Clinton lays out new healthcare overhaul

Democratic presidential candidate Hillary Rodham Clinton demonstrated Monday that she had lost none of her fervor for revamping the nation’s healthcare system, unveiling a plan that would require every American to have health insurance, offer generous subsidies to help pay for the policies and gingerly seek to tamp down rapidly rising medical costs.

Simple announcement of the plan represented something of a personal triumph for the New York senator, whose 1993-94 overhaul effort with her husband, then-President Clinton, went down to ignominious defeat. With the new plan, she could have a rare second chance to recast the nation’s healthcare system.

Clinton said that she had learned the lessons of her earlier failure, pledging to do less mandating and more negotiating. And there was some evidence of that at work in Monday’s presentation. Clinton repeatedly said that Americans who were satisfied with their current health insurance coverage need not make any change, something that the earlier Clinton plan did not promise -- an omission that proved immensely unpopular. In addition, she and her aides left key elements open to bargaining.

But when it came to the broad outlines of the proposal, Clinton was as adamant as she was 14 years ago that it was a moral imperative that the nation seek to provide all Americans with health insurance. She said this would require sweeping changes to, among other things, the drug and insurance industries that spearheaded the drive to defeat her plan in the 1990s.

“Today, as we strive for a new beginning to the 21st century, I believe everyone -- every man, woman and child -- should have quality affordable healthcare in America,” Clinton said in a speech at Broadlawns Medical Center in Des Moines.

“It is time for us to come together and start living up to our own values.”

Half of the $110-billion-a-year cost of Clinton’s American Health Choices Plan would come from savings that she says she can squeeze from the current healthcare system. The rest would come largely from rolling back President Bush’s 2001 tax cuts for the top two income tiers.

Independent analysts said that Clinton’s savings from modernizing the system and improving clinical practices were highly uncertain but little different than those cited by other candidates, such as Democrat John Edwards. The plan drew a generally negative response from the presidential hopefuls.

“That’s a highly ambitious figure,” Robert D. Reischauer, an expert on medical costs and president of the Urban Institute, said of a proposed $35 billion in modernization savings that Clinton counts on to help fund her plan. “It’s not going to be achieved without some significant belt-tightening that’s going to engender opposition.”

Under the Clinton plan, all Americans would face an “individual mandate,” a requirement that they have health coverage, just as most drivers are now required to have auto insurance.

Large employers would have to provide employees with health insurance or contribute to the cost of coverage. Small employers -- Clinton suggested that could be those with 25 or fewer employees -- would receive tax credits to start or continue coverage. Individuals up to a certain income level who were not covered through employers would be eligible for tax credits to buy policies.

These individuals could obtain their coverage from one of two sources, either by joining the program that now covers federal employees with private insurance policies, the Federal Employees Health Benefits Program, or by signing up for a yet-to-be created public program modeled on, but separate from, Medicare, the giant public health program for the elderly.

Clinton’s full ambitions became clear in her mention of the federal employees’ plan and in aides’ comments after her speech. Most of the plans in the federal employees’ program are much more comprehensive than are typical employer-provided policies, covering more services, with lower deductibles and co-payments. Gene Sperling, a former aide to President Clinton who now works for Sen. Clinton’s campaign, said the typical policy under her plan would be the financial equivalent of a standard Blue Cross Blue Shield policy.

Such a policy would be considerably richer than one now offered in Massachusetts, which approved a universal coverage plan last year that set the minimum amount of required coverage for most people at 60% of a typical policy, and one proposed by Gov. Arnold Schwarzenegger in California that would provide a policy with an out-of-pocket limit of $5,000 for individuals and $10,000 for families.

The reaction

Republican reaction to Clinton’s proposals was swift and predictable. “It’s a European-style socialized medicine plan -- that’s where it leads -- and that’s the wrong direction for America,” declared GOP contender Mitt Romney, the former Massachusetts governor.

Democratic reaction was more complex. Because of her history with the issue and her status as a former first lady, Clinton dominated news coverage Monday with her release of the plan. Eager to balance things out, her rivals for the Democratic nomination quickly took swipes at the plan and at Clinton.

Edwards mocked Clinton’s oft-repeated claim that she bore scars from her unsuccessful attempt to revamp healthcare in 1993 and 1994. “The cost of failure 14 years ago isn’t anybody’s scars or political fortune; it’s the millions of Americans who have now gone without healthcare for more than 14 years and the millions more still crushed by the costs,” the former senator from North Carolina said in a prepared statement.

He also sought to divert attention from Clinton’s speech with a policy gambit bound to win attention.

A few hours before Clinton formally rolled out her plan, Edwards said in a speech in Chicago that if elected, he would submit a bill that rescinded healthcare coverage for the president, Congress and other senior political appointees on July 20, 2009 -- unless universal healthcare was enacted by that date.

Candidate Barack Obama said that his healthcare plan trumped Clinton’s in terms of cutting costs. The Democratic senator from Illinois also sought to evoke memories of Clinton’s failure to pass a healthcare plan a decade ago. Back then, she was criticized as having a secretive style and as being unwilling to compromise. Obama suggested that nothing had changed.

In a prepared statement, Obama said: “The real key to passing any healthcare reform is the ability to bring people together in an open, transparent process that builds a broad consensus for change.”

For a candidate who has spent much of the presidential campaign seeking to build a softer, less-combative image, Clinton seemed to go out of her way Monday to take a slap at the drug and insurance industries, which were among her worst opponents in the early 1990s. She was particularly fierce about insurers.

“Right now, insurance companies have free reign to cherry-pick the healthiest patients and shut out anyone who seems to them like a bad risk,” she said. “Insurance companies spend $50 billion a year on elaborate calculations and schemes to figure out how not to insure people. Fifty billion dollars trying to shut out those who need care the most.”

Karen Ignagni -- president and chief executive of America’s Health Insurance Plans, the industry’s chief Washington lobbying group, whose predecessor ran the devastating “Harry and Louise” ads against the earlier Clinton plan -- reacted with a statement saying: “The new Clinton plan includes important ideas to make coverage more affordable; unfortunately some of the divisive rhetoric seems reminiscent of 1993.”

Anecdotal support

So too did Clinton’s use of anecdotes Monday, which were a staple of the early 1990s debate.

The candidate opened her speech with the story of Iowan Judy Rose, who lost her health insurance in 2001 when her husband’s plant closed. Rose was later diagnosed with breast cancer. She recovered, and a government program paid her health bills. But when her husband had a heart attack in 2003, his hospital bills forced the couple to sell their home of 30 years.

“That is the tragedy at the heart of our healthcare system,” Clinton said, “the devastation when one stroke of bad luck undoes a lifetime of hard work; that feeling of being right on the edge that eats away not just at the 47 million who don’t have healthcare, but many of the 250 million who do.”

Clinton’s rhetoric has not kept her from accepting money from the groups she criticizes. According to the nonpartisan Center for Responsive Politics, through the end of June, she took in $146,000 from drug companies and health product firms; $991,000 from health professionals, including doctors and nurses; and $353,000 from insurers.

peter.nicholas@latimes.com

peter.gosselin@latimes.com

Nicholas reported from Iowa and Gosselin from Washington.