Updating the Health Care Fight

Against the Current, No. 50, May/June 1994

Rick Wadsworth

Ever since the Clinton inauguration, or even before, the various consumer groups, physicians, unions, senior organizations and others who support the single-payer, or Canadian-style health care plan, have been seeking different ways to orient toward the Clinton plan for health care reform. Before William Clinton’s inauguration it had been made clear that the “pay or play” plan (in which employers must either pay for health insurance or pay a tax to support a public plan) put forward by Congressional Democrats and supported by the more conservative members of the AFL-CIO Executive Council was out, and the “managed competition” scheme of the Jackson Hole Group (policy wonks mainly in the employ of insurance companies) was in.

By last spring it was made clear that any consideration of the single-payer plan was also out. It was reported that when Dr. David Himmelstein, of Physicians for a National Health Program (PNHP), met with Hillary Clinton in an early stage of the proceedings of her Health Care Task Force, he pointed out that single payer was the only plan with popular support. “Tell me something interesting, David,” she said.

Nevertheless, many single-payer supporters felt themselves called upon to support the Clinton plan, in some cases even before it was at all clear what the plan was. Others were urgently interested in participating in the secret deliberations of the Health Care Task Force, and thereby bound themselves to support the result. For months there were rumors about the outcome of the task force. One highly placed source would tell single-payer supporters in private that they were “winning everything” but the terminology – “we’ll get single payer, but it’ll be called managed competition.” Another would speak to a business group and denounce single payer as socialism.

The Plan

The mountain labored mightily and produced — a mountain. The end result of months of behind-the-scenes struggle, dickering and compromise is the nearly incomprehensible morass of the Clinton Plan. In detail far too complex to describe, recondite with abstruse insurance and bureaucratic gobbledegook, in broad outline its nature is still pretty clear.

The purpose of the Clinton Plan is to meet — or at least appear to meet — the massive demand for reform of health care while maintaining whole the interests of big business and the insurance industry. It does this by setting up a national mechanism, not to give care or provide health insurance, but to purchase health insurance.

The terms of the Clinton Plan are probably familiar to most readers. It is based on the concept of managed competition. Briefly stated, the idea behind managed competition is that the main problem with health care is that it costs too much. The reason it costs so much is that people are getting too much of it. (I am not making this up.) Because many bills for care are paid by third-party payers (insurance companies or the government) people are not shopping wisely. They recklessly splurge on tests and operations their doctors tell them they need or wastefully get prescriptions filled and take their medicine.

Under this plan everyone, except the employees of large corporations, would be required to join an insurance purchasing co-op called a “health alliance.” Everyone would “choose” a health care plan. Employers would be required to pay 80% of the average cost. Employees would pay the other 20% — and would also have to pay the difference, if any, between the average insurance and any plan they picked.

The unemployed and poor would be subsidized by the government, but would in all cases have to make a co-payment of at least $10 per visit or procedure. The self-employed would have to buy their own insurance, but would get a tax break, if poor enough.

Insurance companies will be so compensated as to encourage them to start managed care set-ups such as health maintenance organizations (HMO’s) and preferred provider networks (PPN’s). Financial pressure would drive most working people out of fee-for-service plans (where you pick your own doctor) and into these set-ups. This is supposed to control costs.

The actual history of managed care suggests it does little or nothing to cut cost but it does maximize insurance administration overhead and profits while squeezing the quality of care.

In short, the Clinton Plan lets big corporations continue to self-insure, but puts the insurance industry in charge of managing all other health care. To accompany this vertical integration, the plan would also produce an insurance oligopoly, since only a few big companies could bid on the huge contracts let by the health alliance.

Single-Payer Rhetoric

The Clinton Plan probably hit the height of popularity on September 26, 1993, before it was actually released, or even finished, when President Clinton made a television speech to a joint session of Congress to describe it. Spokespersons and spin doctors made much of this as a “magic moment” in which the initiative would be seized and great changes made.

It must be admitted that Clinton made a brilliant speech. The thing is, it was a speech in favor of the single-payer program. Throughout, Clinton outlined principles, such as universality and choice, drawn from the language of single-payer activists, and that is actually incompatible with his own scheme.

