The Market Is the Answer

Sen. Hillary Clinton's new health reform proposal promises more choice, lower costs and no new government bureaucracies. But the rhetoric doesn't match the reality.

The 10-page outline the New York Democrat released Monday is short on the sort of details that filled the 1,342-page bill she developed 14 years ago, but like that earlier proposal, this also provides countless opportunities for government micromanagement of the health sector. New bureaucracies inevitably will be required to run it, and new taxes to finance it.

The centerpiece of her plan to achieve universal health coverage would require everyone to have health insurance, and she would require businesses to pay a significant share of the costs. This "individual mandate" inevitably means that government would decide what kind of health insurance we must have, what must be covered and what penalties we will face if we don't comply.

Small businesses would get a tax credit to help pay for worker coverage, but only if they offer government-defined coverage and pay a government-determined share of the premiums. She also would expand Medicaid and the State Children's Health Insurance Program and create a new Medicare-like program. Her plan would regulate health insurers until they become little more than government-managed utilities.

To her credit, she includes an idea long-promoted by conservatives to offer refundable tax credits to help those at the lower end of the income scale afford coverage. But she misses an opportunity to allow health insurance to become portable by freeing up the tax subsidy that ties health insurance to the workplace for 175 million Americans.

The United States could be a leader in developing health insurance that is better suited to a mobile and information-savvy 21st century workforce. Allowing greater competition in the health insurance industry would lead to more affordable premiums. Giving consumers a greater incentive to shop for value would put power in the hands of doctors and patients, not government. Market-oriented reforms, coupled with assistance for those at the lower end of the economic scale, would be a far better solution.

Grace-Marie Turner is president of the Galen Institute, a public policy research organization based in Alexandria, Va., that focuses on free-market ideas for health reform.

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Sen. Hillary Clinton's new health reform proposal promises more choice, lower costs and no new government bureaucracies. But the rhetoric doesn't match the reality.

The 10-page outline the New York Democrat released Monday is short on the sort of details that filled the 1,342-page bill she developed 14 years ago, but like that earlier proposal, this also provides countless opportunities for government micromanagement of the health sector. New bureaucracies inevitably will be required to run it, and new taxes to finance it.

The centerpiece of her plan to achieve universal health coverage would require everyone to have health insurance, and she would require businesses to pay a significant share of the costs. This "individual mandate" inevitably means that government would decide what kind of health insurance we must have, what must be covered and what penalties we will face if we don't comply.

Small businesses would get a tax credit to help pay for worker coverage, but only if they offer government-defined coverage and pay a government-determined share of the premiums. She also would expand Medicaid and the State Children's Health Insurance Program and create a new Medicare-like program. Her plan would regulate health insurers until they become little more than government-managed utilities.

To her credit, she includes an idea long-promoted by conservatives to offer refundable tax credits to help those at the lower end of the income scale afford coverage. But she misses an opportunity to allow health insurance to become portable by freeing up the tax subsidy that ties health insurance to the workplace for 175 million Americans.

The United States could be a leader in developing health insurance that is better suited to a mobile and information-savvy 21st century workforce. Allowing greater competition in the health insurance industry would lead to more affordable premiums. Giving consumers a greater incentive to shop for value would put power in the hands of doctors and patients, not government. Market-oriented reforms, coupled with assistance for those at the lower end of the economic scale, would be a far better solution.

Grace-Marie Turner is president of the Galen Institute, a public policy research organization based in Alexandria, Va., that focuses on free-market ideas for health reform.

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About the author