the same informal network of health-care
experts for ongoing counsel--people like Gruber and Hacker and the
New America Foundation's Len Nichols. And all three candidates have
smart people working exclusively for them. But it was Clinton who
inherited the senior staff from her husband's White House, including
Chris Jennings and Gene Sperling, who spent years figuring out how
to navigate legislation through a hostile Congress. (Whether that
experience is helpful today depends, admittedly, on just how good
you feel about the old Clinton era.)

Of course, the degree to which Hillary relies on these and other
advisers is open to question. "A lot of people ask me, who is
Senator Clinton's closest health adviser," says Nichols, who was
first called to brief her about two years ago. "The truth is,
Senator Clinton does not really need a lot of health advising. ...
She has what we health policy wonks do for a living down cold."

Make no mistake, Clinton still carries into the fight on health care
plenty of political liabilities, starting with her lack of sheer
oratorical talent. She can't exude passion and empathy the way
Edwards (or her husband) can; she can't convincingly offer soaring,
transformational rhetoric like Obama. Those are no small things,
given the necessity of rallying public support to overcome hostile
special interests. Moreover, Clinton starts with a greater reservoir
of ill will than either one of her rivals. Consider a recent Zogby
poll commissioned by Forbes Small Business. The poll asked
small-business owners about their attitudes on health care reform
and discovered a discernible turn to the left. Not only was the
cost of health care their top political concern, but a plurality,
34 percent, said they thought the best solution was to have the
government step in and somehow make sure everybody got insurance.
"Small- business owners normally fear and loathe the government,"
John Zogby, whose polls have tracked small business owners since
2000, told the magazine. "But, in this instance, we could be at a
tipping point caused by health care insecurity." That's good news
for fans of universal health care, but not, as it turns out, for
Clinton--because, when Zogby asked about presidential candidates,
she finished first in both the "least favorite candidate" and the
"least likely to do something for small business" categories. And
which Democrat did they feel was most likely to help small
business? Edwards. Obama, meanwhile, fared better than not only all
other Democrats but also the leading Republicans in the
favorability category.

Then again, Clinton has already proven capable of winning over fans
in surprising quarters. On The New York Times op-ed page last week,
the accolades for her health care plan from David Brooks were no
less strong than those from Paul Krugman. E.J. Dionne had only good
things to say about her in The Washington Post, which perhaps isn't
so surprising. But Brit Hume was also praising her on Fox News,
which most certainly is. The rap on Hillary Clinton has always been
that she lacks her husband's political dexterity. But, too often
during the 1990s, Bill's trademark triangulation succeeded only in
angering both sides of the political divide. With her health care
roll-out, Hillary has done the opposite: generated serious
enthusiasm from observers across the ideological spectrum. If she
can keep that up, she'll go very far indeed.

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