The health care plan that dare not speak its name.

More than a dozen years later, Hillary Clinton wants the world to know that she has seen the error of her ways. That health care plan--the one that was supposed to revolutionize the medical industry and guarantee every American insurance--wasn't such a hot idea after all. "I think that both the process and the plan were flawed," Clinton admitted in an interview with The New York Times, demonstrating a level of contrition more fitting for an Iraq war architect. "We were trying to do something that was very hard to do, and we made a lot of mistakes."A lot of people will hear that and nod in agreement. With health care reform emerging as a top issue for the 2008 presidential campaign, probably no politician is more identified with botching it than Senator Clinton. Across the political spectrum, "Hillarycare" has become shorthand for policy overreach and liberalism run amok. "It was too big, too complex, too government," former House Speaker Newt Gingrich recently said. Democrats have been critical, too: "It was probably too dogmatic," Tony Coelho, the strategist and former representative, told National Journal. It "had to be X, Y, and Z." Given Hillary's enormous role in shaping that plan, as an adviser to her husband and leader of his infamous 1993 health care task force, trying to defend it today might well amount to campaign suicide. That, undoubtedly, helps explain why Clinton has joined the critics, sticking it to herself not only during interviews but also at public events, such as a gathering of the American Medical Association last year. "Let's retire the old debates," she said to her one-time adversaries. "They haven't served our country well." And maybe she has a point. After all, there's a pretty good case to be made that the Clinton administration as a whole--and Senator Clinton in particular-- did make some egregious strategic errors, particularly when it came to selling the plan to Congress. If we're supposed to judge Clinton based on her decisions in 1993 and 1994, then it's good to know whether her political judgment was sound--not to mention what lessons she may have drawn from the experience. But an equally important question, certainly, is the one nobody is asking: Just how well would the Clinton health care plan actually have worked? Would we have been better off under Hillarycare? Here's one good hint: Twelve years later, we're back talking about the very same problems, and even some of the very same solutions, all over again. Hillarycare wasn't always a dirty word. People forget, but there was actually a time, not so long ago, when the Clinton health care plan was wildly popular and Hillary was considered a hero for her role in shaping it. It was September 1993--right after Bill Clinton formally introduced the plan in a nationally televised address and Hillary Clinton went before several congressional committees to defend it. By that time, everyone agreed the nation had a health care crisis on its hands: About 15 percent of the American population had no health insurance, and employers--who had historically provided private insurance to most of the U.S. workforce--were becoming increasingly reluctant to offer coverage. The big question was what, exactly, to do about it. To the disappointment of the left, the Clinton campaign had, in 1992, rejected calls to create a true single-payer system--in which the government would insure everybody directly, as it now does through Medicare for the elderly (and through which many foreign governments cover all of their citizens). It did so out of deference to American political sensibilities, which traditionally frowned on too much government, and in keeping with its genuinely centrist instincts. As Hillary would later explain in her congressional testimony, "If you build on the employer/employee system, you are already building on what is available and familiar to most Americans." At the same time, the campaign had indicated that simply giving coverage to everybody-- a relatively simple task, depending on how you did it--was actually not enough. Somehow, the Clinton team had to come up with a way to make medical care less expensive, because it was the rising costs that made health insurance so unaffordable and would, eventually, bankrupt not just many individuals but the country as a whole. Late in the presidential campaign, Clinton had embraced a model of reform known by the clunky moniker "managed competition." Its premise was that it made sense to rely on private insurance as the primary source of coverage for working Americans, just as had always been the case in this country. But, in order to make coverage affordable to everybody, government had to restructure the insurance business. Regardless of income and medical condition, every single American needed to be able to choose from a menu of private plans, the way employees of large businesses generally did. If this happened, the theory went, a true market for health insurance would exist--and the competition to attract customers would force insurers to find ways of providing more cost- effective coverage. This would ultimately lead to better medical care and lower premiums, freeing up resources that could then be used--among other things--to extend insurance