Inside National Health Reform
By John E. McDonough
UNIVERSITY OF CALIFORNIA PRESS Copyright © 2011 The Regents of the University of California
All rights reserved.
The Knowledge Base—Why National Health Reform?
In national politics South Dakota is a reliable red state, a backer of Republican candidates in every presidential election since 1968—even rejecting its homegrown Democratic candidate, George S. McGovern, in 1972. Reflecting this orientation, of the fifty-one Democratic U.S. senators in the 110th Congress (2007–08), South Dakota senator Tim Johnson was ranked the thirty-ninth most liberal. The state's "red" designation does not diminish the hurt that many residents experience from having inadequate or no health insurance. As the national health reform campaign heated up in the spring of 2009, Senator Johnson—himself the victim of a congenital brain illness—asked his constituents to write him describing problems they experienced getting insurance and medical care for themselves and their families. He circulated these messages to his Senate colleagues in May. A few of those stories, edited slightly for clarity and grammar, are shared below.
I am a 58-year-old teacher at Roslyn School in northeast South Dakota. Our school is closing in June of 2010, which means I will be losing my job and my health insurance. I am a type 1 diabetic, and I had heart bypass surgery in 2005. My husband is also a teacher at Roslyn, so we will both be losing insurance. I am exploring other options and have been told that I cannot stay on our group policy or transfer to another policy after our jobs cease because of my medical condition. What am I to do after 39 years of teaching to acquire adequate health coverage?
We currently have health insurance. We pay approximately $8,000 a year and have a $10,000 deductible per person. We average another $6,000 out of pocket for medical expenses, since we have had no major health issues. When we were shopping for insurance over four years ago, my husband and I were refused coverage by Blue Cross/Blue Shield, and our two boys were offered coverage, but not for anything they had previously been treated for.... I would be very grateful if there was another option for those of us that do not have health insurance through an employer.
My wife had lung cancer in 1990, and for that reason we cannot get health insurance of any kind. Now she has lung cancer. As of April 24, 2009, we have no insurance. I am not a rich man. We are taking tests now. I expect the cost of all these tests and the treatment will wipe us out. I have gone door to door for Obama to get some kind of insurance, but it will be coming too late. I own my business, but I think it will take everything I have. Do I worry about my wife? Yes, I do. I don't know how I will ever be able to pay for all this.
I am a small business owner for over 30 years. I lost my health insurance several years ago. Could not afford the premiums any longer. I ended up in the hospital from food poisoning and again later for heart problems. Now my finances are a big mess and I am filing for bankruptcy. I am 55 years old and it's going to be very difficult to start over again, but what else can I do? ... How can a small business operator like me survive?
I am 31 years old, married, and have four children and one stepchild ranging from 2 to 13 years old. My husband works on the family farm.... We can't afford health insurance because it costs too much. I have medical problems that I can't afford, so I don't go to the doctor.... I was healthy up 'til 2003 when I had my second to last children, and from there I have had problems. I have Raynaud's disease, had pre cancer two times, my gallbladder does not function right, and my teeth are unreal and painful.... It's not fair that I fear I won't live to see my children grow into adults and their children because I can't afford medical.
Government getting involved in health care will DESTROY the excellent health care we now have!!
WHEN DID U.S. LEADERS BEGIN PUSHING FOR HEALTH CARE REFORM?
Fixing medical care and health insurance in the United States has been a public policy concern for about a century. Often credited as the first national political leader to focus on this issue, Theodore (Teddy) Roosevelt called for some form of national health coverage in 1912, when he was the unsuccessful presidential candidate of the Bull Moose Party, though he had made no reform effort in his earlier years as president. His cousin Franklin Delano Roosevelt was the first chief executive to attempt establishing national health insurance during his White House tenure. FDR tried several times to instigate a national discussion; he considered including health insurance in legislation that became the Social Security Act of 1935 but retreated when opposition from the American Medical Association threatened to unhinge the entire effort. In 1943 he directed aides to begin working on national health insurance legislation, but he died in 1945 before any bill was introduced. FDR's efforts showed for the first time how difficult achieving reform would be, how powerful interests could thwart the process, and how critical presidential leadership was. "The only person who can explain this medical thing is myself," FDR told his treasury secretary, Henry Morgenthau, in 1943.
