Where Hillary Clinton failed, the team of President Barack Obama and HHS Secretary Tom Daschle is determined to succeed—and the political momentum is all on their side.
The last time Democrats led a major push to have the federal government establish universal health care coverage, Ed Gillespie, then an aide to Dick Armey, defined a simple strategy that Republicans could use to defeat the Clinton administration’s initiative.
“We don’t have to tell the American people what’s wrong with this plan, we just have to show them what the plan is,” Gillespie told his fellow Republicans, Armey recently recalled.
On January 26, 1994, the strategy manifested itself when Senate Minority Leader Bob Dole, in his response to President Clinton’s health care–focused State of the Union address, unveiled a chart containing 207 boxes that graphically illustrated the complexity of the proposal drafted under the stewardship of First Lady Hillary Clinton.
“Let me point out some of the new bureaucracies that the president’s plan will create,” Dole explained. “Way up here is the National Health Board. Over here is the Advisory Commission on Regional Variations of Health Expenditures. And here’s the National Institute for Health Care Workforce Development. Now, you and I are way down here, way at the bottom.… [T]he president’s idea is to put a mountain of bureaucrats between you and your doctor.”
Armey, who was chairman of the Republican Conference in the House at the time, says that while it wasn’t easy to defeat the legislation, Democrats shot themselves in the foot by overreaching, and in the end, “Hillary Clinton lamented that they could never get past that chart.”
But a lot has changed in the intervening 15 years. Americans are as fed up as ever with the state of the nation’s health care system and its skyrocketing costs. Businesses, doctors, and insurers—groups that helped defeat previous attempts at universal health care legislation—have now become active proponents of reform. Democrats have racked up large majorities in both chambers of Congress and have retaken the White House during an economic crisis that has been likened to the Great Depression.
“Democrats are much smarter about how they are going to do it than they were back then,” Armey observed. “I think it represents a very, very formidable task to try to stop it this time around.”
Sen. Jim DeMint (R-SC) also conceded that it would be an uphill battle. “Because of down economic times and the promise of free health care, I think we’re in real danger of losing this,” DeMint said.
The stakes could not be higher for conservatives. Putting the state in charge of the nation’s $2 trillion health care system—which represents one-seventh of the U.S. economy—would be the coup de grâce to small-government conservatism, because much like other federal entitlements, a government-run health care system could never be undone. National security conservatives who want to ignore the issue would soon realize that health-care spending will eat into the defense budget and social conservatives will be dismayed by the power that the federal government will be granted over life-and-death medical decisions.
IN THE DAYS FOLLOWING last November’s election there was a view among some conservatives that it didn’t matter what Barack Obama’s liberal heart desired, because his hands would be tied by the costs associated with the nation’s economic crisis. But all that talk dissipated—or at least should have dissipated—when President-elect Obama tapped Tom Daschle to serve not only as his Secretary of Health and Human Services, but also as a director of the newly created White House Office of Health Reform. In other words, the former Senate majority leader has been tasked not merely with running the mammoth HHS on a day-to-day basis, but also with using his legislative skills to shepherd any health care package through Congress.
“Now, some may ask how at this moment of economic challenge we can afford to invest in reforming our health care system,” Obama said at the news conference in which he announced the Daschle appointment. “And I ask a different question. I ask: how can we afford not to?”
Rather than consider themselves hamstrung by the financial crisis, Obama and Daschle argued that now is the time to act, because cash-strapped businesses are struggling with health care costs and high unemployment is swelling the ranks of the uninsured. It’s similar to the way that Franklin D. Roosevelt exploited economic anxiety to pass the Social Security Act in 1935, even though the first checks didn’t start getting mailed until 1940.
“It’s not something that we can sort of put off because we’re in an emergency,” Obama said of health-care reform. “This is part of the emergency.”
