As the self-described socialist Bernie Sanders remains strong in his challenge to former Secretary of State Hillary Clinton in the battle for the Democratic presidential nomination, Sanders boasts the unusual distinction of making Clinton appear to be a fiscal Scrooge. Contrary to that appearance, Clinton’s policies pack just as much poison as those the Vermont socialist has proposed. Consider, for example, the policy field where Sanders and Clinton appear to differ most: health care.
Sanders would replace the Affordable Care Act (ACA) with an even broader form of centrally controlled health care, a universal system in which the federal government acts as the single payer. Sanders claims most Americans would save, as a result of reduced premiums, about $5,000 more than they would end up paying in new taxes under his plan.
Clinton has criticized the high price tag of Sanders’ proposal, saying she would rather “strengthen the Affordable Care Act” in ways she imagines will save middle-income families $100 here and there.
These distinctions might suggest Clinton wants more government-limiting, market-minded health care than Sanders. She doesn’t. The ACA, which Clinton defends, preserves the guise of federalism—the division of power between the national and state governments—through its allowance of state-run insurance exchanges, but it actually diverts nearly all power to Washington, DC. Instead of averting the imposition of a centrally controlled health care system, Clinton would extend Obama’s usurpation of states’ authority to implement health care reforms in their own ways. Worse, Clinton’s path would restrict individuals’ freedoms by limiting health care options.
In Iowa, Clinton criticized Sanders’ plan for sending “health insurance to the states, turning over your and my health insurance to governors,” The Washington Post reported. Clinton was not objecting to Sanders’ plan because it would bypass governors, but because his single-payer system would somehow fail to bypass them.
By avoiding a single-payer system, Clinton’s proposed health care reforms are less socialistic than Sanders’, but only in a way that’s similar to how an AK-47 is less lethal than a bazooka. Unintended consequences loom.
For instance, Clinton would impose price ceilings of $250 per month for drug costs to consumers with long-term care needs, forcing pharmaceutical companies to swallow any portion of the difference the government does not absorb. Fixing drug prices below market value will drive away drug developers and manufacturers, restrict supply, and ratchet prices up, not down, for most consumers. As Clinton’s price ceiling further constrains profit potential, more companies will exit the supply chain. Only government subsidies to drug companies, paid for by new taxes (for which Clinton has criticized Sanders), will temporarily stem their exodus.
There is another way to relieve a supply crunch: Lifting ceilings and other price controls would let markets breathe and invite greater competition and innovation, which would strengthen the supply. In such a climate, high drug prices denote one thing: brand new drugs. Older drugs—the ones consumers currently rely on—will drop in price.
Unfortunately, neither Democratic candidate is calling for this kind of change, and Clinton’s plans to entrench Obamacare would ultimately destroy the nation’s health care system and create a greater outcry for the socialist, single-payer system Sanders demands.
Clinton may win the nomination by managing to distinguish herself as the more practical, responsible health care reformer, but her call for additional market interventions will lead to Sanders-style socialism in short order. Those who expect to need any health care in the decades to come should think hard before pulling the lever for either Clinton or Sanders.