Throwback to 1993? What's New About Democrats' Health Care Plans

Sept. 28, 2009— -- The image of lawmakers squaring off with each other and the White House on health care reform is not a new phenomenon. The country saw the same drama, with different actors, play out in 1993, when President Bill Clinton proposed a massive overhaul of the health care industry.

President Obama's rhetoric and methods closely match those used by Clinton -- both pitched their plans in a speech before a joint session of Congress and both suffered from the lack of public support. In fact, polling numbers are surprisingly similar for the two. In Sept. 1993, 31 percent of Americans thought Clinton's plan would worsen their own health care situation. In the most recent ABC News/Washington Post poll, 33 percent said "Obama Care" and the Democrats' plan would dent the quality of their plans -- an eerie throwback to 1993.

The new administration has also learned some lessons from past mistakes and is hoping the course they will chart on health care will be different. Meanwhile, a number of health care reform bills are circulating on Capitol Hill -- the Senate Finance Committee bill drafted by Sen. Max Baucus, D-Mont., the Senate Health, Education, Labor and Pension (HELP) Committee's bill, the House Democrats bill, along with drafts proposed by various Republican lawmakers.

But what's new about the current proposals from the policies that failed so miserably in 1993?

One significant difference, experts say, is that the Democrats' plan builds on expanding the current system, rather than completely revamping it.

"The big difference with the Clinton plan is that it was much more regulatory than Obama's plan," said Judith Feder, a professor at the Georgetown Public Policy Institute, and a Clinton-era official at the Health and Human Services. "When I see -- in terms of the design that's coming forward -- it [Obama's plan] is much more retention-building on the system that currently exists."

Here's a look at the similarities and differences between what's on the table today and what was suggested 16 years ago:

Mandatory Coverage:

The idea of universal coverage was the focal point of the Clinton plan. It made insurance mandatory for all Americans -- a platform presidential candidate Hillary Clinton ran on in 2008. Employers would pay 80 percent of the cost of health insurance premiums, with the employee covering the remaining costs.

Although the various Democratic bills today differ in language, all three of them require Americans to have some sort of health care coverage. As in the Clinton plan, the government would provide subsidies to individuals and small businesses who cannot afford it.

Republicans, in their drafts, have not made health insurance a mandate. Meanwhile, the president's views on this issue have been slightly blurred. He has repeatedly said all Americans must be covered, but has fallen short of actually mandating insurance. In his presidential campaign, Obama opposed an individual mandate and clashed repeatedly with Clinton. However, then-candidate Obama said he would require that all children have coverage.

Extent of Government Involvement

The complex structure of the Clinton plan involved close government involvement in the health industry. In brief, the plan packed public organizations under the umbrella of health care alliances. A federal national health board would have overseen the health system, and would be tasked with regulating premiums and overseeing benefits. Health care alliances at the state level would conduct a similar task, and states would have had the authority to regulate plans and have the option to create a single-payer system. The plan was widely panned as a government takeover.

Today, Democrats have been firm in saying that those who have private insurance will be able to keep it. The HELP Committee and House Democrats' plan includes the idea of a "public option," a government-run insurance plan that would compete with private companies. Obama has favored this approach, although he has left the door open to alternatives. Republicans have vehemently opposed the idea of a government insurance plan, saying it would stifle competition and the private market.

Some moderate lawmakers, such as Sen. Olympia Snowe, R-Maine, have suggested a "trigger" mechanism by which government-run insurance would come into play in areas where the private industry does not provide affordable, accessible coverage to Americans within a certain time frame. Democratic critics of that idea say that proposal in effect kills the option altogether and simply pushes back the debate.

Baucus' plan -- keeping in mind that a public option may not get ample votes in the Senate -- suggests the creation of health care cooperatives -- member-owned, nonprofit firms.

Medicaid and Medicare

The Clinton administration's plan was to incorporate Medicaid recipients into the mainstream health care system, and enroll patients on that plan into the mainstream. It also planned to cut Medicare and Medicaid costs by cutting payments to doctors and hospitals.

Sixteen years later, Democrats are looking to cut costs in those two programs by scaling back on inefficiencies, but at the same time, expanding coverage, a contentious point for some Republicans.

Cost

The idea that health care costs are too high and reform is needed hasn't changed in the last decade and a half. Most people acknowledge that health care -- the largest single expense for the U.S. government -- needs changes and cost cuts in the long term.

But confusion remains as to how the federal government would pay for a massive overhaul.

The Clinton administration argued, and Obama has used today, is that reform would reduce inefficiencies in the current system, thereby cutting costs in the long term. It identified savings by cuts in Medicare, Medicaid, integrating federal employees into the new system, reducing tax-free health benefits, and "sin taxes," namely a 75 percent per pack cigarette tax and a 1 percent tax on those businesses that chose to form alliances for health coverage. Obama's mention of a similar "sin tax" on soda has invited backlash.

Obama has promised he will not sign a bill that adds to the deficit. The president has insisted, without outlining a specific cost proposal, that any bill that will come to him should be one that implements administrative cost cuts and unnecessary tests and services -- also a component of the Clinton plan. Democrats have echoed the same point, but Republican critics say lawmakers still need to identify ways to pay for the plan, that could cost taxpayers billions of dollars over the next few decades.

Other Components

One of the few elements of health care reform all Democrats and most Republicans agree on, and one that was included in Clinton's plan, is that insurance companies cannot deny coverage based on pre-existing conditions. At the same time, Obama wants to focus more on preventative care and electronic records in doctors' offices to reduce long-term expenses to the nation's health care infrastructure.

One component in the current health care debate, that GOP leaders say has been ignored by their Democratic counterparts, is malpractice reform. Obama has said there is a need to review reforms in this arena. The Clintons proposed to limit lawyers' fee to discourage unnecessary lawsuits and suggested the parties use dispute mediators before taking cases to court.

Overall, experts say the regulatory strategy that Bill and Hillary Clinton adopted in their health care reform plan is not present in the new proposals. Rather, there is a push toward building on and improving the existing system. At the same time, the approach is more aggressive.

"We are seeing an enormously effective coordinated effort in the House to get this done," Feder said. "A very big difference is that they have become very invested it. ... In the Clinton administration, a year was spent drafting a 1,400-page bill that landed in Congress and they didn't take well to that. This time, Congress has taken the lead, particularly in the House."

Yet, the charges that are being leveled -- that the Democrats' plan entails a government takeover and that Obama's plan rations care -- are reminiscent of 1993 when the Clintons lost their reform push.

The fate of health care reform remains to be seen as debates and discussions continue in Congress over what components should be included. The president has provided some clarity in what he wants to see in the bill he signs, but at the same time, many thorny issues remain unresolved.