Health Reform Without Apology
The Affordable Care Act is under relentless attack from conservatives. Yet progressives are too ambivalent about defending it.
The passage of health-care reform in March 2010 is the most progressive expansion of U.S. government social policy in nearly half a century and perhaps without parallel in its scope since Social Security’s enactment in 1935. The law—the Patient Protection and Affordable Care Act (ACA)—expands access to medical care and health insurance to more than 30 million low- and middle-income Americans; imposes much of the cost on affluent individuals and businesses; terminates longstanding practices by parts of the private insurance industry that victimized millions of sick Americans even after they’d paid premiums for decades; elevates health and prevention as a priority; and launches the most comprehensive set of initiatives and experiments to date to restrain both government and private-sector expenditures on medical care and claw back inefficient spending to help pay for widening access.
Today’s partisan vitriol readily explains why Republicans vociferously oppose the ACA, even though core components (like the individual mandate) were hatched years ago by Republican policy-makers and conservative think tanks like the Heritage Foundation. What is surprising is the reaction of many progressives, who are subdued about or even hostile to the new law, lamenting it as inadequate and overly accommodating to vested interests. Twenty-six percent of Americans favor repealing the ACA because it did not go far enough, according to a Politico/George Washington University poll in May.
Progressive disaffection with the most liberal social welfare legislation in at least a generation may stem from the failure to enact single-payer financing or a compulsory national public option. Some skeptics focus on the inadequacy of the ACA compared to health-care systems in other affluent democracies. But most people and many progressives are disaffected—at least from my talks to community, business, and university audiences—because they are unaware of what the ACA did enact. When I describe the actual provisions in the ACA, I am repeatedly asked, “How come I haven’t heard that before?” Fair question.
Remedy and Reaction comes at an opportune time to break through the misunderstandings and falsehoods about health reform, and its author, Paul Starr, is ideally positioned to take on this daunting responsibility. Starr is a founding co-editor of The American Prospect and author of The Social Transformation of American Medicine, a deservedly well-regarded history of American medical care and health policy that won the Pulitzer Prize in 1984. Remedy and Reaction concisely explains what often seems inexplicable—why about 50 million Americans lack health insurance even as the country leads the world in health-care expenditures, accounting for more than 17 percent of GDP.
Remedy and Reaction’s comprehensive history of health-care reform from the early twentieth century through the passage of the ACA traces the slow, torturous, and often futile efforts of reformers to expand health insurance to all Americans. Reform was persistently obstructed by conservatives and the swelling army of interests devoted to protecting the status quo by exploiting James Madison’s byzantine institutional miasma and the fissures within both parties (especially the Democratic Party). Opponents repeatedly defeated national health insurance and shaped the reforms that were passed, imprinting significant new programs with the constraints, limitations, and selectivity demanded by stakeholders and political coalitions.
The “perennial disappointment” of liberals who sought health insurance for all has a long history, beginning at the end of the Progressive Era, when European interventions gave impetus in the United States to national and state reform efforts (instigated by the expert-led American Association for Labor Legislation) that were blocked by divisions among allies (including labor) and by the insurance industry—even before it had established a giant stake in the sector. The Great Depression created the extraordinary opportunity that accompanies extraordinary crisis, but Franklin Roosevelt judiciously held back on national health insurance to ensure passage of Social Security in 1935, and though they tried, he and successor Harry Truman never enjoyed a similar opening again.
Reformers regrouped in the late 1950s around what became the Medicare legislation that Lyndon Johnson signed into law in 1965—an approach that scaled back progressives’ universal aims in favor of covering hospital care and associated physician services for those on Social Security and solidifying a federal-state program for the indigent (Medicaid). Starr describes this episode as representing a “brilliant [political] coup” for LBJ, but “not exactly a liberal one.” Medicare, Starr reports, became a “source of the persistent inequalities and high costs of the American health-care system.”
Remedy and Reaction then charts the stalemate and incremental reform of the nearly three decades following Medicare’s passage. Comprehensive reform was scuttled by ideological battles between the parties and divisions among Democrats as well as by fiscal constraints. But reform did not stop. Starr highlights the “unexpected course” pursued by Ronald Reagan, who talked of dismantling the New Deal but signed on to substantially expanding Medicaid and created direct federal control of Medicare’s reimbursements, which began with hospitals and was widened by subsequent presidents to physicians and outpatient services. (In a striking historical paradox, Reagan’s inauguration of this government payment system for Medicare created the precedent for later progressive proposals for rate regulation that would extend to private providers.)