to people who didn't have it already. It was an ambitious notion, certainly, and it promised to deliver a lot of what the left had always wanted--most importantly, truly universal coverage with government guaranteeing relatively generous benefits for all. It also involved closely regulating the insurance industry, to make sure that insurers would make coverage available to everybody. But, in its broad designs at least, managed competition was still not a particularly radical scheme. The idea actually traced its lineage back to discussions by health care industry leaders convened by a physician named Paul Ellwood, who had once advised Richard Nixon, and an economist named Alain Enthoven, who had worked in the Pentagon during the Vietnam war. And, in 1993--as Hillary's task force filled in the plan's numerous details--the business community's interests continued to get plenty of attention. Hillarycare would require all businesses to contribute something to their employees' insurance, but that contribution would be more predictable than directly paying for insurance premiums, which could vary wildly from year to year. While small businesses--many of which still didn't provide their workers with coverage--might have a harder time meeting the new obligation, the plan promised these companies special subsidies. All of this did make for a pretty complicated schematic--at least behind the scenes. That's why the final proposal weighed in at a hefty 1,300 pages and critics were later able to lampoon it by diagramming it on poster-board charts. But, from the standpoint of the average American, the Clinton plan actually promised to work in a remarkably straightforward way. Once a year, the government would present people with a choice of private plans. All the plans would have generous benefits, covering even services like mental health that private coverage had traditionally given short shrift. The plans would vary in cost, depending in part on the level of financial protection they provided, with the government covering nearly the full price of the cheapest plan and individuals chipping in extra for the pricier alternatives. But all the plans would be affordable. The government would prohibit the plans from discriminating against people based on their medical condition: An insurer couldn't charge you higher premiums, or reject you outright, just because you had, say, diabetes. Most important, coverage would become a birthright. Everybody would get insurance from day one. And it would never get taken away. Presented this way, the plan was awfully appealing, as an early poll in the Los Angeles Times showed: After listening to the president explain the plan in his speech, Americans said they supported it by a two-to-one margin. And, when Hillary toured Capitol Hill to promote the program, even some Republicans gushed over her handiwork--not to mention her obvious mastery of the subject. "I, for one, personally admire you," Senator Orrin Hatch told her. But not everybody was so impressed. In late 1993, the Health Insurance Association of America--a trade group representing small insurers--introduced TV viewers to Harry and Louise. The fictional middle-class couple spent a great deal of time sitting at their kitchen table, flipping through a printed copy of the Clinton health plan and furrowing their brows as they stumbled across what they considered troubling details. One of Harry and Louise's complaints was that the Clinton plan would make almost everybody purchase insurance through giant purchasing cooperatives called "alliances." But the alliances were what allowed managed competition to work--they let individuals, small businesses, and the uninsured band together and get the kind of group pricing and discounts that large employers always had. The following February, life imitated art when Elizabeth McCaughey, a very real scholar at the conservative Manhattan Institute, decided to tell the world about the myriad flaws of the Clinton plan by writing a screed for a political magazine. (As it happens, it's the one you are holding in your hands.) McCaughey, for her part, was shocked to discover that the Clinton plan called for covering only services deemed "necessary" and "appropriate." But, as The Atlantic's James Fallows would later note in a devastating rejoinder, every insurance program in the world had such a clause. The Clinton plan, at least, left decisions over what those terms meant in the hands of a democratically accountable National Health Board, as opposed to secret discussions held within the offices of insurance companies. Harry, Louise, and McCaughey also worried a lot about big, bad managed care, fretting that the Clinton plan would force everybody into cheap health maintenance organizations (HMOs), which restricted choice of doctors and access to treatments. "Having choices we don't like is no choice at all," Louise explained in one spot. The germ of truth here was that the Clinton plan really did have incentives for people to choose HMOs, since those would likely be the cheapest options in most cases. But study after study had shown that the best HMOs provided superb medical care--better, in fact, than more traditional fee- for-service insurance. (They were more integrated and generally did a better job of