Grading the Candidates

I served as one of the judges for the National Journal’s recently published report card on the health plans of the leading Democrat (Clinton, Edwards and Obama) and Republican (Giuliani, McCain, and Romney) presidential candidates.

In some cases, my scores differed substantially from those of the other judges.  Apparently, some of them have not been carefully reading these Health Alerts.  Anyway, here is my take:

Most Radical:  McCain by a long shot.  He would completely replace our arbitrary, regressive, wasteful system of tax subsidies for private health insurance with a $2,500 refundable tax credit for everybody ($5,000 for couples).  By contrast, the leading Democrats would not repeal a single existing subsidy; they just add new ones. (That is why their plans are so costly.)

Most Expensive:  Clinton and Edwards.  By their own reckoning their plans would cost more than $1,000 per year for every household in America.  Obama, a mere piker, comes in at only half that amount.

Most Oppressive:  Edwards.  All three Democrats would force people to buy insurance, whether they want to or not.  Mandates of one sort of another would be imposed on individuals and/or small businesses and/or large  businesses.  Edwards (a true believer in the nanny state as well as a nanny health care system) would even mandate preventive medicine. (You veel get your mammogram!)

Least Coherent:  Hillary.  The Democratic Party is full of people who are dead certain they know how to reform health care.  Unfortunately, they don’t agree with each other.  Some want socialism (Medicare for everybody).  Some want to keep their current employer plan.  Some want the health system available to members of Congress.  Hillary’s answer:  All of the above.  Everybody can pick and choose.

Most Loyal to Bush’s Vision:  Giuliani.  He endorses the idea of a standard health insurance deduction that is independent of the amount people spend.  Economists love this idea, because it eliminates perverse incentives in the current system.  (No one could lower his taxes by buying more insurance.)  Unfortunately, voters haven’t a clue what this means.

Least Loyal to his Own Vision:  Romney.  He enters the contest with a huge advantage.  He engineered a bi-partisan plan to credibly create universal coverage in Massachusetts. (Compare that to Hillary’s failed reform.)  So what does Romney do when he gets in front of primary voters?  Pretends it never happened.

Now let’s turn to the questions of cost, quality and access.  Regular readers of Health Alerts will not be surprised to learn that the results are disappointing.

Problem of Cost.  If you agree with me that we cannot control costs unless someone is forced to choose between health care and other uses of money, then the Democratic plans are a disaster.  They don’t even mention Health Savings Accounts and all leave the impression that ideal health insurance is first dollar coverage.  To make matters worse, Clinton and Edwards would inject an additional $1 trillion-plus dollars into the system over the next 10 years.

All three Republicans endorse HSAs, which encourage cost control despite all the defects in their current configuration.  Romney is most explicit about endorsing complete HSA flexibility – which would greatly expand their use and their impact.  Unfortunately, Romney offsets these advantages with an aberrant idea – the deductibility of all out-of-pocket spending.  (This is a virtual invitation to all taxpayers to spend, spend, spend!)  McCain gets the edge from me here because he completely removes the incentives to overinsure and appears to back the concept of a flexible HSA.

Problem of Quality.  If you agree with me that substantial quality improvements are not possible unless providers compete for patients based on price (and therefore on quality), then again the Democratic plans are a disappointment.  None of them envision patients paying a real price for anything.  To make matters worse, they all to one degree or another endorse managed competition – a system under which health plans have an incentive to overprovide to the healthy and underprovide to the sick. (More on that in a future Health Alert.)  Unfortunately, there is no guarantee that the Republicans will not also succumb to the allure of this faulty idea – as Romney did in Massachusetts. The redemption for the Republicans is HSAs.  To the degree patients manage their own health care dollars, they will force providers to compete on price and quality.

Problem of Access.  If you agree with me that access to care for low-income families will not improve unless they have access to the same doctors and facilities that other patients have, we are left with a mixed bag.  All the Democratic candidates endorse an expansion of Medicaid and SCHIP.  Given MIT economist Jon Gruber’s estimate of crowd out, this implies that millions of people would move from private plans (where they generally have broad access) to public plans (where access is limited).  On the other hand, it’s hard to spend $120 billion a year without some expansion of private coverage.  So on balance, the Democratic plans are moderately positive on this measure.  I give higher marks to the three Republicans because I assume they would use free care and Medicaid and S-CHIP money to enroll people in private plans – where access to care is much greater.  But not much higher, because none of them is explicit enough on these points.

