HillaryCare Flops in California

If Schwarzenegger couldn't get it done, how can Mrs. Clinton?

By John Fund
Sunday, September 23, 2007 12:01 a.m.

SACRAMENTO, Calif.--Hillary Clinton is patting herself on the back for proposing a health-care plan that is much more politically astute than her 1993 Rube Goldberg effort. She told an audience in New York this week: "I think I have successfully thought through all of the objections and pre-empted them."

She may want to think again. Last January, California Gov. Arnold Schwarzenegger proposed an eerily similar plan using the same rhetoric and even the same slogan adopted by Mrs. Clinton to describe hers: "Shared Responsibility."

That's no coincidence. Both ArnoldCare and HillaryCare 2.0 are the product of the same advisers. But despite all of its clever political compromises, ArnoldCare is bogged down in trench warfare in California's liberal Democratic Legislature. If anything passes, it will likely be only a shell of a bill without any financing component. Legislators will hope voters approve a general tax increase to pay for it in November 2008.


The two plans have many features in common. ArnoldCare's $12 billion-a-year price tag represents about a tenth of Mrs. Clinton's estimate for the costs of her plan, roughly in line with California's share of the national economy. Both include mandates to buy health insurance, a ban on premium differences based on health status, Medicaid expansion, and a requirement that insurers have to offer policies to all applicants.

All of this is the brainchild of Laurie Rubiner, who directed health-care issues at the liberal New America Foundation until she left in 2005 to become Mrs. Clinton's Senate legislative director. She was replaced by Len Nichols, who in 1993 served as the liaison between President Clinton's budget office and Mrs. Clinton's health-care task force. Ms. Rubiner isn't taking direct credit for selling Mr. Schwarzenegger on her plan, but aides to the governor confirm her role. Steve Clemons of the New America Foundation acknowledges that Ms. Rubiner "incubated and hatched" the ideas at the heart of the governor's plan. Ms. Rubiner declined to respond to a request for an interview.

Given the similarities, here are some political lessons that ArnoldCare might teach us about how Mrs. Clinton's plan might be received:

• The claim that no new bureaucracies are created will be challenged. Like Gov. Schwarzenegger, Mrs. Clinton envisions requiring everyone to prove they have health insurance. But she's vague on the details: "At this point, we don't have anything punitive that we have proposed." You can bet she will have some ideas.

Even so, making certain people have insurance is easier said than done. California has had a law mandating that drivers have car insurance since 1970 and has required physical proof of insurance to register a car for a decade. Even so, the Insurance Research Council says 25% of the state's drivers remain uninsured.

• Illegal aliens and their access to health insurance will be controversial. Mrs. Clinton promises health care for all, but is punting on the issue of whether the illegal aliens, who often use emergency room services, will be covered. Ms. Rubiner admits it's a "huge issue," but says "that's one we're going to have to think through a little bit."

Criticism of the governor's plans to cover illegal aliens forced him to drop the idea, but this week he fumed at those who raise such "Mickey Mouse"-type concerns. Mrs. Clinton's plan could be caught between populist forces opposing health care for illegal aliens and liberals who will insist on it.

• Hoping for bipartisan support isn't the same thing as getting it. Gov. Schwarzenegger sincerely believed he could convince Republicans to support his plan. In the end, he couldn't find anyone from either party to push his plan in the Legislature. It was too tax-heavy for Republicans (his effort to call proposed tax hikes "loans" flopped) and not nearly interventionist enough for Democrats.

"The governor got significant parts of the business community to sign on, from Safeway to the Los Angeles Chamber of Commerce," one adviser to the governor told me. "But that didn't move the antitax Republican base."

• Nothing big passes Congress these days without bipartisan support. "The lesson from California is just how difficult it is to deal with so many players that have such disparate demands," says Dan Walters, a columnist for the Sacramento Bee. "The governor's original plan had the doctors opposing the fees it imposed on them and the nurses union upset because it wasn't single-payer. Having all the first responders who dress in white opposing your plan isn't politically healthy."


Sen. Clinton claims she now realizes she'll need actual votes to pass something. But traces of the old Hillary remain. "I wish it were possible to just wave a magic wand and say from the White House, 'Here's what I want.' But that's not the way it works," she told the Associated Press.

The real test may be her willingness to accept some market-oriented GOP proposals such as tax-free savings accounts for health care and a curb on frivolous liability lawsuits as the price for the bipartisan support she now claims to want. Now that really would be a New Hillary.