Without question the biggest domestic issue facing the United States in healthcare. After years of extempers discussing foreign policy issues such as the war in Iraq, the war in Afghanistan, and the United States role in the international system, the focus has shifted back to domestic issues as Americans become more concerned about the home front in light of the economic recession.
During the 2008 presidential campaign, President Barack Obama discussed the need to reform America’s healthcare system. This was a message that had been forwarded by President Bill Clinton, Vice-President Al Gore, and Senator John Kerry in their presidential runs dating back to 1992. However, in Clinton’s case healthcare reform failed and Gore and Kerry failed to find enough resonance with the issue to win their respective elections.
Due to this promise it is no surprise that Obama has chosen this issue as his first major domestic social challenge. However, the road to reforming American healthcare is complicated, likely more complicated than Obama had expected. This topic brief will focus more on the political aspect of healthcare reform and if a healthcare reform bill is passed in the fall there will be another topic brief that will break down the components of the healthcare package. Therefore, this topic brief will discuss the major issues with American healthcare, Obama’s strategy for passing healthcare reform, and the consequences for getting or failing to get a bill passed by the end of the year.
As a side note, I cannot recommend enough that extempers read as much as possible about the healthcare debate, looking at medical journals such as the American Journal of Medicine and other publications to get a sense of the problems that effect American healthcare. It would also be wise for extempers to read about other “national” healthcare systems that exist in Canada, Great Britain, and France because comparisons in speeches are never a bad idea. You will get questions on this issue during the year, whether the healthcare reform package goes through or not. This is especially prevalent for extempers attending the Wake Forest National Early Bird so it is best for extempers to be proactive in getting knowledge about the healthcare debate instead of being reactive in rounds.
The Debate
The number that is often touted to emphasize the need for a new healthcare system in the United States is 46 million. This is the estimated number of Americans who lack health insurance. The lack of health insurance is an important issue because health insurance helps to pay and/or subsidize the cost of medical treatments, attempting to make them more affordable for Americans (much like dental insurance). For those that lack health insurance, a medical disaster such as an injury on the job or a terminal illness can result in bankruptcy. The other problem the uninsured pose is that if they seek treatment at the emergency room and are unable to pay, hospitals have to raise the costs of the treatment for people who do have insurance, which results in higher costs in the U.S. medical system, especially the premiums people have to pay to acquire health insurance in the first place.
It has to be said that this estimated number of the uninsured is controversial and disputed. Opponents of this figure argue that it includes an estimated nine to twelve million illegal immigrants that often do not have health insurance coverage. There have been many debates in the academic circle about whether or not illegal immigrants pay enough in taxes to offset benefits they receive from government agencies, but opponents say that their mere existence in the United States makes the number of uninsured Americans suspect. Another argument is that there is a sizeable number of young Americans, who are regularly healthy, that choose not to purchase health insurance. There is also the argument that there are over ten million Americans who currently qualify for Medicaid assistance, the health insurance program for the poor that is managed by the federal and state governments, but do not apply for it. Finally, there are Americans who are frictionally unemployed and lose their health insurance coverage temporarily when they switch jobs. When all of these people are subtracted from the 46 million figure that is espoused by healthcare reform advocates, we get a number of nine to ten million that are uninsured. Advocates for a different reform package than Obama is proposing are suggesting that it would be cheaper to focus on this group of Americans who permanently do not have health coverage as opposed to the broad 46 million figure.
The issue of healthcare reform is also tied in with the economy. The main place that workers achieve their healthcare coverage is through their employers. If a worker loses their job in a tough economy, they often lose their healthcare coverage and are unable to transfer their health insurance to a new job. Not only does this result in paperwork, but it also creates anxiety among employees who fear that the loss of their job will open them up to a medical disaster. Managing the healthcare system in a better way to enable workers to keep their insurance packages is often pointed to as a significant part of any reform package.
Furthermore, medical inflation has long lingered in the U.S. system. The Manchester Guardian points out that Missouri State University did a recent study and estimated that the U.S. has experienced a medical inflation rate of twelve to twenty percent over the last five years. Advocates of reform say that the trend with new medical technology coupled with insurance packages has caused people to get treatments that are not medically efficient and are not needed. President Obama has used the example of his grandmother who had terminal cancer, but still had a hip replacement surgery done after she was diagnosed. He has questioned whether this was a good medical treatment in light of the conditions. Obama on the stump has also made some weird insinuations that doctors have an incentive to amputate body parts because they will make more money than other procedures, something that has been condemned by medical groups. Obama seeks to bring down costs through medical savings in eliminating the duplication of records. Paperwork is burdensome (and wasteful for some government programs like Medicare that have long documented histories of fraud) so what Obama wants to do is go to digital medical records which would eliminate this paperwork and make it easier for doctors to retrieve medical histories. This could eliminate administrative overhead and bring down costs, although opponents say the savings would be small. Opponents of the current reform package point out that instead of having government panels recommend treatments for people to reign in costs (this is what former Alaskan Governor Sarah Palin has controversially referred to as “death panels”), there need to be other structural changes. First, the argument is that medical costs are increasing because the U.S. population is aging. As baby boomers retire and age they are going to need more medical care so that is why costs are increasing. Second, the current healthcare legislation in the House does not have tort reform to limit punitive damages in medical lawsuits. Advocates for this reform argue that doctors have to worry about being sued for malpractice so much that they have to carry large malpractice insurance packages that end up increasing the costs for everyone else that seeks treatment. However, the Democratic Party does receive substantial political contributions from trial lawyers lobbying groups that have been very effective at defeating tort reform proposals in the past so it is unlikely that this will be part of any package.
