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In the upcoming 2008 presidential election, issues surrounding healthcare are gaining
increasing prominence in discussions among candidates. Over the past 15 years, the overall
number of uninsured has grown more quickly than the US population, and today we have 47
million uninsured men, women, and children. Additionally, the rising cost of healthcare as well
as its quality are topics of pressing concern, and substantial revision and reform of our existing
Hillary Clinton, Democratic Senator from New York, has proposed a scheme by which
the country will drive toward accessible and affordable healthcare for all of the country’s
citizens. This will be achieved with a federal mandate that requires individuals to purchase
health insurance with the help of an income-related tax subsidy. Funding will come from raising
the taxes of high-income earners, and a number of government boards will be set in place to
determine quality measures and offer select insurance plans. John McCain, Republican Senator
from Arizona, has adopted a different approach to the same question. His plan removes the tax
exemptions related to employer-sponsored insurance and promises to use this money to provide
a tax credit to all those who buy insurance. This refundable tax credit will serve both as an
incentive for people to acquire insurance and as a means to make their purchase more affordable.
While both Clinton’s and McCain’s plans attempt to reform the healthcare system, their
proposals reflect their party affiliation, as the Democratic plan relies largely on government
intervention and the Republican one on the power of private markets. Because a large
population of the United States consists of voters with centrist tendencies, a more moderate
proposal, such as the one outlined below, could be important in winning their support.
income citizens, coupled with a refundable tax credit incentive scheme for those not eligible for
Medicaid, will strike a balance between large government regulation and market forces. It will
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be funded by reforming the tax code in a way that removes the favorable tax treatment of
employer-sponsored insurance as well as by the value of health capital gained from providing
timely healthcare to the uninsured. Furthermore, the plan will try to contain costs by
encouraging preventative care and setting up a federal board that will negotiate with insurance
companies as a large group buyer and will offer its plans to the public. Quality will be improved
through a host of pay-for-performance incentives that will be determined both by public and
private institutions.
The major ways in which this moderate plan will offer healthcare coverage to United
States citizens are an expansion of Medicaid and a refundable tax credit to those who purchase
health insurance on their own. Currently, 65% of the uninsured are people whose income is
below 200% of the poverty level. By expanding Medicaid eligibility to this income level, the
plan targets the most vulnerable uninsured population: those who cannot buy insurance because
it is not affordable. Additionally, the expansion would include a provision for a partial buy-in,
so that citizens who did not meet the 200% of the poverty level cut-off could pay varying fees
for Medicaid benefits, depending on their own income level. This way, the plan would give
coverage to a large portion of the 47 million Americans who do not have insurance. For all
those who did not qualify for Medicaid, a refundable tax credit would be offered to purchase
insurance coverage. The amount would be similar to John McCain’s $2500 per individual or
This plan would appeal to moderate voters more than either the Clinton or McCain
proposal because it incorporates both conservative and liberal ideas about healthcare reform. As
national exit polls in the 2004 presidential election demonstrated, the most important issue in
healthcare for Democrats was the problem of the uninsured1, and this proposal makes a
concerted effort to address that question by expanding Medicaid to the most vulnerable
uninsured population. The plan expands coverage close to the level of the Clinton proposal and
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past that of the McCain plan, thereby attracting moderate voters with its middle-of-the-road
stance.
For the rest of the population, this proposal relies on market mechanisms and incentives
to aid citizens in purchasing affordable and quality healthcare coverage. Senator Clinton’s plan,
which operates through both individual and employer mandates, has been heavily criticized from
the right as “a pretty clear march toward socialized medicine.”2 In fact, Republican presidential
candidate Rudolph Giuliani has said that this tactic of “government command and control” is “a
prescription for an increase in wait times, a decrease in patient care, and tax hikes to pay for it
all.”3 Thus, in order to rely less on big government intervention, this moderate proposal would
encourage buyers to enter an individual insurance market where plans compete for their clients.
