Hillary and Health Care, Again

Thirteen years after the spectacular defeat of HillaryCare, Hillary Clinton is releasing her health-care plan today, as ABC reports, she’s trying to portray that failure as a positive experience. Meanwhile, on the policy end, the Wall Street Journal reports that her proposal:

… is expected to require all Americans to get health insurance. It is a concept that has evolved quietly in recent years and, unlike most ideas for health reform, enjoys support across the political spectrum.

The thrust is to get everyone into the health-insurance pool so that healthy people, who are cheap to cover, help balance out the sick, who are expensive. One of Sen. Clinton’s top aides says that it is impossible to achieve universal coverage without this requirement…

Clinton, somewhat like Romney (although Romney seems not to want to do it at the federal level), wants to treat health insurance like driver’s insurance, leaving its implementation to private insurers but requiring everyone to buy it. The problem is that it’s not a fair comparison: You can choose not to drive, but you can’t choose not to live. Thus, the mandate becomes, more or less, a type of tax–a legal requirement that everyone in the country has to shell out.

Moreover, as I’ve noted here before, individual mandates are tough to to enforce. One wonders, as with John Edwards’ idea that we should be required to go to the doctor, how, exactly, Clinton plans to make sure that everyone buys a plan. Who’s going to go door-to-door and ask to see insurance cards? What’s going to happen to the guy who shows up at the hospital without one? The mandate doesn’t even work so well for driving, which is supposed to be the model: In 2004, more than 14% of drivers hit the roads without insurance. And that number represents a rise in uninsured on the road, meaning the problem is getting worse, not better. What makes Clinton and the rest think it will be solvable with health care?

There’s also the issue of effectiveness. Many supporters of the universal mandate argue that it’s intended to resolve problems with uncompensated care–basically, uninsured folks showing up at emergency rooms and free-riding off the system. But, writing for Cato, CSU economics prof Glen Whitman is skeptical:

Supporters of the individual mandate rely heavily on the problem of uncompensated care. People who lack health insurance nevertheless receive health care in this country, because hospitals and health care providers are unable or unwilling to turn them away. When recipients don’t pay for their care, the rest of us end up footing the bill one way or another. Individual-mandate advocates contend, plausibly enough, that we should make the free riders pay for themselves.

But how big is the free-rider problem, really? First, we should note that not all free riders are uninsured. In fact, people with insurance consume almost a third of uncompensated care. Second, not all care received by the uninsured is paid for by others. Analysts at the Urban Institute found that the uninsured pay more than 25 percent of their health expenditures out of pocket.

So how much uncompensated care is received by the uninsured? The same study puts the number at about $35 billion a year in 2001, or only 2.8 percent of total health care expenditures for that year. In other words, even if the individual mandate works exactly as planned, it will affect at best a mere 3 percent of health care expenditures.

Doesn’t sound like much a solution to me.