emphasizing preventative care.) Besides, the Clinton plan wouldn't actually force people into managed care. Indeed, at a time when many companies were doing precisely that--by choosing HMOs for their workers without giving them alternatives--the Clinton plan proposed to guarantee every American access to at least one old-fashioned plan that didn't limit choice of doctor. These more traditional plans would be more expensive, to be sure, but the option would always be there for people willing to pay that extra premium. Still, not every objection was as unfounded as McCaughey's--or as transparently self-serving as Harry and Louise's, who were created by an industry (small insurers) whose standard business practices (avoiding sick people) the Clinton plan sought to make illegal. A different set of concerns came from more thoughtful experts like Ellwood and Enthoven, the fathers of managed competition. Of particular concern to them was a limit on how much insurers could raise premiums from year to year. Government was in no position to set such limits, the argument went, because it couldn't determine as well as the market what the proper level of medical spending was--or how to allocate it. If, for example, the cap was too low, doctors and hospitals wouldn't get the money they needed--and would begin cutting back on services. From a policy standpoint, these caps were indeed the plan's most controversial element--and the ones about which questions could most legitimately be raised. But, looking back, even these concerns were probably overblown. The task force had included this cap partly to satisfy the Congressional Budget Office (CBO), which, in its official estimates of the program's cost, wouldn't assume that having a bunch of insurance plans was likely to save money, as the Clintons insisted it would. Since CBO's projections would guide the debate, and since political moderates were likely to abandon the plan if it threatened to raise deficit spending or spark new taxes, the task force threw in the cap. But it was entirely possible premiums would not have exceeded the caps, at least not for a while: In fact, over the next few years, premium increases stayed under the limits set by the caps. And that was without a lot of the administrative savings that Hillarycare would have generated. Don't forget, too, that Congress always had the power to ease the caps if they really threatened to disrupt medical services--although the hope was always that limiting spending would ultimately push the health care system to be even more efficient. As we all now know, those objections ended up carrying the day. The fear of rationing played directly into public fears of government incompetence--a fear the press did little to dispel. Harry and Louise and McCaughey may have been talking nonsense, but they spooked a lot of Americans. And, even though many interest groups stood to benefit from the Clinton plan--chief among them, large employers already paying for generous worker benefits--few lifted a finger to help. The plan died, and, just like that, Hillary went from savior to scapegoat. But look at everything that has happened since that time. By the end of the '90s, virtually every American was enrolled in an HMO or some other type of managed-care plan--in other words, precisely the scenario that Harry and Louise, along with McCaughey, had warned would happen if the Clintons got their way. But managed care had evolved in a rather different direction than it might have under Hillarycare. The Clinton plan had proposed to regulate HMOs closely. Not only would the standard benefit package limit the ability of insurers to skimp on necessary care for people who needed it, but the Clinton plan also would have required all insurance plans to collect and publish data about how well their beneficiaries were doing (like, for example, whether they all got recommended tests, how satisfied they were with the service, and so on). This would have bolstered the best managed care organizations, the nonprofit group practices (like Group Health of Puget Sound in Seattle or Harvard Community Health in Boston, both of which had excellent reputations in the '90s) that really did promote high-quality medicine. There was even a patients' bill of rights, to make sure that people who thought their insurers had denied treatments improperly could appeal such decisions in a binding legal process. It was these sorts of provisions, which took pages to describe, that made the Clinton plan such an object of derision. And yet, in the absence of such rules, the "good" HMOs never stood a chance. For-profit insurers gobbled up the market, and, in response to demands by employers to deliver cheaper insurance, they paid very little attention to quality of care. Horror stories about improper treatment denials and interference in the clinical process proliferated. Studies showed that insurers were routinely using medical treatment guidelines that many doctors considered substandard. By the late '90s, the public was clamoring for a patients' bill of rights--which, had it passed, would have looked much like the one Hillary had thought to include in the first place. The HMO reform debate eventually subsided in the face of some more pressing concerns, such as the lack of prescription