I cannot resist commenting on one more reform idea.  Sen. Clinton has repeatedly stressed that insurance premiums should be totally unrelated to health status.  But they are already largely unrelated.  Do you suppose she intends to go all the way – allowing people (no matter how sick) to enroll in any plan at the drop of a hat?  If so, the number of uninsured would double or triple.  (Why pay expensive premiums when you are healthy if insurance is always available once you get sick?)  The problem with grading her plan is:  do we take her statements seriously?

Have a great day.


For the National Journal scores, go to
(Subscription may be required)

For an explanation of why most plans do not solve the problems of cost, quality and access, see my previous Health Alert at

For my extended views on Romney’s plan go to

Comments (11)

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  1. Pat King says:

    I heartily agree with you regarding John McCain’s health plan. I think that his focus on cost as the number one problem, and on insurance reform to address coverage unavailability, puts him far ahead of the other Republican candidates. I hope that the Republican candidates get serious about this issue, as McCain clearly has. The others seem to greet the issue with varying degrees of silence and sloganeering. Presumably they think that Republican primary voters are not as focused on health care as other issues – but I think they may be wrong on that, and certainly fixing health care is a priority for the electorate as a whole.

  2. Joel Kahn says:

    I’m not sure how to interpret your post. You claim that Clinton wants everyone to be insured, whether they want to or not, and then you close your email with the system would be bankrupt since healthy people won’t buy health insurance only the sick one’s will. I have to assume that one reason her plan would even have a chance at success is because everyone needs to be insured, otherwise anti-selection would prevail. It sounds like you are cherry picking issues and not looking at the total plan.

  3. Art Jetter says:

    New Jersey has individual rates that are a result of the same kind of reform as in your last paragraph. – Insurance carriers were forced to leave the state. – Many thousands have dropped their coverage. – Rates went through the roof. The reform program: Monthly Premiums: MONTHLY PREMIUMS FOR FAMILY COVERAGE – PLAN D DEDUCTIBLES $1,000 $2,500 —— —— Aetna Life Insurance Company $ 6,089 $ 5,223 Celtic Insurance Company 14,062 12,375 Horizon Blue Cross Blue Shield of NJ 6,547 3,678 Oxford Health Insurance Company 3,799 2,790 Oxford Health Insurance Company (PPO) 1,743 Substantial reduction in insured individuals since reform:

  4. Raymond Lehmann says:

    I'm wondering about this comment: "I cannot resist commenting on one more reform idea. Sen. Clinton has repeatedly stressed that insurance premiums should be totally unrelated to health status. But they are already largely unrelated. Do you suppose she intends to go all the way – allowing people (no matter how sick) to enroll in any plan at the drop of a hat? If so, the number of uninsured would double or triple. (Why pay expensive premiums when you are healthy if insurance is always available once you get sick.) The problem with grading her plan is: do we take her statements seriously?" There's no question that community rating and guaranteed issue combine to create a huge adverse selection problem, but it strikes me that that was the whole point the individual mandate, which you earlier had said you opposed. I think it's clear that such a system would, in practice, amount to taxing young, healthy males to subsidize everyone else's coverage, but certainly you realize that the two planks in the plan are complimentary to one another, much as they are in the plan Romney enacted. Isn't it somewhat disingenuous to make this comment without recognizing that Sen. Clinton's plan wouldn't ALLOW people to opt not to insure themselves?

  5. Chris Ewin says:

    Thanks..well-written and to the point…
    In terms of access to quality primary care at a reasonable price, I hope you consider mentioning the entrepreneurial solutions physicians in SIMPD have created.

  6. Beverly Gossage says:

    Excellent evaluation! Thanks for what you do.

  7. Roger Beauchamp says:

    The McCain plan ignores the basic psychology of human behavior. It will be viewed as taking away something most citizens value, their present employment based coverage. It will probably require that the credit be applied toward health care insurance, proping up our costly, inefficient third-party payment system. I give it little credence. Frankly, I do not see a psychologically defenseable plan being advanced by any conservative candidate. Absent one, costs will continue to escalate strenghtening the hand of the single payer advocates.

  8. Tom says:

    It looks like our best candidate is Rudy. Any special thoughts on him?

  9. Bilaal Ahmed says:

    Mitt Romney still rides on some success of his state’s bi-partisan healthcare setup in promoting a federalist model, whereas Guliani opposes federal mandates (something that you clearly advocate).

    It’s interesting to see how state legislatures are creating comprehensive healthcare programs ( following initiatives in a few New England states. You should check out the outcome of what will happen in California; it’s likely that the future national plan will look very similar to it.

