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Obama & Health Care: The Straight Story

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Edward Gorey Charitable Trust
Drawing by Edward Gorey

After the failures of the early 1970s, reform proposals made by Democrats became more and more diluted. Even Senator Kennedy gave up on a single-payer system, and no major reform efforts were made again until Bill Clinton’s presidency. But the Clinton plan was also defeated by ideological arguments and powerful vested interests, this time not only the AMA but the pharmaceutical and insurance companies. “If they choose, we lose,” said Harry and Louise in the effective television ads run nationwide by the health insurance industry, warning that government bureaucrats would make decisions for citizens and thus undercut the free market.

But by the 2000s, employers were reducing health care benefits, premiums were rising rapidly again, drug prices were soaring, and more and more Americans were going uninsured. The managed care organizations had limited consumers’ choice of doctors too severely. Starr’s “trap” was becoming less effective as Americans became less content with what they had. In response to rising drug costs, George W. Bush created an expensive drug benefit for the elderly under Medicare, a leftover proposal from President Clinton. But he allowed private industry to retain all control over drug prices, and left a “doughnut hole” in benefits—the government ends annual reimbursement of drug costs at $2,930 and resumes paying them after $4,700. One of the achievements of the ACA is that it will gradually close this doughnut hole.

By 2008, health care had risen high in surveys of Americans’ gravest concerns and become a leading Democratic campaign issue. But in historical perspective the proposals by the Democratic candidates were modest. The new plans looked more like the Republican proposals of the early 1970s. By now it was clear from the makeup of Congress, however, that only with such limitations was nearly universal health care within reach in contemporary America.

When he took office, Obama offered an outline of his proposals to Congress, but not a specific plan. He believed that bipartisan wrangling within Congress would result in something that could actually be passed. If he had been more tenacious, more active in publicly advocating a clearly explained plan, he might have been able to build more public support for it. The electorate, according to surveys, never fully understood the plan.

Yet a number of path-breaking reforms almost became law. One, for example, would have allowed Americans between fifty-five and sixty-four to “buy in” to Medicare, a proposal long advocated by Senator Kennedy; but he soon developed brain cancer and could only participate in negotiations sporadically. The buy-in lost support in the final rounds of negotiations.

The public option was the most emotional issue. The federal government would have provided its own insurance plan that would have paid doctors and other health care providers Medicare rates plus 5 percent. Such a plan could have lower premiums than private insurance, which were typically 20–30 percent higher than Medicare rates. This could have been a good way to hold down costs, but it was discarded in negotiations. A watered-down public option was then proposed that paid rates similar to private insurance companies, but it was defeated at the last minute. In the case of both the Medicare buy-in and the public option, the votes of only a couple of legislators made the difference.

In view of the nasty polarization of current politics and the long history of reform, it is naive and even churlish simply to dismiss the ACA as inadequate. It is a comprehensive plan, a first in many ways, and one that can be built upon. John McDonough, a professor at the Harvard School of Public Health, was an adviser to Senator Kennedy and provides a firsthand account of the battle for and against the ACA in his admirably clear and terse book, Inside National Health Reform. He provides the best explanation available, which occupies most of his book, of the many individual components of the ten titles of the final act. As he writes, the ACA is “a landmark law in the history of health and social welfare…whether one regards the law as monumentally good or monumentally bad. Few federal laws in history approach it in terms of scope, breadth and ambition.” He does not exaggerate.

The story of intense and rough politicking over more than a year after Obama outlined his health care plan is best told in Fighting for Our Health, by Richard Kirsch, a grassroots organizer. The ACA battle is arguably the classic case study of modern politics and partisanship of our time. As a sign of Republican determination, not one Republican senator broke ranks to vote for the ACA. Only one Republican in the House did. Senator Charles Grassley, the Republican senator from Iowa, had favored a public option during the Clinton health care debates in 1993; he now was opposed because his fellow Republicans also were opposed.

Republican strategists played consciously on ideological fears. “If we’re able to stop Obama on this it will be his Waterloo. It will break him,” said South Carolina Senator Jim DeMint. Frank Luntz, a Republican strategist, wrote a report on how to exploit the “language of healthcare,” as Starr writes. He urged his activists to avoid talk about competition and free markets and emphasize that health care reform would “deny” care to Americans. He also urged them to talk about a “government takeover.” “Takeovers are like coups,” he wrote. “They both lead to dictators and a loss of freedom.” Denial, takeover, lost freedom—these were long-standing right-wing ideological scarewords and Republican strategists told politicians and conservative pundits to use them repeatedly.

