Video: Clinton announces health care reform plan

updated 9/17/2007 2:05:58 PM ET 2007-09-17T18:05:58

For months, Democratic presidential candidate Hillary Rodham Clinton has promised a plan to bring health care to every American.

She made good on that pledge Monday, unveiling a sweeping proposal requiring everyone to carry health insurance and offering federal subsidies to help reduce the cost of coverage.

With a price tag of about $110 billion per year, Clinton's "American Health Choices Plan" represents her first major effort to achieve universal health coverage since 1994, when the plan she authored during her husband's first term collapsed.

'Individual mandate'
The former first lady says she has learned from that experience, which almost derailed Bill Clinton's presidency and helped put Republicans in control of Congress for years to come. Aides say she has jettisoned the complexity and uncertainty of the last effort in favor of a plan that stresses simplicity, cost control and consumer choice.

The centerpiece of Clinton's plan is the so-called "individual mandate," requiring everyone to have health insurance - just as most states require drivers to purchase auto insurance. Rival John Edwards has also offered a plan that includes an individual mandate, while the proposal outlined by Barack Obama does not.

"It puts the consumer in the driver's seat by offering more choices and lowering costs," Neera Tanden, Clinton's top policy adviser, told The Associated Press. "If you like the plan you have, you keep it. If you're one of tens of millions of Americans without coverage or don't like the coverage you have, you will have a choice of plans to pick from and you'll get tax credits to help pay for it."

Clinton, the Democratic front-runner, has already laid out proposals to improve health care quality and reduce costs. She was to release her universal health care plan in Iowa, the first voting state.

With 47 million Americans currently uninsured, the Democratic presidential contenders have been united in advocating universal coverage. They have parted ways on certain specifics, including the individual mandate, which has detractors from both ends of the political spectrum.

Privacy and cost concerns
Republican skeptics say it would be too invasive and would restrict personal freedom and choice. Liberal Democrats have expressed concern that such a mandate would be too financially burdensome for lower-income individuals and families - a concern shared by Obama, who has said individuals cannot be forced to purchase insurance until the cost of coverage is substantially reduced.

Aides said Clinton believes that an individual mandate is the only way to achieve health care for all. A key component of her plan would be a federal tax subsidy to help individuals pay for coverage.

Clinton's plan builds on the existing employer-based system of coverage. People who receive insurance through the workplace could continue to do so; businesses, in turn, would be required to offer insurance to employees, or contribute to a government-run pool that would help pay for those not covered. Clinton would also offer a tax subsidy to small businesses to help them afford the cost of providing coverage to their workers.

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For individuals and families who are not covered by employers or whose employer-based coverage is inadequate, Clinton would offer expanded versions of two existing government programs: Medicare, and the health insurance plan currently offered to federal employees. Consumers could choose between either government-run program, but aides stress that no new federal bureaucracy would be created under the Clinton plan.

Paying for the proposal
Aides said Clinton will propose several specific measures to pay for her plan, including an end to some of the Bush-era tax cuts for people making more than $250,000 per year. Edwards has vowed to completely repeal the tax cuts for high earners to pay for the cost of his plan, estimated at $90 billion-$120 billion per year, while Obama would pay for his plan in part by letting the tax cuts expire in 2010.

Clinton stresses several cost-saving measures to help pay for universal coverage. She's already recommended several such proposals, such computerized medical record-keeping and a reduction in federal overpayments to hospitals and health maintenance organizations. She also promotes wellness and disease prevention as a way to reduce costs.

Clinton is sure to court danger from the health insurance industry by proposing several industry reforms. Among other things, she would require insurance companies to provide coverage to all consumers regardless of pre-existing conditions.

The insurance industry helped kill Clinton's earlier attempt at health care reform through a multibillion-dollar media and lobbying campaign that included television ads featuring a middle-class couple named Harry and Louise fretting over having to get their insurance through a new "billion-dollar bureaucracy."

Her 1994 effort was 1,300 pages long and so detailed it offered little room for any maneuvering or compromise. And after seven years in the Senate, Clinton has said she's developed a greater appreciation of the need to compromise.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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