In particular, he made much of the right to health care and of the creation of a national health card, when in fact he proposed only the right to buy insurance. The care would only get you admittance to the insurance marketplace.

The speech was followed by a period in which many prominent organizations that support single payer also announced their support for the Clinton Plan. This generally took the form of a public statement declaring solidarity with the principles of the President’s proposal, together with the declaration of a sentimental preference for universal single-payer health insurance. This went hand in hand with lobbying for the Clinton Plan.

AFSCME, the United Automobile Workers (UAW) and the Communication Workers of America (CWA) went this route, as did the Citizen Action Group. Prominent among single-payer activists who didn’t follow along were Public Citizen, a consumer group for which Ralph Nader is the most prominent spokesperson, and PNHP. Both have treated the Clinton Plan and its praiseworthy principles as a cruel hoax and a contemptible fraud on people.

As a consequence, there has been a cold split in the movement for single payer. Both sides have continued to support the American Health Security Act (the Wellstone/McDermott/Conyers bill) — one side for tactical reasons (“to keep Clinton from moving to the right”), the other on principle. Consequently, despite a near media blackout, support in Congress for single payer has continued and grown somewhat. Co-sponsors of the single-payer bill are the largest Congressional block.

Low-Ball Bidding

Simultaneously, people to the right of the Clintons have produced a slew of plans, each bidding to be even more advantageous to big business and the insurance industry. The most reactionary of these are perhaps the Michel/Lott and the Gramm/Armey bills.

Differing in detail, both plans leave things much as they are, but authorize the creation of tax free medical savings account, out of which people would be allowed to withdraw money to pay for barebones catastrophic medical insurance and also cash to pay their medical bills. Although the idea is backed by the American Medical Association, it seems likely that even in Congress many will perceive  its basic silliness — after all, if people could afford to save to pay for medical care, they would.

Shortly after the President’s plan was announced, its progenitors, the Jackson Hole Group, denounced it, saying they wanted a “pure” managed competition plan. Obligingly, two bills have been produced in Congress. Both do away with the employer mandate — the obligation for employers to pay a theoretical 80% of insurance premiums.

One plan, the Chafee/Thomas bill, replaces the employer mandate with an individual mandate — universal insurance coverage is to be obtained by the simple expedient of requiring everyone to buy insurance. Whether, or for how long, people will be put in jail for getting caught without insurance has not been clarified.

The other plan, Cooper/Breaux, is the pride of the “New Democrats” and a big media favorite. It lets business off the hook, doing away with mandates entirely — everything is to be completely voluntary. Known as “Clinton Lite,” this plan creates the insurance co-ops of the Clinton Plan, but leaves everyone, rich and poor, boss and worker, prosperous yuppie and destitute homeless person equally free to buy or not, just as they please. Although there are limited subsidies for the poor, needless to say universal coverage is not an aim of this plan.


February 2, 1994 the Business Roundtable, a group of “top people” from the 200 biggest U.S. corporations adopted the position suggested to them by a task force headed by the president of Prudential Insurance, endorsing the Cooper bill over the Clinton Plan. The U.S. Chamber of Commerce and the National Association of Manufacturers took the same position. Great indignation was expressed by many Clinton supporters. Senator Jay Rockefeller (D-WV), for instance, as sincere a man as a multi-millionaire liberal can be, seemed genuinely angry when he said, “Shame on big business. They are abandoning their workers. There is a special place in hell waiting for Bob Winters of the Prudential Insurance Company.”

Others were less surprised. Russell Baker, in a column entitled “In Comatose Mumble” (New York Times, 2/5/94) pointed out that if the Clintons wanted the Clinton Plan, they should have offered a strong single-payer system, so as to have something to give up to the insurance industry.

The fact that they missed so obvious a point seems to suggest only four possible hypotheses: 1) The Clintons never actually wanted the Clinton Plan, the whole thing is a giant ploy. (Considering how much trouble Hillary Clinton has gone to, and how bad the defeat is going to look politically, this seems improbable.) 2) The Clintons expected most liberals, union bureaucrats, social democrats and consumer advocates to show some spine, stand up and fight for a single-payer system, thereby creating some left cover. 3) The President and his chief advisor don’t understand how U.S. politics works. 4) All of the above.