Harry S. Truman adopted FDR's plan as his own and urged Congress in repeated messages to enact it into law, the first time in late 1945. In many respects the Truman-FDR plan was the most ambitious ever promoted by a U.S. president—proposing what many would recognize today as a Canadian-style single-payer public health insurance scheme well before Canada had such a plan of its own. Yet the legislation filed in Congress by his allies was purposefully vague, in part to avoid the jurisdiction of the Senate Finance Committee, which sponsors believed would never give the bill a legitimate hearing. Further, his lackluster efforts to promote the cause left his supporters disheartened and his opponents triumphant, demonstrating the indispensability of presidential leadership in thwarting the inevitable and potent backlash from powerful interests. Toward the end of his tenure as president, he quietly authorized his aides to work on less ambitious legislation to provide health insurance coverage for the elderly—the start of a thirteen-year legislative process.
In 1961, John F. Kennedy took up the cause of health insurance for senior citizens with vigor. Though he did not realize success before his November 1963 assassination, he laid the groundwork for his successor. It was Lyndon Baines Johnson, boosted by new and strong Democratic majorities in the Senate and House, who in 1965 achieved the passage of Medicare and Medicaid, the nation's most ambitious health insurance advance until 2010, opening new chapters in U.S. health policy history that continue unfolding to this day. LBJ's lessons for his successors were many: move legislation early and quickly, leave the details and credit to Congress, see the president's role as summoning the nation's political will, and don't let budget writers hold you back. These strategies gave the nation its first momentous health reform law—even though it was restricted to elderly persons and some disabled and poor individuals. At the time, many believed the 1965 law was only a prelude to a full Medicare for All system, which would arrive sooner rather than later.
Richard M. Nixon embraced the goal of universal health insurance with a twist. Rather than advance publicly sponsored coverage à la Medicare, he proposed private coverage for most Americans, strengthened by federal mandates: most employers would be required to cover their workers, and individual workers would be required to enroll. His plans were waylaid by the Watergate scandal, which ended Nixon's presidency in 1974 as well as another chance at reform. In his other legislative efforts, including approval of a 1973 law to promote the development of health maintenance organizations (the first form of "managed care"), Nixon was the first president to attempt meaningful reform in the delivery of health care services in order to hold down the rising costs of health insurance and medical care—a preoccupation that attracted the attention of every succeeding chief executive, committed to universal coverage or not.
Jimmy Carter advanced a national health reform plan that resembled Nixon's formulation, offering catastrophic coverage with an employer mandate and a new federal "HealthCare" program to replace Medicare and Medicaid for all elderly, disabled, and low-income individuals; it was tied to a package of reforms to constrain physician and hospital costs and was intended to be phased in over time. The cost control part of the plan was introduced in June 1979, halfway through the third year of Carter's difficult term in office, showing that his passion for coverage was eclipsed by his determination for cost control. His signature legislation to contain hospital costs passed the Senate and was defeated in the House. Carter's experience demonstrated the risk of waiting to move on an issue as volatile as health reform, and the difficulty in sustaining a reform agenda.
Universal coverage reemerged as a compelling political issue in 1993, when Bill Clinton staked his young presidency on achieving national health reform, placing Hillary Rodham Clinton in charge of the cause and a five-hundred-person White House task force. That effort, begun with high hopes and optimism, foundered in Congress, and the backlash from the failed effort along with a lackluster economy and other political setbacks in the early Clinton administration helped Republicans reclaim control of the Senate and House of Representatives in the November 1994 midterm elections. This failure taught Democrats lessons galore, among them: the president should not micromanage the congressional process, and the effort should not threaten the coverage of Americans who want to keep what they have. Some wondered if comprehensive health reform was just too much to achieve. The 1993–94 failure weighed on the minds of political veterans who reengaged in 2008–09, inside and outside of government, and helped create both motivation and a determination to get it right.
No more presidential efforts were made to achieve comprehensive national health reform until the inauguration of Barack Obama in January 2009.
