Political Hay

Hillary Hoists GOP by Its Own Petard

HillaryCare 2.0 builds on misguided principles that Republicans themselves have espoused in recent years.

By 12.6.07

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Generals fight the last war, and politicians run against their opponents' historical records. So it's no surprise that the Republican Party is dredging up the specter of "HillaryCare" in response to Sen. Clinton's latest health-care reform proposals.

This is a mistake. HillaryCare 2.0 is a very different creature than the stillborn beast Clinton unveiled to widespread scorn in 1993.

Ironically, her new plan builds on the misguided principles espoused by Republicans themselves in recent years, specifically the notion that market failure is the problem and government can harness private-sector competition to improve on market outcomes.

Give Hillary credit for her political wiles. With her new proposal, she is positioned to hoist Republicans by their own petard.

When Republicans controlled both Congress and the White House, they did nothing to change the anti-market regulations that hobble the health-care industry. Nor did they get rid of the ill-conceived tax laws that subsidize employer-provided health insurance. The result is a system that hides costs from consumers and disrupts the natural laws of supply and demand.

Instead, Republicans have been laboring to devise a government program that delivers on principles like competition, choice, private insurance and universal coverage. And they've unwittingly created a monster.

Before he left office as governor of Massachusetts, for example, Mitt Romney signed a law requiring all uninsured adults to purchase health insurance or face a fine. In California, Gov. Arnold Schwarzenegger is driving his state toward a similar program.

Like Romney's and Schwarzenegger's proposals, HillaryCare 2.0 also pretends to be based on competition, choice, private insurance, and universal coverage.

What's wrong with such principles? Nothing, in and of themselves. But as we have seen time and again, these principles cannot be engineered by a government bureaucracy.

Case in point: In the 1990s, Tennessee dramatically expanded its Medicaid program, allowing individuals making as much as $100,000 a year to sign up. The results nearly busted the state's budget, despite strong economic growth at the time.

Government-run health care around the world has produced similar failures. In Britain, waiting times for treatment grow longer, while patients suffer from serious conditions, so much so that some Brits have taken to pulling their own teeth.

In Canada, health-care rationing has sent citizens fleeing south of the border for needed cures. Yet even as Canada exports its medical problems into America, some deluded American politicians want to bring Canada's price controls into the United States through a "forced sale" drug reimportation law. Ironically, these price controls are responsible for many of Canada's health-care problems to begin with.

Massachusetts and California will soon face similar problems. And so will Hillary's proposal, if it ever becomes law.

The reason is simple. Any program that codifies health care as a public good -- granting all residents a legal entitlement to consume as much as they want, whenever they want, all at low prices -- is soon overburdened by the inevitable cost overruns, shortages, and shoddy service that result when everyone gets a "free lunch."

To prevent this bureaucratic Rube Goldberg machine from collapsing, legislators invariably resort to price controls, rationing, and more restrictions and regulations. In fact, this is exactly what happened to the SCHIP program currently under debate. Congress is seeking a massive, $35 billion expansion of the program.

And lest we forget, SCHIP, like Hillary 2.0, was a Republican invention -- built on the same misguided principles of government-managed choice, bureaucratically directed competition, public-private partnerships, and mandated universal coverage.

Republicans have forgotten that not even a truly free market -- and certainly not a market mired in bureaucracy -- can do the impossible of providing everyone with unlimited care at unbeatable prices. Hence, there is no clear conservative voice of reason to prevent Hillary from convincing Americans that the free market -- not unrealistic expectations -- is the problem -- and that government is the solution.

Now's the time for that voice of reason to step up and articulate that the only government solution worth exploring is one that removes government from the system. Piecemeal government interventions into the market -- like tax biases in favor of employer-provided health insurance, or regulations mandating excessive levels of insurance coverage, and even absurd licensing requirements for health-care providers -- must be dismantled in order to restore some degree of discipline and efficiency to the market.

Once market discipline has been re-introduced into health care, targeted government action may be appropriate -- and perhaps even effective -- for those unable to buy into the market on their own. But the thousands of pages of government regulations at the federal level alone show that the health-care market is far from the free-market failure so many claim it to be.

If Hillary's plan succeeds, Republicans will have no one but themselves to blame. They were the ones who built this yellow brick road to government-controlled, universally mandated health care.

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About the Author
Lawrence A. Hunter is president of the Alliance for Retirement Prosperity.