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October 01, 2007

To reform the health care system

Responding to Americans' desire for health care reform, a near-desperate desire in some quarters, almost all of the presidential candidates have put forth a plan to increase access to medical insurance. The resulting options range from market-based solutions to national health insurance. The most intriguing proposals, and possibly the most pragmatic, would build on the successes of the private health insurance market and mend the cracks of its failures.

All eyes are on Hillary Clinton's plan, which John Edwards' campaign claims is nearly identical to its own. These plans and several state reform efforts hinge upon requiring individuals to purchase health insurance. In the case of Clinton's plan this is coupled with a mandate to insurers to offer insurance to all who apply, regardless of health status or other qualifiers.

It is a clever plan. If realized, it would accomplish a return to an insurance market that does not discriminate by age, health status or other factors. By definition, it would eliminate the problem of the 47 million uninsured Americans.

Its implementation depends upon a realistic method for making the premiums affordable for the uninsured, most of whom certainly can't pay the going rate, which the Kaiser Family Foundation sets at $12,000 a year for a family of four. The Clinton plan promises people tax credits tied to a premium guaranteed not to exceed an "affordable" percentage of their incomes.

A reform so monumental will require the buy-in of both parties. The focus on private insurance reform raises interesting issues on both sides of the aisle. Conservatives are less likely to balk at a plan that maintains the choice and flexibility of the private market but will be less enthusiastic about the federal involvement in financing the purchase. Liberals will appreciate the progressive tax credits to subsidize the purchase, but will question the public-private venture. Libertarians will chafe at the requirement that individuals purchase insurance. There is a push-pull phenomenon at work in the plan's mechanism.

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Posted by healthinsurance at October 1, 2007 11:40 AM