THE EVOLUTION OF UNIVERSAL COVERAGE AS AN ISSUE
But what drove eight of the thirteen presidents since 1933 to work for national health reform and, specifically, for some form of universal health insurance coverage? In the beginning, back in the late nineteenth and early twentieth centuries, national health reform was about income security, replacing income that had been lost as a result of illness or disability—that was it. Germany started a form of national insurance coverage in 1883 under Chancellor Otto von Bismarck, other nations followed, and the push slowly spread to the United States. In 1912 Teddy Roosevelt advanced the idea in his failed presidential campaign, though anti-German sentiment of the time was one of many factors stalling the notion. In the 1930s, there was policy logic in tying health insurance to Social Security in FDR's New Deal reforms—health and disability coverage together—but the merger could not achieve political logic. With the lack of government action, private health insurance began to emerge in the 1920s and 1930s, first in Texas and California, and then across the nation. It started mostly as nonprofit and hospital- or physician-controlled and spread as a private, for-profit commercial enterprise only after World War II, chiefly as an employee benefit offered by employers. During the World War II wageand price-control regime, buying health insurance for workers was discovered as a way that employers could circumvent federal wage controls in the competition for scarce labor, and it was advanced by a crucial Internal Revenue Service ruling that money paid by employers for health insurance premiums was not taxable as wages. In 1954, President Dwight D. Eisenhower signed legislation enshrining that practice and interpretation into federal law—a fateful move that became a central part of the reform conversation in 2009–10.
While many developed nations devised health systems reliant on varied forms of public coverage, the United States endorsed and promoted a system of private health insurance, mostly through employers, for those who could afford it. Beginning in 1965 with the creation of Medicare and Medicaid, the federal government and states began a long process to fill in the holes by providing public or publicly sponsored private coverage to select groups. Medicare and Medicaid were expanded incrementally to cover politically attractive and needy populations; the Children's Health Insurance Program was created in 1997 to extend coverage to many uninsured children and their parents. Various state governments stepped in with their own coverage expansions and innovations, with and without federal support.
In spite of the expansions, the number of Americans without any health insurance has grown nearly every year since data were first collected. During the Clinton health reform efforts, about 37 million Americans lacked coverage. By the time the Obama effort got under way, the number had risen to approximately 47 million, a number that reached 50.7 million by 2010 with the impact of the economic downturn. Official estimates looking ahead to 2019 projected that, without reform, the number would rise to between 54 and 61 million.
Though the uninsured are a diverse population, some trends in their numbers are clear. People without insurance tend to be poorer and younger adults, racially and ethnically diverse (just over half non-Caucasian), employed in businesses with fewer than fifty workers, less educated, and more likely to live in Sunbelt states than their insured counterparts. And being uninsured has health consequences. During the past decade, the Institute of Medicine has released a series of reports to document the relationship between a lack of insurance and poor health. In 2009, the IOM updated its findings to inform the congressional health reform process:
A robust body of well-designed, high-quality research provides compelling findings about the harms of being uninsured and the benefits of gaining health insurance for both children and adults. Despite the availability of some safety net services, there is a chasm between the health care needs of people without health insurance and access to effective health care services. This gap results in needless illness, suffering, and even death.
The IOM, in its earlier reports, had estimated that approximately eighteen thousand Americans die every year due to a lack of health insurance. In 2009, another group of researchers, using more recent data, concluded that the number of deaths due to a lack of health insurance was closer to forty-five thousand.
During the decade prior to the 2009–10 reform effort, awareness had grown of access problems that affected not only the uninsured but also the "underinsured": those whose health insurance policies contained limitations, loopholes, and cost-sharing requirements that placed them at financial jeopardy in the event of serious illness or injury. Cost sharing takes various forms, including co-payments at the point of service, deductibles that require a set patient payment before insurance payments begin, or co-insurance requiring patients to pay a set percentage of all medical bills. Studies show as many as twenty-five million underinsured adult Americans in 2007, up fully 60 percent since 2003. Recent research has attempted to quantify the proportion of Americans facing bankruptcy whose financial problems were related to medical costs and has determined that the majority of those undergoing bankruptcy proceedings had burdensome medical debts, and that a majority also had health insurance policies leaving them exposed to serious financial harm. (Continues...)
Excerpted from Inside National Health Reform by John E. McDonough. Copyright © 2011 The Regents of the University of California. Excerpted by permission of UNIVERSITY OF CALIFORNIA PRESS.
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