A final reason that there are advocates who want healthcare reform is that insurance companies have been cutting those with pre-existing medical conditions. There have been several cases where insurance companies have denied coverage to a holder of an insurance policy because they argue that a condition existed prior to the policy being issued. There have also been cases where someone has come down with a medical condition and when it was time to renew their insurance coverage they were denied by the insurance company. Insurance companies argue that insuring people with pre-existing conditions will increase the costs on other policy holders because these people will need to be treated more. Another argument they make is that insurance is supposed to be a “just in case” phenomenon. If someone is going to contract an illness or has one and the insurance company is forced to insure them, what is the point of insurance then? Advocates of reform, though, point to lavish pay packages for insurance company executives and Democratic leaders have taken to demonizing the industry with populist rhetoric, with Speaker of the House Nancy Pelosi calling them evil.
Obama’s Strategy
President Obama wanted to learn from the failure of the Clinton administration to pass healthcare reform in the mid-1990s. In that attempt, then First Lady Hillary Clinton was put in charge of a special healthcare commission that met with a panel of experts to craft a healthcare package. The meetings were not open to the public and a media firestorm quickly erupted against the plan. Congressional leaders, especially those that were Republicans, were not allowed into discussions about reform and to make a long story short, the Clinton plan went down in flames because Congress felt that they were not adequately consulted on the measure. The plan was also defeated thanks to ads run by the insurance industry who convinced Americans that the Clinton plan would lead to rationed care.
To avoid this, Obama went in the complete opposition direction and decided to “outsource” the responsibility to Congress. The Economist prior to the presidential election argued that a big fear of an Obama presidency is that he would be too deferential to Congress in policy making and as major social packages such as the stimulus plan, the cap and trade bill, and healthcare go that is what Obama has done. The problem of “outsourcing” legislation is that it removes the president’s ability to lead and as any American can tell you, Congress is overrun by special interest groups of all types. As a result, legislation tends to be thick and burdensome and filled with paybacks that are often fewer in number if the executive plays a bigger role in policymaking (examples: Clinton’s welfare reform in 1996 and Bush’s No Child Left Behind legislation in 2002). Furthermore, having Congress write the legislation has led to chaos with there being one House bill, but four bills pending in the Senate so there is no clear picture for Obama to sell in regards to what he wants healthcare to look like. This has caused the president to talk in broad generalities instead of specific parts of the plan, something that has created public suspicion and led to a decline in Obama’s once high popularity ratings.
Now that members of Congress are on recess, they are fiery town hall meetings with voters in their districts/states. The most notable accounts have seen politicians such as Arlen Specter get heckled over their stance on reform. Conservatives overwhelmed initial town hall meetings and it is a matter of debate whether they have been paid for by conservative groups. The Democrats have tried to counter these protesters by busing in supporters and create friendlier town halls, but there is a legitimate concern about debate being stifled. It has not helped Democrats that some of their politicians have said that the actions of protesters are “Astroturf” instead of grassroots movements, that the protesters are not indicative of the rest of America, or that they are Nazis (stated by Nancy Pelosi). Whether or not angry town halls are representative of America, they do show the Obama administration that there is a part of America that is very angry with the actions of members of Congress and part of this comes from the 1,000+ page House healthcare bill that was nearly rushed through without being read. What the real message might be from the town halls is that members of Congress are becoming more and more out of touch with their constituents, which has some validity when you consider over ninety percent of Congress is re-elected every year, often times in non-competitive races.
In an attempt to contain the debate within his grounds, Obama’s administration opened a website for Americans to report on inaccuracies they were hearing about the healthcare legislation. Rights advocates fired back that this was akin to making Americans inform on each other. The White House has since pulled the plug on that attempt. Obama has also been going to town halls in New Hampshire, Montana, and Colorado to discuss his vision of healthcare reform and has been treated with respect. He was a hit in New Hampshire and Montana, but did meet more skepticism in Colorado. Replicating his campaign machine, Obama has also appealed for supporters to go door to door and has used the Internet to detail specifics in the plan to counter criticisms. However, a major problem with this is that there is not one healthcare reform bill for Obama to sell.