coverage for Medicare recipients-- who were, as of a few years ago, desperately struggling to pay for their drugs. But the Clinton plan had anticipated that issue, too: As part of its effort to modernize the entire health care system, it would have added a prescription- drug benefit to Medicare. And it would have had the government administer that benefit directly, as it does for the rest of Medicare. (By contrast, the existing drug benefit--which the Bush administration and the Republicans created in 2003--uses private insurers as intermediaries. That costs more money, since private insurers require extra subsidies to stay with the program, and it doesn't apply as much bargaining leverage to the pharmaceutical companies.) Lately, every day seems to bring word about some new employer struggling with the costs of their employees' health insurance; if it's not the automakers, it's the airlines or the telecommunications industry. It's hurting American competitiveness; in one celebrated case a few years ago, Toyota cited high, unpredictable health care costs here as a reason to locate a new plant in Canada instead. And it's poisoning labor-management relations. In 2004, California grocery workers walked out for four months because their employers-- fearful that Wal-Mart, with its famously meager benefits, was coming into the area--were threatening to offer lower health benefits. Now both the union and the grocers say they support a universal health care system that, even if it requires some employer contribution, would at least create a level playing field and began to restrain rising costs, which have started climbing again almost as quickly as they were before. In other words, they support doing exactly what the Clinton health care plan would have done. And, of course, today some 45 million Americans have no health insurance--or nearly 16 percent of the population, which is about one point higher than the figure was when Hillary and her task force got to work. You can say a lot of things about the plan that process produced: that it was complicated to explain, that it was botched politically, and that, above all, it was hardly perfect. (Some of us still think a true single-payer system would work better.) But, if Hillarycare accomplished absolutely nothing else, it would have made certain every American had access to affordable health care--sparing millions of people physical harm, financial calamity, and countless indignities. For a plan that was supposedly such a debacle, that would have been an awfully mighty accomplishment. You won't hear anybody in U.S. politics admit as much right now. In Washington, at least, praising Hillarycare will get you laughed off the talk shows. But the rising anxiety about affordable medical care, combined with the worries about health care's effect on the economy, have launched yet another serious debate about health care reform-- the first since the early '90s. And, if you look closely at the proposals experts and officials are tossing around, you may start to recognize some familiar elements. With the exception of true single-payer plans, virtually every idea for universal coverage now on the political agenda envisions creating a system in which, like Hillarycare, people will shop around for private health plans. They also envision, as did Hillarycare, a government role in making sure affordable, high-quality plans are made available--typically, by creating (again, like Hillarycare) some sort of purchasing cooperative through which some, if not all, of the population would buy their coverage. That's true of the plan former Senator John Edwards proposed as part of his presidential campaign a few months ago. It's true of the plan Senator Ron Wyden introduced to Congress back in December. It's even true of the plan former Massachusetts Governor Mitt Romney signed into law before leaving office last year--even though Romney has made mocking Hillarycare a staple of his campaign rhetoric as he seeks the Republican presidential nomination. Still, while just about every reformer has borrowed elements of the old Clinton health plan, none of the leading presidential contenders has yet proposed something as comprehensive and far-reaching--aware, no doubt, that trying to do so much so quickly may be more than the political system will tolerate. For the most part, the serious reformers concentrate on getting coverage to everybody--leaving more wholesale reorganizations of the health care system, the kind that might yield serious cost savings, until later. What remains to be seen, though, is whether Hillary herself can take even that more modest step. No candidate in the presidential race knows more about health care than she does. No candidate has a stronger, more proven record of fighting to expand coverage. And, yet, no candidate has to act with the caution that she does. Achieving universal health care will probably require the leadership of somebody who can push public opinion--and it's not clear that she can do so, at least, not as long as Hillarycare's reputation remains what it is. It's a shame, really, because if there were any justice, she'd have the best one-liner on health care of any candidate out there: "I was right the first time."

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