The Costs of Health Care Reform

October 31, 1993

For White House spin doctors, Donna Shalala's testimony that 40 percent of the American people will pay more for medical insurance under the Clinton health care plan must have been as welcome as a dose of castor oil. That the Health and Human Services secretary was being candid and merely reiterating, with minor changes, estimates presented earlier by Hillary Rodham Clinton was beside the point. Her message clearly upstaged Bill Clinton just as he came to Baltimore Thursday to begin a year-long selling job on the massive legislative proposal he had given Congress the day before.

Congress does have an institutional memory, and what it remembers is what happened after it passed the Medicare Catastrophic Coverage Act of 1989. Even though Medicare recipients were to receive a better benefits package under the statute, the fact that their monthly premiums would go up marginally set off a political firestorm that forced Congress into headlong retreat the following year.

Citizens may be confused by the complexity of the health-care issue and the obtuse jargon it spawns, but they do understand what hits their wallets. It was no surprise when the president and his first lady stressed only the benefits and skipped over the costs during their dramatic presentation of the health-care reform bill on Capitol Hill. But what was intriguing was the silence of critics on this key feature even as they assailed the Clinton plan from many other angles. Could it be they realize any alternative that delivers on the promise of universal coverage and cost containment will also hit the wallets of millions of voters?

Any change in the dynamics of an industry that accounts for one-seventh of the U.S. economy will create winners and losers. Politics being what it is, legislators know they will hear a lot more from the latter than the former. So if Congress is actually to pass a reform bill before election day next year, it is bound to be skittish about any repeat of the 1989 Medicare catastrophe. Senate Finance Committee chairman Daniel Patrick Moynihan has remarked that Americans are not very good about spending their own money either as a "civic duty" or even to get greater benefits.

With the issue that will define the Clinton presidency now in the hands of Congress, months of debate, horse-trading and posturing have begun. Lawmakers will be looking over their shoulders at opinion polls, which in the end could prove decisive. While public support for the Clinton plan is declining as its details emerge, a Wall Street Journal/NBC Poll shows that Democrats are considered better health-care stewards than Republicans by a big margin of 44 percent to 16 percent. If Mr. Clinton can hold onto such a margin in an improving economy, Washington's expectation that some real reform will be enacted may come to pass.

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