  10. Cary Lewis says:

    Any move towards Universal Health Care would push our health care crisis over the edge of disaster. Consumer-centered health care is a great idea and the best solution to our current crisis. Republican’s are pointed in the right direction, but have no clue how to actually put their plan into action.

    Our health care system has a missing link – Preventive Health Care. Our current system is based on responding to acute problems, urgent needs of patients, and pressing concerns. Testing, diagnosing, relieving symptoms, and expecting a cure are hallmarks of contemporary health care. While these functions are appropriate for acute and episodic health problems, a notable disparity occurs when applying this model of care to the prevention and management of chronic conditions.

    Preventive health care is inherently different from health care for acute problems, and in this regard, our current health care system falls remarkably short.

    Incorporate preventive health care, provide flexible health savings accounts, and lower health insurance costs for people enrolled in certified prevention programs and you will see quality rise while costs continue to decline.

  11. LN Shapely says:

    I am a state certified Caregiver in Washington. Most of the clients I help are through DSHS, our department of social services. I make $10.10/hour plus health coverage, the first I’ve had on the job since the early 80’s. I would not trade my life for theirs for big bucks, let me preface the following statements, yet….

    I am surrounded in this small town by welfarized, food bank eating lazy people. They are not uneducated by any means. They live in today’s welfare state. ALL their medical care is paid for. ALL their drugs are paid for, and believe me, many of my clients take 5-10 prescription drugs each day. They go to SPECIALISTS, PHYSICAL THERAPY, PSYCHOLOGICAL THERAPY, DOCTORS,and DENTISTS WHEN EVER THEY WANT…MANY TIMES A WEEK! They are hospitalized if necessary, and set up in comfortable nursing care facilities for recovery if necessary. ALL FOR “FREE.” Free to THEM. Not to me.

    These clients, some who live with spouses and grown children who CHOOSE NOT TO WORK OR THEY’D LOSE THESE FREE BENEFITS, have CELL PHONES, SATELLITE TV, numerous computers, high speed internet, plenty of food in the house (esp. if they are receiving food stamps), and this year my client bought her kids hundreds of $$$$ worth of electronic gadgets for Christmas.

    And how can they afford such luxuries THAT I CANNOT AFFORD? Because they don’t PAY FOR FOOD, MEDICAL CARE, health insurance, and receive welfare and disability. They mooch off the food bank and work side jobs they don’t report. Child support payments are not included in the adult’s “income.”

    My current client has been referred to an endocrinologist. We are traveling via FERRY into Seattle , U of WA. My client can call the WA state ferry system and get FREE PASSES for the car (which runs about $28/RT) , MY CAR, which along with my services 130 hours EACH MONTH come to her FOR “FREE.”

    I have neighbors who do everything in their power to milk the system and think NOTHING of it. Like I said, it is prevalent and growing worse.

    For my entire adult life, barring brief coverage from employers, I have PURCHASED major medical insurance at low cost with a high deductible. I am a widowed single mother now for 14 years. I have covered my child along with me on these policies and go to doctors when necessary. Currently, I pay about $76/ per MONTH for my daughter’s private insurance.

    Unfortunately, the worst happened last year and she was hospitalized for 2 weeks in Seattle. I thank the gods and goddesses for this insurance. Her bills totaled about $50,000, which were negotiated down with the insurance company, leaving me with expensive, yet manageable bills which I am making monthly payments on.

    ME, sir. I pay the bills. I pay them all. I also pay for the deadbeat society we have created and the “major” candiddead beat all buying into: The FED is going to fix it. The FED will take care of you.

    The question is not WHICH grotesque health plan the government will choose, or which tax abatement. The question is WHY anyone thinks health insurance needs to be $7200/year??? Why does the average person need $600 worth of medical care each month? They don’t. It is economically asinine to pay for insurance which the great majority of time is more than the medical care ever received.

    This is the real world. This is not conjecture. I live in their world 5 days a week. Everyone who asks for medical care, gets it…on my dime. I’m sick of it. We are marching down the socialist path and it frightens me. My European (expatriate) friends totally agree and are more frightened than I am. They have lived with socialized societies and LEFT there to be FREE.

    Also, just a note here to remind you to refrain from suggesting who the “major candidates” are. Even since your article, Jan. 1st, Huckabee won in Iowa and you didn’t even mention him. I am a Ron Paul supporter. He raised $20 million in the last quarter of 2007, a record breaking amount from supporters just like me. You didn’t mention him either. He is equal to McCain in major polls and the Internet darling of freedom loving patriots.