Why The Vote Changes The Health Care Debate Forever

Mar 22, 2010

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This column is a collaboration between KHN and The New Republic.

“There’s no fixing the government health care takeover Democrats forced through on Sunday. It must be repealed.”

So said Jim DeMint, the Republican senator and presidential hopeful, speaking one day after health care reform passed the House of Representatives, clearing the final legislative hurdle to enactment. And it’s a sentiment you hear a lot on the right these days. Over the last week or so, as passage seemed ever more likely, Republicans moved from denial to anger: If they couldn’t stop this bill from becoming a law, they would stop the law from taking effect.

A historical precedent for repeal exists. In 1988, President Ronald Reagan and the Democratic Congress passed the Medicare Catastrophic Coverage Act. The bill promised to fill in some key gaps in Medicare coverage, chief among them an overall limit on benefits and a lack of prescription drug coverage. But the bill proved unpopular. Only a tiny fraction of seniors ever experienced catastrophic expenses that surpassed the Medicare limits; the drug benefit, although helpful, didn’t start right away. To pay for the benefit, the act raised taxes on wealthy seniors. Conservatives attacked that future mercilessly, implying (wrongly) that many more seniors would end up paying the tax. The public turned sharply against the act and, within a year, Congress had repealed it by an overwhelming margin.

Democrats complacent about their victory this week should remember that example and remember it well. But they should also take comfort in the fact that the situation is different in several key respects. Although most of health care reform’s benefits won’t begin until many years from now, the architects of the bill understood what happened with Medicare Catastrophic. That is why they front-loaded the bill with a handful of tangible benefits. Seniors will get additional assistance buying drugs, young adults under 26 will get to stay on their parents’ policies, the government will prohibit annual and lifetime limits on benefits and insurers will be prohibited from rescinding policies without good cause--all within the first year.

The politics are different too. Precisely because Medicare Catastrophic was a bipartisan act, passed by a Democratic Congress and signed by a Republican president, neither party really took political ownership of it. Neither Reagan nor congressional Democrats had made it a defining issue of their previous campaigns and after enactment, neither was going to expend huge political resources defending it.

The situation today could not be more different. President Barack Obama and his allies made health care reform a centerpiece of the 2008 campaign. And over the last year, they’ve made it the signature cause of Obama’s first term. Their political survival depended on its passage and, now, their political survival depends on its implementation. In short, they are going to keep fighting for it.

Of course, the prospect of yet more fighting over health care won’t excite most Americans, who at this point just want to move on to other matters. (Heck, even some of those who write about health care for a living are eager for something new.) But there’s nothing wrong with fighting about--or, at least, debating about--health care. It’s an argument about how we, as a nation, want to set priorities. It’s a discussion we’ve been having for decades--over everything from Medicare spending to insurance regulation--and it’s a discussion we were bound to keep having, no matter what happened to reform.

What’s changing this week, with the enactment of the Democrats’ bill, is the boundaries of that discussion. All societies have to make decisions about how to allocate resources. Broadly speaking, there are two ways to make those decisions. A society can make those decisions collectively, through government, by imposing regulations and spending taxpayer dollars. And a society can make those decisions individually, through the market, by simply allowing individuals to spend money according to his own preferences and means.

It’s not a stark, either/or choice. Instead, each nation finds its own middle ground between the two extremes. And, historically, the U.S. middle ground has been closer to the market side. Unlike in the rest of the developed world, government didn’t guarantee access to coverage, although it subsidized it for some people who couldn’t afford it. Government didn’t set overall budgets for health care spending, although it would limit the money its own programs spent for treatment.

For a long time, Americans were comfortable with that approach. But, over time, it caused more and more people to struggle. Millions had no health insurance; millions more had either insurance that was too expensive or insurance that didn’t cover enough.

Health care reform promises to shift the middle ground between government and market, modestly, but in a way that will have far-reaching effects. Now government will guarantee that all (or most) people have the ability to get insurance that will actually meet their needs. It won’t do so by taking over the insurance business--even if, truthfully, that’s what some of us would prefer. Instead, it will do so by setting rules for how the insurance industry behaves. And it won’t make insurance free for all people. But it will provide financial assistance, enough so that people of limited means won’t have the same high exposure to medical costs they do now.

Minutes after the House finished passing health care reform, Obama described the bill as a major, but not a radical, reform. That about sums it up. It will change the way people live far more than it will change the principles by which we govern.