Democratic Presidential Candidate Clinton Says She Would Support Capping Health Insurance Premiums at 5% to 10% of Income if Elected President

Democratic presidential candidate Sen. Hillary Rodham Clinton (N.Y.) during a Wednesday interview with the New York Times said that she would seek to limit health insurance premiums to between 5% and 10% of individuals' annual incomes as part of her proposal to expand coverage to all U.S. residents.

According to America's Health Insurance Plans, family health insurance purchased by an individual in the non-group market in 2006 and 2007 cost an average of $5,799, or 10% of the median annual family income, though policies can cost substantially more than that. The average worker contributes $3,281 for a family policy under employer-sponsored insurance, according to an annual survey of employers by the Kaiser Family Foundation and the Health Research and Education Trust.

Clinton said that she would prefer to establish a single limit on health insurance premiums for all residents, rather than a cap based on income. In addition, she said that she might seek to require health insurers to spend a significant percentage of health insurance premiums on patient care.

In a discussion about her proposal to require all residents to obtain health insurance, Clinton said, "I know that there are a lot of experts who may disagree about how to get to universal health care. But they agree with me that in the absence of universal health care it's very difficult to control costs, and it's extremely hard to incentivize quality improvements at the level you need to really see results." She added, "You can make it affordable, but unless you have some requirement you're not going to get everybody into the system."

According to the Times, Clinton did not "specify how she would enforce" the individual requirement to obtain health insurance. She said the uninsured could be enrolled automatically through employers and government agencies. There would be a "long grace period" to enroll, according to Clinton. Penalties might be required at some point, she said, "but I don't want to set a time frame."

Clinton also said that she would not object to an increase in the federal tobacco tax to help fund her health care proposal, which would cost an estimated $110 billion per year, if other funding mechanisms are not sufficient. She has proposed funding her proposal by allowing tax cuts for people making more than $250,000 per year to expire, and through "savings generated by improvements in prevention, chronic disease management and electronic record keeping," according to the Times.

Additional Proposals
Clinton said that she would allow the federal government to negotiate prices directly with pharmaceutical companies under the Medicare prescription drug benefit and would "rein in" subsidies for private Medicare Advantage plans.

"We have so much unnecessary cost in our system," Clinton said, adding, "It's heartbreaking how much we spend on things that don't produce a doctor at a bedside or a nurse taking care of a patient or any particularly good outcome." She said, "I'm reluctant to put more money into a broken system. And it's not only Medicare. It's our entire health care system -- without significant reforms. I think that would be an unbelievably bad decision" (Sack, New York Times, 3/28).

A Times video with excerpts of the interview with Clinton is available online (Harris/Sack, nytimes.com, 3/28).