Hillary champions employer-based system

WASHINGTON, D.C.-Democratic presidential hopeful Sen. Hillary Clinton scored points with the business community in pledging to retain the nation's public-private healthcare system while promising universal coverage, improved quality and lower costs. In an effort to distance herself from previous efforts to establish a single-payer system, Clinton offered a more centrist plan that touts the "share responsibility" of all parties and builds on the existing employer-based system. There is a mandate for large employers to provide health coverage, which most already do, along with a tax credit for small employers (fewer than 25 workers possibly) to offset premium costs.

The centerpiece of Clinton's "American Health Choices Plan" is public access to a menu of "high-quality and affordable" private plans, similar to the Federal Employee Health Benefit Program. The program also expands public health programs to provide broader coverage options for low-income individuals and for the elderly. All individuals would be required to obtain insurance, but would have help in paying premiums through a refundable tax credit; the credit will be indexed to limit premiums to a certain percentage of income and phased out for high-income individuals.

NO DISCRIMINATION

Clinton believes high-deductible plans only encourage people to delay or avoid needed care.

CUTTING COSTS

To cover the estimated $110 billion annual price tag of universal coverage, Clinton proposes to reduce waste, cut spending and boost taxes on the rich. At the top of the list is a cut in "excessive overpayments" to Medicare Advantage plans, which supposedly would save $10 billion. Clinton also plans to gain $7 billion by reducing the cost of uncompensated care and another $4 billion through curbs on prescription drug prices. A whopping $35 billion would be gained by modernizing the health system through increased used of IT, comparative effectiveness analysis and disease management, among other strategies.

Clinton also would finance proposed tax credits with a $50 billion gain from canceling current tax breaks for more wealthy households (income over $250,000). An innovative proposal is to drop the tax exclusion for employer contributions to high-cost health premiums for high-income individuals, which would raise another $2 billion.

Some of these predicted savings may be more wishful thinking than realistic expectations, and tax hikes are always difficult to implement. Other Democratic presidential candidates have made similar cost-saving proposals and share Clinton's support for universal coverage and the large employer mandate. So far, leading Republicans have taken a more incremental approach, avoiding coverage mandates and relying more on high-deductible plans to expand access to care. Clinton's promise to avoid a big-government, single-payer approach places her in the middle of the debate.