The book devotes extensive attention to the defeat of Bill Clinton’s effort—one in which, Starr notes, he played a role as an adviser. His recounting of the well-known context and contours of Clinton’s effort offers a fair enough guide to readers who are just coming to health reform or care to relive the trauma of 1993-94. Starr acknowledges the missteps by the Clintons but assigns the balance of culpability to the “center fail[ing]”—the “deals that were never closed… compromises never reached, [and] backpedalling by Republicans, moderate Democrats, and key interest groups that abandoned proposals they had earlier endorsed.”
He is absolutely correct that accommodation and compromise with stakeholders and legislators is necessary to build winning coalitions. This is the defining feature of nearly all successful major social reforms, and it explains Starr’s mixed assessment of the original Medicare legislation. For the Clinton effort, the question is whether the center failed, as Starr puts it, or if it never existed in the first place for the complex reform that Clinton proposed. After all, Clinton came into office hobbled by a weak mandate after failing to win a majority in the 1992 elections and, in familiar constraint to observers of recent reform efforts, Democrats failed to win the 60 seats in the Senate that were critical to overcoming a filibuster.
Republicans capitalized on their subsequent 1994 congressional wins to push for restructuring Medicare and Medicaid, but they “over reached and were forced to retreat.” Both parties pulled back from unwinnable systemic reform over the next decade—Clinton tinkered with private insurance and expanded access for children, while George W. Bush ushered in the largest expansion of Medicare since its inception by cajoling congressional Republicans to create prescription drug coverage, though without dedicated funding.
The 2010 health reform justifiably receives the most attention. Remedy and Reaction concisely limns the context: the acceleration of the problems that Clinton had sought to tackle—shrinking access, skyrocketing costs, and inefficiency—along with the coalescing of reformers around the “Massachusetts Model” of subsidized and regulated private insurance markets. The book’s longest chapter is devoted to describing the process by which the ACA passed.
Remedy and Reaction ably synthesizes previous research on the history of health reform. Unfortunately, though, it is not a guide for those wanting to learn about what the ACA does in concrete terms and the historic departures it makes from America’s long history of defeat. That’s a shame given the book’s outlining of the historic backdrop of the 2010 reform and Starr’s record as an accomplished scholar and editor devoted to communicating broadly. Remedy and Reaction’s discussion of what the ACA does is encased in a seminar on “public philosophy” that is somewhat helpful to a small group of scholars but is nearly useless for everyday readers (including dejected progressives). The previously readable prose is replaced by jargon and belabored hairsplitting.
Moreover, Remedy and Reaction belittles the outcome of negotiations that lawmakers pursued to win the center and survive the booby-trapped legislative process—the very process of finding compromises and striking deals that he believes was needed to save the Clinton plan. Starr has been on record elsewhere as a supporter of the ACA, and his book does note that “rarely has a big reform been so widely dismissed as too small even by many of those who supported it.” But the dominant outlook in Remedy and Reaction is that the ACA is a “minimally invasive model” that is “notable for what it leaves unchanged.” Jettisoning the American context that it charts in its previous chapters, the book adopts a series of abstract standards by which to judge the ACA—it is “comparatively limited” vis-à-vis other democracies, falls short of the “ideal remedies” favored by advocates of single-payer financing and a nationally compulsory public option, and fails to create a “new system.”
Plain, simple words convey three important payoffs that are significant departures in American health reform history. First, access is substantially expanded: Seniors with drug bills are rescued from the “doughnut hole” left by President Bush; new subsidies are directed at middle-income Americans (up to about $90,000 annually for families of four) who had been unable to afford private insurance; and the poor are shielded from savage state rules—for the first time, there are minimum national eligibility standards set above the poverty line (at 133 percent), including coverage for poor people without children (many states had previously excluded them).
Second, the ACA transforms the insurance industry from one that avoids risk by dodging (or dropping) the ill and those susceptible to costly medical care. Instead, it requires insurers to cover everyone (including the children of the insured up to age 26) and to devote at least 80 percent of their customers’ premiums to providing and improving medical care.
Third, the ACA pays for its initial nearly $1 trillion cost by recouping billions from private insurers in Medicare Advantage and pharmaceutical and medical device suppliers, and by enacting “hidden” tax reform—an increase in the existing Medicare’s payroll tax for the affluent and, in a breakthrough for social insurance financing, a new Medicare tax on capital gains. Much depends on implementation, of course, but the range and diversity of its efforts to restrain health inflation are without precedent—for example, establishing a Federal Reserve-like independent commission to restrain health expenditures in the face of lobbying by vested interests.