Consequences
There is a lot at stake for a healthcare reform bill being passed by the end of the year. Obama has discussed this issue at length and made it his most noticeable priority, thereby staking much of his political capital on the issue. A success would enable the administration to move forward with other pressing issues such as cap and trade and immigration reform, which Obama promised Mexican President Felipe Calderon he would tackle by next year. A failure, though, would embolden Republicans in Congress to block other Obama initiatives and could greatly disappoint Obama’s base that is still fervently behind his message of “hope and change.”
The biggest hurdle for a major healthcare overhaul is the Democratic Party’s liberal base insistence on a “public option.” This public option would result in the government establish a health insurance counterpart to rival private insurance. The idea behind that is that it would establish competitive between insurance companies and bring down the costs of purchasing health insurance. Opponents counter that it is a way for Obama and the Democrats to get America to go down the road to a “single payer” healthcare system where the government would have complete control over healthcare. The argument behind that is that unlike a private business, the government could afford to not turn a profit and because it had no profit motive it could undercut private insurance companies, gradually forcing them out of business. Another complaint is that the House bill imposes fines on small businesses with more than eight employees who do not provide insurance, giving those businesses an incentive to dump their employees into the public option. Also, because current private healthcare costs are high, employers would already have an incentive to dump their employees into a public option to avoid those costs. Opponents point to comments made by Obama and Barney Franks who have said that a public option is a way to work towards a single payer healthcare system.
The holdup of the public option is that although Nancy Pelosi might have enough votes to pass her bill in the House, the Democrats do not have sixty votes in the Senate if the public option is included. The Senate Finance Committee is where Montana Senator Max Baucus (D) is attempting to work with Republicans, notably moderates in the Republican ranks that include Olympia Snowe (Maine) and Chuck Grassley (Iowa), to craft a bipartisan bill. This would not have a public option, but would have consumer driven health cooperatives that would see hospitals and doctors help to establish these cooperatives that would be run by consumers like a private insurance company. The federal government would provide the start up money for these cooperatives, estimated to cost nearly $6 billion. The only hurdle here is that health cooperatives have a sketchy history. As The Baltimore Sun has pointed out, they were popular during the Depression but nearly sixty percent of them failed. Also, these cooperatives have traditionally been decimated by private insurance.
To win over support, Obama has sent out feelers that he is open to a compromise bill that increases competition in insurance markets and that does not include a public option. This has nearly ignited a civil war within the Democratic Party, as liberal members believe staunchly in a public option and do not want a healthcare reform bill to pass if it does not have one. There are other members on the liberal wing that think anything short of establishing a single payer system entirely is a sellout. Democratic liberals say that the government provides the elderly with good medical coverage through Medicare, so that care should be extended to all. The problem here is that Medicare, without reform, is set to go bankrupt over the next two decades. Therefore, a bill without a public option might lead to no healthcare reform as liberals would refuse to sign on to it but a bill with a public option would not overcome a filibuster in the Senate (which needs 60 votes). Senate Majority Leader Harry Reid (Nevada) has said that the Democrats could use budget reconciliation to pass healthcare reform with a public option, but this has two problems. First, it looks embarrassing for the party since they already have a filibuster proof majority in the Senate. Second, and most important, if the measure passes along purely partisan lines, it is almost guaranteed that Republicans will try to dismantle the system when they eventually retake control of Congress.
On a bigger note, the midterm elections are over a year away but cannot be taken for granted by Democrats. Although it is unlikely that Democrats will lose enough seats to lose the House of Representatives and lose their current margin in the Senate, they could still suffer some serious losses if they are unable to convince the American public that their package is best. Polls are showing that Americans prefer Republicans on healthcare by a 44%-41% margin over Democrats, a showing that is interesting when one considers that the Republicans have not presented a clear alternative to the Democratic plan. “Blue Dog” Democrats in the House, those who come from conservative or moderate districts and discuss fiscal discipline, are in a tight spot for the midterms because their constituents are not in favor of the government playing a larger role in healthcare. Constituents of these Democrats are also concerned that the Congressional Budget Office (CBO) has estimated that the House bill will add $239 billion to the deficit over ten years and explode after that, blowing a hole in the argument that this healthcare bill will result in cost savings in the long run. Some Blue Dogs have even cancelled or avoided town hall meetings with their constituents because they fear being embarrassed. While the Blue Dogs have been demonized by liberal Democrats, if the Democrats do not have these seats it is difficult for them to attain a majority in the House. Therefore, these Blue Dogs face a dilemma with the healthcare bill in the House: vote for bill and risk not being re-elected in 2010 or vote against the bill and risk a primary challenge orchestrated by Democrats against them and still lose their House seat.
There are many more issues at play than could be outlined in this brief and extempers would be wise to read as much about this ongoing debate as possible. The odds are that there will be some version of healthcare reform by the end of the year, but what shape that reform takes will be dependent upon polls and the attitude of members of Congress when they cast their vote. After all, there is one thing to keep in mind about the healthcare debate: while a majority of Americans favor giving insurance to the uninsured, nearly three-quarters of them are satisfied with their current health coverage and are loathe to give it up.