Health Care Reform: Could it have gone differently?
In the wake of the all-but-certain collapse of health care reform legislation, there has been a lot of analysis about how this could have gone differently. Was there a different path that would have resulted in success? I thought I’d throw my two cents in for what it’s worth.
First of all, I think it’s important to note that if Congress had succeeded in getting a health care reform bill onto the president’s desk before January 19th, the press would probably have proclaimed Obama a legislative genius who had succeeded where many other presidents had failed. For the press—as for many of us—nothing succeeds like success.
At the beginning of Obama’s term, there were a few voices—Bill Galston outside the administration and Vice President Biden within it—who counseled the president to postpone consideration of health care reform until the economy had recovered. David Brooks offered similar counsel, suggesting that Obama would have to rebuild trust in government before he would be able to move such a large initiative forward.
It’s not clear, though, that postponing consideration of reform until later in the president’s first term would have increased the likelihood of success. Even without the blowback from the reform debate, the Democrats would almost certainly have lost seats in both the House and the Senate in the 2010 elections, decreasing the odds of reform passing in the next Congress. Members of Congress would have resisted making hard votes in the run-up to that election, making reform a harder sell in 2010 than it was in 2009.
A second set of voices suggests that the President should have embraced more incremental reforms as a way of building broader support for the bill among Republicans. It should be remembered, though, that majority leader Harry Reid spent several months trying to hammer out a consensus among the Gang of Six, a group of moderate Democrats and Republicans.
That work, though, began to unravel after the Tea Party movement began to put pressure on Republican lawmakers to oppose reform. Two of the three Republicans on the group, Mike Enzi (R-WY) and Chuck Grassley (R-IA) began to distance themselves from the reform discussions. Grassley, in particular, suggested at one point that the public had “every right” to be afraid of the end-of-life language in the House bill, which had been characterized by grassroots GOP activists as “death panels.” While it was probably reasonable to give Grassley some room to shore up relations with his base, many Democrats in the Senate thought Grassley had clearly crossed a line. They began to fear that the Republicans were simply dragging out the negotiations to inflict political damage on the Democrats. By the end of the summer, there was increasing pressure on Reid from his caucus to go it alone if necessary.
Politics aside, one wonders whether a durable agreement could ever have been reached that would have garnered more than one or two Republican votes. The reality is that the Republicans’ favored reforms—caps on non-economic damages in malpractice suits and allowing insurers to sell policies across state lines—would only have had a minimal impact on health care costs and virtually none on coverage. The latter was also opposed by state insurance regulators since out-of-state insurers would not have had to comply with the insurance regulations of the new states where they were operating. While one suspects that technical problem could have been solved, the solution would probably have involved federalizing insurance regulation, an ironic outcome for a party generally committed to defending the prerogatives of state government.
The reality is that private health insurance is very expensive and, even under the most optimistic scenarios, it is going to remain very expensive. There is no way to insure 30 to 40 million people through private health insurance without spending a very large amount of federal tax dollars. Paying for that is going to require new revenues, i.e. taxes. The number of Republican lawmakers likely to sign on for this was always going to be small, and as time went on those lawmakers were under increasing pressure to stand with the rest of their caucus. Democrats, for their part, were simply not going to accept a bill that did not provide coverage to a large portion of the uninsured.
There has been some discussion about whether it would have been possible for the Democrats to get the vote of Olympia Snowe (R-ME) if they had been willing to compromise more. In some ways, she was more deeply engaged in the details of reform than Democratic senators like Ben Nelson (D-NE) and Joe Lieberman (I-CT). Snowe, though, did not seem to have a strong sense of urgency about getting the bill done, and that raised questions about whether she was really willing to commit.
With the current reform bills going down in flames, we face the question of whether there is anything that can be salvaged. Some have suggested that the Congress should pass the pieces of reform that have bipartisan support, such as insurance reform. The problem is that the pieces of reform are designed to work together. If you are going to use private insurance to insure the uninsured, you have to require them to take everyone regardless of health status. But if you do that, you create a risk that only the sick will buy insurance. One of the reasons for the individual mandate is to bring the healthy into the risk pool to balance the sick. But if you are going to mandate that uninsured families buy policies costing several thousand dollars, you need a system of subsidies to make it affordable. If you do all that, there is almost no way to avoid having a very large, complex and expensive bill.
There are also some thoughtful conservatives and liberals wondering why Obama didn’t just propose a simple Medicare buy-in for those 55-65 and a broader Medicaid expansion for poor families. I have to say that it is somewhat ironic to see this idea being floated by conservative thinkers like Ross Douthat and Reihan Salam. But liberals like Ezra Klein like this too, particularly since it could probably be done through the Reconciliation process and only require 51 votes in the Senate. Whether any actually existing Republican officeholders would support this remains to be seen, however.
I could go on, but I think you get the idea. There was never going to be an easy path to reform. All conceivable paths to reform legislation that cover a large number of people will cost a lot of money and gore more than few sacred cows. This particular effort came closer to passage than any other in the last 60 years. I am having a difficult time imaging an alternative approach that would have improved the prospects for success.
There are two final ironies in the collapse of this particular reform effort that I want to highlight. The first is that the bills rejected by the Republicans this year contained policies that many of them supported back in 1994, including an individual mandate, group purchasing arrangements, and tax subsidies to help individuals purchase coverage. Of course, that also implies that things the Democrats found unacceptable in 1994 they are now willing to accept! In any case, both parties have arguably moved in a more conservative direction since then. These bills were hardly “socialism.”
The second—and related—irony is that the Republicans success in using the Senate filibuster to kill the current round of reform may ensure that future efforts to expand coverage rely on public programs like Medicare, Medicaid and CHIP rather than private insurance. There are reasons—which I may elaborate on another time—why I am not necessarily sure that is a good outcome. But if pushing reform through Reconciliation becomes the only way to get any reform at all, I suspect the Democrats will ultimately embrace it.