The dreary drumbeat about the ACA’s minimalism and limits that courses through the coverage by mainstream and progressive media fosters unilateral disarmament in the face of a mobilized conservative onslaught. It fuels the misperception that the ACA is not worth fighting for and distracts from the dire need for counter-mobilization. It also diminishes the urgency of forming coalitions and tactical alliances with an expanding coterie of strange bedfellows—state Republican officials, businesses (including state chambers of commerce), and a host of stakeholders whose support for the ACA has remained or who have dropped their earlier opposition (as in the case of insurers) as interests and opportunities have changed.
The states are a central arena for health reform, and the stakes are high for our own time as well as for future battles. But Starr focuses on the national stage and neglects the critical importance of what is happening in the states. Although the most progressive reforms were defeated in Washington, D.C., Vermont is moving toward creating a single-payer system, and Oregon and perhaps other states are heading in the direction of a public option. State flexibility has also ushered in a nearly unnoticed and highly significant engagement of state Republican officeholders. While the media portrays a ferocious unified conservative opposition to the ACA, key components of health reform (especially the new insurance “exchanges”) are being planned and implemented in GOP-controlled swing states (including the conservative Republican administrations of John Kasich in Ohio and Scott Walker in Wisconsin) as well as generally red states like Mitch Daniels’s Indiana and conservative bastions like Haley Barbour’s Mississippi. What’s going on in the states deserves concentrated attention and creative coalition building.
How the 2012 elections play out will be decisive not only, of course, for control of the President’s veto pen but also for control of Congress. The Senate’s arcane rules will pose stark challenges to outright repeal (as they did to enactment) even if the ACA’s implementation suffers delays or selective eviscerations. Shifting alliances and new interests may dampen efforts to repeal health reform: Well-organized Medicare beneficiaries who vote at high rates can be organized to fight hard against cuts to their new benefits; the scaling back of new protections against insurance marauders should elicit vociferous protests from consumer groups and congressional constituents (including those in Republican districts); insurers themselves may well push for the individual mandate (or a similar mechanism) if they continue to be required by law to accept all comers. The stickiness of administrative law may make a quick dismantling of new insurance regulations more daunting than currently imagined. (Republican leaders have begun to shift from “repeal” to “repeal and replace” and, more recently, to “waivers,” which appears to concede implicitly that the ACA’s basic framework survives.)
Meanwhile, the constitutional challenges that will be heard by the Supreme Court have been resisted and reframed by most lower courts of appeal. Although perhaps not likely, some of the Supreme Court justices—including some of the Republican appointees—may see institutional wisdom (as the 4th Circuit Court of Appeals recommended) in ducking the highly political case for the time being. The justice likely to cast the decisive vote on the Supreme Court, Anthony Kennedy, has a history of pragmatism that may leave him unwilling to approve the full repeal or gutting that conservatives seek. Even if the Court does strike down the individual mandate, there are other mechanisms to discourage free riding that lawmakers or the Administration could adopt. As the Government Accounting Office reported earlier this year, enrollment could be encouraged by imposing fees for signing up late, making it easier to join by extending assistance to individuals, and conducting effective public outreach—a strategy used by Lyndon Johnson in the mid-1960s to swell enrollment in the voluntary part of Medicare above initial estimates.
Implementation of the ACA opens a new chapter in the politics of health policy, much as the passage of the Social Security Act in 1935 started a struggle over income security for seniors that continued for generations. As with the ACA, Social Security began as a limited program that fell far short of reformers’ preferred remedies, leaving out, for example, agricultural and domestic service workers. To win votes in Congress (especially southern Democrats), the legislation excluded about two-thirds of all African-American workers (upwards of 80 percent in parts of the South) and over half of all working women.
The story of limited beginnings followed by expansion is common. It also describes the trajectory of Medicare, whose benefits have widened considerably since its passage in 1965 and is now a potential platform for a single-payer system. The ACA fits within America’s history of pragmatic realism. If the ACA withstands today’s savage onslaught in the face of tepid support from many of its natural adherents, it will likely generate a range of options for the next round of reformers intent on further widening access and controlling costs. Tomorrow’s pragmatic problem-solvers are likely to build on the ACA’s areas of effectiveness and the new precedents it sets and to seek new solutions to its shortfalls.
Opponents of reform well understand the significance of the ACA for future health policy, which accounts for their speed and ferocity in building well-financed and potent national and state operations. This level of awareness and engagement is less evident among supporters of reform—including advocates for single-payer financing and the public option. The future of health reform—and the remedies most favored by progressives—depends on sustaining the ACA by conveying its importance in clear and compelling terms, by building inclusive coalitions, and by exploiting the new developmental trajectories that the ACA initiates.
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