Hillary Clinton

NEW YORK, NY September 18, 2007 —Almost 15 years after trying and failing to overhaul federal healthcare policy, Hillary Clinton has released a plan she says will provide coverage to nearly 50 million uninsured Americans -- while preserving quality and keeping down costs. The proposal relies heavily on existing insurance companies – something that observers say is both a strength and a weakness. WNYC’s Fred Mogul has more.

REPORTER: Since moving from First Lady to Senator, Clinton has alternated between wooing and shunning health insurers. She has blamed them for all that is wrong with the current system – but has sought their input . . . and their campaign donations. So on Monday, before she set about upending the status quo, Clinton made it clear that if you like the status quo, you have nothing to worry about from her.

CLINTON: If you have private insurance you like, nothing changes, you can keep that insurance, if you like the doctor you have, if you like the hospital you have, you can keep receiving care at that hospital

REPORTER: On the other hand, Clinton said, if you don't have health insurance or have it but don’t like it, you’ll be able to do what members of Congress and many federal employees do: go through a government program that lets you choose from a menu of offerings provided by several private insurers. These insurers would have to take all applicants. No more denying you for pre-existing conditions like cancer or heart disease. And to prevent the whole thing from costing you an arm and a leg, your maximum insurance premiums and out-of-pocket expenses would be based on a percentage of your income. That just seems fair, says someone you might not expect to say such a thing: Karen Ignani, president of the powerful trade group, America’s Health Insurance Plans.

IGNANI: You could scale what a person is expected to contribute, which, for an individual who is low-income, that’s a very important part of what we need to do as a society

REPORTER: That might make insurance plans sound downright generous, to the point where they’re giving away all their hard-earned profits. But under Clinton’s proposal, they could afford to give away a little more -- even while accepting people with all kinds of expensive pre-existing conditions. Why? Because the government would be helping – and also forcing -- the almost 20% of Americans who are uninsured to purchase policies. And, actually, most of those people are relatively healthy. As Wharton Business School Professor Mark Pauly puts it:

PAULY: If I was a private insurer, and I had the opportunity to have 47 million new customers, I would regard that as a good thing.

REPORTER: But it will only work if all the uninsured line up and get the subsidized insurance together. Devon Herrick of the free-market National Center for Policy

Analysis thinks there’s something intrinsically unfair about forcing insurers to yoke the young and able-bodied with the old and infirm.

HERRICK: What these elements will do is raise the price of insurance -- and essentially gouge people that are young and making them pay that is far above their expected cost. In a way, it’s a subsidy, taking from younger people and giving to older people.

REPORTER: One of the main issues will be how the federal government manages all these contacts between people, insurers, employers and caregivers. Clinton says there will be no new bureaucracy, and that her plan could be handled by expanded versions of Medicare and the agency that oversees healthcare benefits for Congress and federal employees. Those are both fairly popular programs. But it’s not clear whether they still would be, if they took a big leap in size.