By mid-February the Congressional Budget Office released their study showing that, just as right-wing opponents of reform had claimed, the numbers in the Clinton Plan don’t add up. This was sort of like shooting a dead horse.

“Pay or Play” Revisited

Up until the second week of March all smart money and media commentary predicted that Congressional action would center around finding some high-sounding compromise between Cooper and Clinton. Now that actual Congressional maneuvers are happening, it turns out all this ain’t necessarily so.

The first committee to actually work health care is the Health Subcommittee of House Ways and Means, chaired by Congressman Pete Stark (D-CA), a well-known liberal (albeit with an unfortunate tendency to say racist things about Clarence Thomas in public). Stark is alleged to be a supporter of single-payer health care.

In the committee, however, Stark has introduced a new version of “pay or play,” in which employers who don’t provide a specified lousy level of health insurance benefits will be taxed to provide a lousy level of benefits to the uninsured through a public plan. This is simply an expansion of Medicaid.

In addition to the fact that Medicaid sucks already (particularly in that it is often hard to find a doctor who will take a Medicaid card), Congressman Stark has added high levels of deductibles and co-payments to the mix. So all-in-all, it looks like the mainstream Democratic liberals are about where they started, or a little behind where they started, when George Bush was president.

 The only good news is that it seems Stark needs the vote of Congressman McDermott and other single-pay supporters to mark-up and move his bill. As of this writing, McDermott is holding the Stark bill hostage to the mark-up of the single-payer bill. The same will be true in other House committees with health care jurisdiction. I wouldn’t bet money, but one can hope the single payers will hang tough.

Meanwhile in California, single-payer supporters are collecting signatures to put a single-payer law on the state ballot in the November election. Six hundred and sixty thousand valid signatures of registered voters must be collected by April 22; by the beginning of April petitioners had already reached 700,000. The initiative is being coordinated by Californians for Health Security, 1144 65th Street, Oakland, CA 94609, Phone: 510-450-7845.

Where We’re At

Single payer is the only plan with any spontaneous popular support. It is the plan that would actually work, that would decommodify health care and establish an actual and enforceable right to care. It is the plan that would actually control spiraling health care costs, that makes fiscal and economic sense. It’s the only one where the numbers do add up.

Moreover, there is a section of industrial capital (the big-three car companies, for example) who have so far been made to provide a half-way decent health care plan to their workers, and who know that a Canadian-style health care system would reduce their per unit production costs.

In addition, now that the Clinton bandwagon has broken down, it appears that the cold split in the single-payer movement is beginning to close. Certainly those who have supported the Clinton Plan have been making an effort to be civil once again to those who hung tough on supporting single payer. They are seeking ways to work together. The other day I was told on good authority that the national leadership of AFSCME have told their state leaderships that unless the Clinton Plan passes in a form that includes universal coverage (at least by a clearly specified and not-too-distant date) and a level of benefits as good as or better than currently exist, AFSCME will oppose its passage. This is harder language than I have heard.

Newsweek gave single payer its editorial endorsement last September. There was also a very friendly write-up in the March 21, 1994 Business Week. These could be straws in the wind. If there were powerful popular mobilization, it couldn’t be absolutely excluded that single payer might win.

On the other hand, the U.S. insurance industry has the biggest bag of money in the known financial universe. It seems likely that the sheer weight of finance capital makes any real health care reform impossible in the current Congressional regime. It may be that the clash of giant financial interests will make passage of any health care bill impossible. If a “reform” bill does pass, most likely the majority of working people will pay more, one way or another, and get less care than they do now.

In short, the best bet is that — like NAFTA — the final Congressional action on health care will demonstrate the hostage-like political status of the liberal-labor-African American wing of the Democratic Party. That party seems once again poised to fulfill its historic role as the graveyard of progressive hope.

ATC 50, May-June 1994