David Coates

Chapter 6: After the Vote

Several key developments immediately followed the passing of the “Patient Protection and Affordable Care Act” on March 21 2010.

  • Details of the Act became readily available on the website of the Kaiser Family Foundation, where you can also see a comparison between the various bills canvassed in 2009, and a comparison of the Act as passed and the Chafee legislation proposed in 1993. The Kaiser Foundation claimed to see striking similarities between the Democratic Bill of 2010 and the Republican proposal of 1993. The Republican proposal of November 2009 was entitled The Common Sense Reform and Affordability Act, and prioritized lowering premiums, creating universal access programs that expanded and reformed high-risk pools and reinsurance programs, allowed Americans to buy health insurance across state lines, develop Health Savings Accounts, and end junk law suits. The Act was offered as fiscally neutral but was not costed that way by the CBO.
  • A number of republican state officials moved to have PP&AC struck down as unconstitutional, arguing that the individual mandate within the Act (obliging everyone to buy medical insurance or face a fine) falls foul of the Commerce Clause. The matter is now moving its way through the courts. Away from the courts, Republican criticism of the Act continued to focus on its impact on costs (see for example, Robert J. Samuelson, ‘With health bill, Obama has sown the seeds of a budget crisis”, The Washington Post, March 29, 2010); and to offer legislation to repeal the Act. Repeal initiatives in the House by Michele Bachman n and in the Senate by Jim DeMint were both slow to recruit Republican sponsors: the Bachmann bill had only 52 co-sponsors by the end of April, the DeMint bill just 20 co-sponsors.
  • Richard Foster, Chief Actually at the DHSS Centers for Medicare and Medicaid Services, issued a report April 22 (Estimated Financial Effects of the PP&AC Act, as Amended) in which he challenged the Democratic Party claim that under the Act’s terms, health care costs would fall. He estimated a $311 billion (0.9%) overall national health expenditures increase during calendar years 2010-19, primarily due to the greater utilization of health care services by the 32 million new participants. (At www.cms.gov/ActuarialStudies/Downloads/S_PPACA_2010-01-08.pdf – 2010-02-21 ). The report was seized on by critics of the bill as validating their case, and was equally quickly challenged by its supporters. For the former, see http://www.john-goodman-blog.com/obama-administration-report-is-a-devastating-critique-of-obamacare. For the latter, see http://voices.washingtonpost.com/ezra-klein/2010/04/a-health-care-rorshact-test.
  • Democratic Senators Tom Harkin and Dianne Feinstein moved in April to design legislation to block excessive insurance premium increases, as the President began a road tour to win support for the legislation. Opinion polls continued to show overall unease with the Act but strong support for individual elements within it, as people battled with the fear of rising costs while welcoming the relief from the arbitrary loss of health care cover. US health care spending slowed in 2008 – its 4.4% growth was the slowest for 50 years – as the recession caused employers and consumers to cut back; but the growth rate still exceeded that of the economy as a whole. Demand for free medicine in 2009 soared, underscoring the degree to which unemployment in the US is accompanied by loss of health care coverage (The Financial Times, April 6, 2010). Meanwhile, as 2.7 million Americans lost health cover, the leading five health insurers (UnitedHealth Group, WellPoint, Aetna Inc, Humana Inc and Cigna Corp) reported profits up 56% in 2009 over 2008, at $12.2 billion! On this, see http://www.HealthCareforAmericaNow.org.
  • For a defense of the Act, see http://www.alternet.org/story/146134; and the following address to a Wake Forest University colloquium on the Act immediately after its passage.
  • Say this
  • 1. The Context We need to remember what was in place before the bill was passed; and the very real trajectory of health care costs without reform – costs that were rising at twice the rate of inflation. Large gap in access, leaving out one American in seven. Sudden spike in lost coverage as 8 million jobs go in the recession triggered by the September 2008 financial tsunami. An unreformed health care system that ranked badly internationally (WHO had it at 57 in 2000): unusual combination of high quality medicine and cutting edge procedures on the plus side, while of the negative side huge problems of un-insurance and under-insurance, with associated high levels of medically-induced bankruptcies; looming crisis of public fundability for Medicare and Medicaid; diminished coverage by employer-based provision, and higher deductibles on the packages provided; serious issues of quality control and public confidence. And of course the whole question of size. Other modern industrial societies provide health cover to all their citizens while dedicating a far smaller percentage of their GNP to the task than we do. We get a low bang for our buck. Not an ideal status quo, hence the call for reform.
