Hillary's health plan estimates too low, analysts say

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Sen. Hillary Rodham Clinton's universal health care plan will cost more than she says and effectively put the federal government in charge of administering private medical insurance, top think tank analysts said yesterday.

Mrs. Clinton's proposed health care reforms were estimated by her presidential campaign to cost $110 billion a year. But fiscal analysts are doubtful, noting that previous government cost estimates have been notoriously low in the past and that her proposal will likely be significantly higher.

"I've never known of a new government program where the initial estimate wasn't less than it actually cost. Take those numbers with a grain of salt. All we know is that it is going to cost a lot and more than she says," said Michael Tanner, chief domestic policy analyst at the Cato Institute.

Roughly half her proposal's costs will come from higher taxes on people earning more than $250,000 and half from cost savings derived from administrative efficiencies in the health care industry and preventive care. "But there's no evidence the hoped for savings will actually save money which will mean higher taxes," Mr. Tanner said.

Heritage Foundation analysts are also skeptical. "Even neutral estimates from the Congressional Budget Office often understate the costs of new entitlement programs. If neutral cost estimates understate them, those put out by a campaign understate them a lot more," said Brian Riedl, Heritage's chief budget analyst.

Heritage analysts who have been studying Mrs. Clinton's proposal said it is similar to an earlier plan offered by Massachusetts Democratic Sen. John Kerry in his 2004 presidential campaign that at the time was estimated to cost $1.5 trillion over 10 years.

When President Clinton addressed Congress on Mrs. Clinton's first health care plan in 1994, he said "it was structured in such a way that it would pay for itself," said Robert E. Moffit, director of health policy studies at Heritage.

"That was totally untrue. CBO said the plan would have added $70 billion to the deficit over time."

These analysts also dispute Mrs. Clinton's pledge this week that her health care coverage will not be "government-run" or create more bureaucracy.

In a draft analysis of the plan, Mr. Moffit said "Americans are getting an artful lesson in the new cosmetics of government control" from Mrs. Clinton.

"It appears that her latest program would enlist the energies of existing, but juiced up, federal agencies. Individuals and employers would be subject to government mandates to buy and pay for health insurance; and federal officials would define the 'affordability' of coverage with mathematical precision," he said.

But the plan's most far-reaching changes in health care policy "would be a massive shift in regulatory authority ... to the federal government," Mr. Moffit's analysis said.

"Federal rules would henceforth govern all health insurance products" and Mrs. Clinton "would standardize them for the nation" to insure universal coverage, he said.