From Obama’s point of view, and to a lesser degree Senator Kennedy’s, major compromises had been necessary. Many progressives have a hard time forgiving Obama’s agreement with the pharmaceutical lobbying organization that Medicare could not negotiate lower drug prices and Americans could not import cheaper drugs from Canada. In return, the drug companies would reduce drug prices for the elderly. As part of its agreement with Obama, the industry also agreed to spend $80 million on TV ads in support of the bill. Kirsch, the national campaign manager for Health Care for America Now (HCAN), writes in his book that had the pharmaceutical industry spent that money on anti-reform TV ads instead, the ACA may never have passed.

Kirsch took on each of these battles in an effort to fight for HCAN, state by state and legislator by legislator. Armed with $25 million from the Atlantic Philanthropies, and several million dollars from others, he built a national network of response teams that could launch thousands of phone calls quickly to legislators. HCAN, which became the leading grassroots organizer, fought with liberals who believed in a single-payer system or nothing at all. That a new health program that was at least partially successful and popular could open the way to more far-reaching legislation did not seem to occur to such opponents of the bill. On the other hand, Kirsch and the HCAN leaders strongly believed in the public option, which Obama and other Democrats also agreed to jettison in order to win support for a bill. Still, HCAN eventually gave full support to the ACA.

The high point of the Republican attacks was disruption by the Tea Party of Democratic town meetings during the August congressional recess of 2009 when negotiations on the Hill were coming down to the wire. Around the same time, Sarah Palin claimed outrageously that the Obama bill proposed “death panels” to tell people how to end their lives. In fact, the bill offered to pay physicians for advice on living wills, the value of hospices, and other concerns should beneficiaries seek them out. With Fox News on the opponents’ side, the disruptions of town meetings and the canard about death panels helped convince some Americans that something must have been wrong with Obama’s plan. Starr writes that such tactics were not new. It was “how conservatives had fought Truman’s national health insurance plan, Medicare, and the 1993 Clinton health plan.”

But the town meetings also concentrated the energies of the pro-reformers. Kirsch calls it among HCAN’s proudest moments as he and others rose to the occasion. They developed fast responses to the disrupters, sent pro-reformers to the town meetings, and neutralized the Tea Party. Kirsch believes that HCAN and others with whom he cooperated turned the tide to pass the bill. But Blendon and other pollsters found that damage had already been done. Support for the bill was now declining among the public. Many had warned that Obama had left the negotiation of the details of the bill to the House and Senate for too long. Had he been pushing the bill harder, and explaining its benefits all along, the anti-reformers may not have been able to build their campaigns.

At last, Obama gave a persuasive major public address in support of reform on September 9 that, according to Starr, seemed to stop the slide in support. Senator Kennedy’s death in late August may have inspired him. There were more battles to be fought over abortion funding and finally over the public option. These would be won by the conservatives in order to bring forward a bill in both the House and the Senate. In the Senate, Majority Leader Harry Reid needed all sixty Democrats to forestall a filibuster. He got the Senate to approve its version of the bill with no Republican votes.

But in January, a new obstacle arose. The Republican Scott Brown defeated the Democratic candidate for Senator Kennedy’s seat. Now there were only fifty-nine Democrats. Republicans gloated and some Democrats panicked. Several presidential advisers urged Obama to retreat and cut back provisions of the bill. But in what was probably his finest moment, Obama charged ahead to win support. He even visited a House Republican retreat to talk about reform with them for ninety minutes. HCAN, in turn, organized a demonstration of support in Washington.

Then, a major insurance company in California raised premiums by nearly 40 percent, outraging its customers. This, at last, was a bit of good luck. As Kirsch writes, the Obama administration had been too timid all along about denouncing the insurance companies, with their very high profits, in order to win popular support. After the big premium hike, the administration made outspoken attacks on the insurance industry, as Kirsch had wanted to do all along.

The bill was passed only by a procedural technicality. The House voted for the Senate bill, and the differences were worked out in the reconciliation process, where the filibuster did not apply. Scott Brown’s victory did not undo the ACA.

On balance, the ACA is a significant legislative achievement. Many thought Obama should postpone his campaign for health reform when he took office in order to deal with the collapsing economy. The authors of these three books disagree. Even without the individual mandate, Medicaid under the ACA will be expanded dramatically to enroll another 15 million or so Americans. Those under twenty-six would still be able to stay on their parents’ health plan. The state exchanges may entice more people to sign up for insurance when the advantages of policies are made clear to them, which may in turn increase competition among insurance companies.

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