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At last night's Democratic debate, Sens. Hillary Clinton and Barack Obama spent a big chunk of time laying out the party's biggest policy goal–establishing universal health insurance. But that was just days after an ambitious, bi-partisan reform program died in the California Senate–an ominous sign for the concept's supporters.

The California Senate Health Committee defeated the reform proposal by a 7-to-1 vote, with three abstentions, much to the chagrin of the state's progressive Republican governor, Arnold Schwarzenegger.

The bill would have been more along the lines of what Hillary Clinton has been pushing–with universal coverage achieved by mandating everyone to buy insurance, while addressing affordability issues with government subsidies, and availability challenges settled by prohibiting insurers from turning away applicants on the basis of pre-existing conditions or age.

Legislators were scared off by the open-ended price tag, especially with a $14.5 billion state budget deficit staring them in the face, and a recession possibly looming.

They also got cold feet when Massachusetts, which had already established a similar universal insurance system (under the governor at the time–Republican presidential candidate Mitt Romney), announced that the program was underfunded by about $245 million in this fiscal year, and would require an additional $400 million next year to cover costs.

You can interpret these developments in one of two ways.

One, you might conclude that universal health insurance is simply unaffordable. Or you might say that universal coverage is impractical on a state-by-state basis, and that only a truly national program can get the job done.

If a Democrat is elected, you can bet that universal health insurance will be the top domestic policy goal, especially if Hillary Clinton wins the White House. But with the economy tanking, the budget deficit soaring out of control and concerns raised about how Uncle Sam might force the uninsured to buy coverage, the going will be very tough, even if the Democrats secure a wider majority in both houses of Congress.

And don't forget that the health insurance lobby will hammer away at the risks of any massive reform plan with everything they've got. They probably won't mind mandatory purchases, which would force younger, healthier people who've been skipping health insurance premiums to buy coverage. But they will fight tooth and nail against being forced to insure anyone who comes along, no matter sick they are–the equivalent of mandating a homeowners insurer to write coverage on a house that is already on fire.

Last night, both candidates said they would finance the extra costs of universal health insurance by allowing the Bush tax cuts on the wealthiest 1 percent of Americans to expire, allowing Medicare and other federal programs to use their massive buying power to negotiate lower drug and service costs, and by streamlining administration expenses.

Will that be enough to keep the program solvent? And can the Democratic nominee convince voters shaken by the weak economy to take the plunge? For the sake of the 50 million or so without health insurance, I certainly hope so.

Meanwhile, the battle between Sens. Clinton and Obama over one of their biggest policy differences–whether to mandate that everyone buy health insurance–is getting ugly. The Obama campaign struck a low blow by mimicking the infamous “Harry and Louise” ads employed so effectively by critics of First Lady Clinton's health insurance reform proposals.

The mailer includes an image of a couple at the kitchin table, with the following text: “Hillary's health care plan forces everyone to buy insurance, even if you can't afford it. Is that the best we can do for families struggling with high health care costs?”

Still, I can't imagine the ads won't get even nastier when the nominees start bashing one another across party lines.

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Is Health Care Reform Doomed?

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