Clinton avoids hard questions on healthcare reform in Ezra Klein convo (and Klein lets her)

Ezra Klein sat down with Hillary Clinton for an in-depth policy discussion. I find many of her responses frustratingly circumlocutory and vague. Let's take the exchange over healthcare reform, piece by piece.

Ezra Klein To ask about another interesting fissure from the primary: You often said that your preference was that we built on Obamacare to get to true universal coverage. And I’ve read your plan around Obamacare, and it doesn’t do that yet. So what would be your approach for taking that program from the roughly 90 percent covered that it’s at now to 100 percent?

Hillary Clinton Well, let’s celebrate that we’re at 90 percent coverage. And I think that is one of the differences: I see the glass at 90 percent full, not empty. And [I believe in not] starting over again — either by repealing it, as the Republicans advocate, or by coming up with a whole new plan.

Well yes, there's some cause for celebration. But given the starting point pre-ACA, the glass is far from 90% full.  According to Gallup's latest survey results, the uninsured rate has been cut from 17.1% since late 2013 to 11% now -- that is, reduced by about 35%.

Clinton continues:

So I think it’s tremendous. There was a new Robert Wood Johnson study that pointed out that just in the five years since it’s been implemented, health care spending has gone down $2.6 trillion from the projection that they originally thought it would increase by.

The slow rate of total healthcare spending growth and of healthcare cost growth is something of a mystery. The ACA may be a contributing factor, but whether that's so, or the extent to which it's so, is very much a matter of dispute. The effects of continuing consolidation, turbo-charged by ACA incentives for coordinated care, could offset gains. Clinton has promised in a kind of by-the-way manner to ramp up antitrust enforcement, but that didn't come into this conversation.

Moving on:

So we are really making progress, and I think it is important to build on that progress. We have 20 million people who are now in the Affordable Care system. We’ve expanded Medicaid, which I want to see expanded in every state that hasn’t, because I think that was an ideological rather than economic or moral decision. And I want us to build on the Affordable Care Act.

Probably about two thirds of the increase in people covered via the ACA comes from the Medicaid expansion. Perhaps 10-20% comes from enabling adults up to age 26 to remain on their parents' health plans.  To date, the private plan ACA marketplace has probably reduced the ranks of the uninsured by about 5-6 million. That's hardly a roaring success. And too many enrollees in marketplace plans -- perhaps 20-30%, depending on how you assess -- are underinsured.

Clinton is effectively leaning on the Medicaid expansion to paint the ACA as a whole as a success. In a way that's fair enough: the Medicaid expansion is simple, and it's effective -- the evidence is that it's improving beneficiaries' finances and getting them needed (and often long-denied) care. The private plan marketplace is more problematic: enrollment is little more than half of what CBO originally forecast, and premiums spiked last year and are spiking more dramatically for 2017.  The marketplace may find its feet, but it's wobbling. Clinton does not talk about it in any detail, and Klein doesn't press her on it.

Continuing the same response where we left off:

Now, how are we going to do that? We’re going to have to be clear about the competition that is needed to keep costs more reasonable. It is going to require us to take a hard look at premiums, copays, deductibles, and see what we can do to limit the kind of additional costs — particularly for prescription drugs — that policyholders have under the exchanges.

We have got to encourage more competition. Not just by working with the existing insurers but really trying to open the door — more successfully than was achieved — to other forms of insurance. The cooperative insurance plan hasn’t worked in most places, but it’s worked in some places. What are the lessons we can learn from that?  So I’m actually very excited about this, and I think we will get to 100 percent coverage. And I think we will do it by building on people spending their own dollars and by our subsidies.

And it is a much more acceptable, less disruptive approach than starting over and trying to impose a single-payer system — because, remember, the vast majority of Americans are getting their health insurance through their employment. There’s very little evidence they are unsatisfied by it. I certainly saw that firsthand when I was working on this back in ’93 and ’94. And I favor a public option so we can try to lower the costs even further for people who have a larger risk of bad health problems.

This is a rather vague hodge-podge of Clinton's proposed ACA subsidy sweeteners and her support for a public option health plan on the exchanges, whether mandated nationally via legislation or set up by individual states via the "innovation waivers" written into the ACA (Clinton has indicated that she would look with favor on such waiver proposals).  Clinton's proposed subsidy boosters include a tax credit for people with high out-of-pocket expenses, a premium cap of 8.5% of income for anyone who buys health insurance on the individual market, and unspecified subsidy boosts for those currently within subsidy range.  Taken together, Clinton's ACA patches aim to reduce costs for individuals via further subsidies (including for the currently unsubsidized) and for the Treasury via the public option.

Clinton eases into discussion of the public option by alluding to the nonprofit insurance co-ops written into the law as a weak substitute. She rather underplays does acknowledge the high co-op failure rate: only eight of the original 23 are still operating. As for the extent to which a public option would reduce costs, whether for the individual or for the Treasury, that depends in large part how the entity sets prices. Klein tried to delve into that, but Clinton sheared off, and Klein let her:

Ezra Klein
Should that public option be able to link with Medicare to bargain down prices?

Hillary Clinton
I think it’s going to be something we’ll have to look at. I have long been in favor of giving Medicare the authority to bargain. And I voted for it; I’ve spoken out for it—

Ezra Klein
You mean on prescription drugs?

Hillary Clinton
On prescription drugs. And if it were to be a broader public option, maybe there as well. Because it is clear that we don’t have enough bargaining power yet to deal with some of the big cost drivers, like prescription drugs, that are still not reacting the way we had hoped that they would.

In fact, there’s a lot of new gimmicks to try to drive up the cost of prescription drugs. But I’m actually optimistic. I think we’re on the right track with the Affordable Care Act. And of course we’re going to have to make adjustments. We did with every other program that people now defend and love, and we're going to do it with the Affordable Care Act.

Prescription drug costs are certainly an important factor in Americans' rising out-of-pocket costs, and Clinton has a raft of proposals to try to rein them in. But Klein was asking whether she was supporting a "strong" public option that would pay Medicare prices to doctors and hospitals, rather than negotiating on its own. In the strongest version of the public option, never seriously considered in the ACA drafting process, healthcare providers who wanted to take Medicare patients would also have to accept ACA public option plans paying Medicare rates. That in turn would pressure, and perhaps implicitly license, private insurers to negotiate lower payment in their marketplace plans.

Clinton rather limply indicates that she was thinking of a public option having strong bargaining power on costs other than prescription drugs, but having been offered the prescription drug rabbit hole, she jumps back in after poking her head out. Left unaddressed: the kind of bargaining power she envisions the public option being endowed with.

Clinton does get across her broad point that most Americans get their health insurance through their employers, most are satisfied, and it's less disruptive to shore up the ACA initiatives than to remake the whole system. But she doesn't address Klein's opening question: how would she go beyond the panoply of ACA patches she's proposed to get to truly universal coverage? Or: what would be next steps if her core proposals were implemented?

In the 2008 nomination fight, Clinton was often seen as having a better command of wonkish policy detail than Obama. Klein, for his part, has often stood out as an interviewer by pushing his subjects for such detail and challenging their inconsistencies. Here, Clinton avoided engaging the ACA's weak points and how her proposals are targeted at them, and Klein did not push her.

P.S. I should add that I think many of Clinton's proposals are promising, as indicated here and here (with Harold Pollack). I just don't think they're very well discussed in this interview.