While this would allay fears of government control over medicine and attract right-
leaning moderates, the proposal would also appeal to left-leaning moderates by creating federal
Clinton’s Health Choices Menu, a government board would be set in place to offer all
Americans affordable insurance coverage such as that enjoyed by members of Congress and
federal employees. This board will hold the same negotiating leverage that large employers
currently hold over insurance companies, and will be able to provide insurance to Americans at
competitive prices and with lower overhead costs. This is not included in the McCain plan and
will make the market approach more attractive to left-leaning voters. Thus, this moderate plan
strikes a middle ground between a federal mandate and pure market competition: individuals are
faced with a competitive market where they have a strong incentive to buy insurance, but there
is a government safety-net that ensures that people always have the choice of an affordable
A major healthcare issue that was at the top of the list for both Republican and
Democratic voters in the 2004 exit polls was the cost of insurance and medical services4. For
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this reason, this proposal will focus on cost containment through various approaches. First and
foremost, the plan will greatly encourage healthcare providers to adopt the practice of
preventative medicine and the coordination of chronic disease treatment. Both the Clinton and
McCain plan endorse these goals. In departing from the Clinton plan, this proposal will allow
insurance to be sold across state lines, encouraging the formation of a national competitive
market, which will attract right-leaning moderates. At the same time, the federal Health Choices
Menu will offer affordable options to all Americans because it will save tremendously on
overhead costs. This is not part of the McCain plan and represents an aspect that will draw left-
leaning moderates.
This proposal will also address costs associated with malpractice lawsuits, but not
disclosure guidelines, which will protect physicians from the inherent risks of practice, which
are present even for the most qualified physicians. Moderates will find this approach appealing,
since it tackles the issue of malpractice, but in a cautious way that invites federal guidelines.
Lastly, the proposal will work to lower drug costs by changing laws to make generic drugs more
quickly available to the population. This measure does not go to the same lengths as the
McCain plan, which lends the market more power through its drug re-importation policy. It also
does not give in to the same kind of government regulation as the Clinton plan, which threatens
patent laws represents a middle ground that will be popular with moderate voters.
Issues of quality carry similar importance especially in light of the Institute of Medicine’s
2001 report, Crossing the Quality Chasm, which claimed that Americans were receiving lower
quality care than they should be5. This plan will encourage pay-for-performance (P4P)
incentives that reward providers for meeting or exceeding a wide array of quality measures
determined for each condition. While insurance companies can identify these criteria on their
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own, those healthcare plans that are offered through the federal Health Choices Menu will be
selected so that they are in line with national quality standards to be determined by an official
board. Additionally, like the Clinton plan, this proposal will support federal recognition of
maintenance of certificate programs. The McCain plan leaves little room for government
intervention, especially since it does not tie its support for national standards to any market
mechanisms, such as the one offered above. The Clinton proposal, however, does not grant the
same importance to private markets in setting P4P incentives, as done under this plan. Once
again, a middle-of-the-road stance should win moderate votes for this approach rather than that
of Clinton or McCain.
Finally, this proposal would greatly appeal to moderate voters in terms of its financial
and social fairness. In order to finance this proposal, the tax code would have to be changed to
$91 and $160 billion is lost as tax breaks each year under the current scheme. By eliminating
these provisions, the money could be used to fund the tax credits and the Medicaid expansion.
Importantly, this proposal does not rely on tax increases proposed by Senator Clinton, thereby
appealing to right-leaning voters who would not otherwise have liked the Democratic plan.
From a social perspective, the moderate plan works to insure low-income populations, which is
an action that will resonate with left-leaning voters since it is reminiscent of universal coverage,
something not included in Senator McCain’s proposal. Additionally, the economic benefits of
insuring the uninsured would attract both left- and right-leaning moderates. In a 2003 report, the
Institute of Medicine estimated the value of health capital lost each year due to uninsurance to
be between $65 and $120 billion6. All voters would be attracted by this proposal’s use of the
Overall, this plan’s approach toward reforming the healthcare system combines
principles of government intervention and market forces. The expansion of Medicaid to cover a
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larger part of the uninsured population represents a left-favored approach, while the use of
refundable tax credits to provide incentives for purchase of coverage relies on a conservative
belief in the power of private markets. This mix of individual incentives and government
oversight will attract an important population of moderate voters and has the potential to make