  • 2. The History Not surprising that reform was necessary. Nothing particularly American or planned about the health care system that the reformers faced. The US story is unique in comparative terms in the very haphazard and patchwork nature of the processes that created today’s health care system. Health care was left out of New Deal legislation in the 1930s because of the opposition of Southern Democrats. Universal health care initiatives failed twice in the post-war period: 1948 and 1994. In its place emerged a unique post-war settlement of employer-based health care for those workers able to get it: health care tied to jobs and union contracts: with publicly provided coverage alongside this private system that was incrementally extended: first to Veterans (1948); then to the old and the poor – Medicare, Medicaid (1964); then to the children of the nearly poor – SCHIP (1996/7). Left us a patch work of different health care systems. Most modern industrial societies have one system. We have four. The Veterans Administration is really a pocket-size US version of the UK’s NHS; Medicare and Medicaid are like the Canadian single-payer system; we have insurance-based coverage for most working-age Americans on the German and French lines; and for those without insurance/having to buy their own, then like the Gambia. A genuine mess, with boundary problems all over the place!
  • 3. The Politics The mess a function of both our political system and of the deep philosophical positions that still uniquely divide us. (a) Politically, we operate inside a Presidential system, with checks and balances, a separation of powers, federalism and independent legislators. Not parliamentary democracy. No party discipline (certainly not on the Democratic Party side, just a pack of demented cats that have to be herded together: huge effort normally for little gain). No coherent programs to be voted up or down; but portmanteau bills with special interests, lobbyists and pork – lots of pork. We have just had one. (b) Profound philosophical differences still in play here in a way without a European equivalent. The centre of US political debate is way to the right, when compared to Western Europe. Obama would be a Western European Conservative. We fight health care as a clash between two polar positions that could not be more different the one from the other. On the one side, health care to be thought of as a commodity like any other, to be distributed by the market. On the other, health care to be thought of as a social right, the exact opposite of a commodity, not to be dispensed by the market but to be dispensed by the state. With the first, you necessarily get access issues – because incomes differ so. With the second, you get free rider issues, and the danger of over-use. Between the two, ‘pay or play’ compromises – with employers providing health care coverage by buying private insurance packages, or contributing to a fund that buys those packages for employees without cover: still commodity-based, insurance provided, but with federal help to facilitate a more equal participation in the health market-place. The Obama bill is definitely in the ‘pay or play’ tradition. It satisfies neither polar position.
  • 4. The Dilemmas Not a perfect bill, but that is not possible. Not just because of our political system but also because of the nature of health care systems based on insurance cover. Endemic issues in health care cannot be avoided. All health systems involve rationing (by class or by time or by need). All modern health systems face a cocktail of rising expectations and rising costs. Each has to handle problems of uneven consumer knowledge and episodic health care requirements. Insurance-based systems always face issues of adverse selection and moral hazard. Every medical system in the world faces choices between professional autonomy and fiscal prudence. Those choices are always there. They are in this package. Cannot criticize the package for containing them. You can only criticize the package for the choices made on each of these inescapable dilemmas.
  • 5. The Underlying Contract This bill is not a government take-over of health care. The Government is not the winner. Insurance companies are the big winners: more clients, subsidized by the state. The poor are the other big winners – access at last for most of them, though not all. We are all winners, even those of us adequately covered already – to the degree that our health care security increases, and to the degree that the small detailed changes (on things like pre-existing conditions) matter and kick in. We are also all losers, to the degree that the bill is stronger on access than on cost control, and to the degree that health cost inflation continues to outstrip the rate of wage increase. All women win, to the degree that gender rating is reduced or eliminated. Young women in particular win to the degree that pregnancy and domestic violence are no longer discriminated against as pre-existing conditions. They all lose to the degree that access to abortion is made progressively more difficult. What we have are a set of winners and losers in this legislation, and as such a resetting of the social contract that is endemic to health care: a social contract between the sick and the healthy, the young and the old, the rich and the poor, men and women both. When we discuss the detail of the bill, we need to keep that social contract in mind. If we don’t like the bill, we need to say what part of that social contract we want to change.
  • 6. The Work Still to be Done Should be thought as a beginning. Got now to tackle (a) implementation issues – very demanding (b) transition issues – huge; and (c) long-term cost control issues. Not by repealing, but by deepening, legislation built on this more progressive social contract. This is the start. An adequate start, I think. One to be defended. But also to be built on

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

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