Since losing his Senate seat in 2004, Daschle has developed a passion for the health care issue, and published a book on the topic last year, Critical: What We Can Do About the Health-Care Crisis. A large portion of the book is dedicated to the failure of HillaryCare in 1994. Daschle’s autopsy found that Clinton and her collaborator Ira Magaziner did not involve Congress enough in the drafting process and that her “Interagency Health Care Task Force”—composed of 630 people and broken down into 34 “working groups”—produced a highly technical, 1,342-page proposal that was impossible to explain to lawmakers, let alone the American public.
If his book is any indication, Daschle will be determined to produce a much more streamlined proposal and do a better job of involving key lawmakers on Capitol Hill in the process, as well as insurers, doctors, and business leaders. Since the election, it has also become evident that Daschle hopes to piggyback on the successful strategies Obama used to mobilize voters during the campaign to help build grassroots support for any health care effort. Even before being sworn into office, Obama’s transition website invited Americans to post their own suggestions to improve the health care system and to hold health care house parties that would also serve as brainstorming sessions.
WHILE THE DETAILS OF ANY plan would take months to hash out, Daschle’s writings, along with Obama’s campaign proposal, provide a good idea of the broad outlines. Both Obama and Daschle have touted the benefits of a single-payer health care model, which is a more academic way of describing a socialized system in which government is the sole purchaser of health care.
“I happen to be a proponent of a single-payer universal health care plan,” Obama declared in a 2003 speech to the AFL-CIO. “[W]e may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, we have to take back the House.”
During the presidential campaign, Obama refined the statement to mean that he would set up a single-payer system if he were “designing a system from scratch,” but said he supported working within the existing system because it was more politically feasible right now.
In order to stave off Republican charges that they want to bring European-style socialized medicine to America, Obama and Daschle have preemptively appropriated rhetoric from conservatives. They speak of “choice” and “competition” and emphasize that they don’t want a government-run system, but merely one that is made up of “public-private” partnerships.
However, once you look behind the veneer it becomes obvious that the aim is to craft a plan that maintains the current mixed public-private structure while making it function more like a government-run system. Over time, this can seamlessly evolve into the single-payer model that both Daschle and Obama clearly prefer.
“Supporters say single-payer is brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration,” Daschle writes in his book. “But a pure single-payer system is politically problematic in the United States, at least right now.”
Daschle goes on to ask, “If passage of a single-payer system isn’t realistic, what should we do?”
His answer, which has been echoed by Obama, would be a system in which individuals would be given subsidies to purchase insurance in a government-run exchange, choosing either a government plan modeled after Medicare, or among private plans that would have to meet certain government standards. Large employers would likely be required to either provide health insurance to their employees or pay into a government pool to purchase coverage for the uninsured. Such a plan would also require insurance companies to cover anybody who applies for insurance without taking into account pre-existing conditions, and insurers would have to charge rates that the government deemed affordable.
The new government-run option didn’t get much attention during the election, but it was a key element of Obama’s campaign proposal, and any piece of legislation that does not include it would be a non-starter for progressive activists and liberal members of Congress. Their hope is that they can design a public plan more generous than any of the private options offered by insurers in the exchange (a task made easier when government is setting the rules of the game and doesn’t have to worry about making a profit because it can always raise taxes or issue more debt). Thus, liberals can gradually shift more Americans toward government health care while arguing that it was an aggregation of individual choices.
THE CENTRAL PILLAR OF Daschle’s health care vision is a Federal Health Board. “Like the Federal Reserve, the Federal Health Board would be composed of highly independent experts insulated from politics,” Daschle explains in his book. “Congress and the White House would relinquish some of their health-policy decisions to it. For example, a shift to a more effective drug service would be accomplished without an act of Congress or the White House.”
Daschle has argued that the Federal Health Board will manage health care just as the Federal Reserve “skillfully managed monetary policy for decades…” (That is not a joke.)
Through the Board, government could control health care costs by rationing treatment based on what its experts consider effective or good value. While the Board wouldn’t technically be a regulatory body, Daschle writes that “its recommendations would have teeth because all federal health programs would have to abide by them, and those programs account for 32 percent of all health spending and insure roughly 100 million Americans.”
Furthermore, any private insurer that wants a piece of all the money the federal government will be throwing around in the new insurance exchange would have to abide by their recommendations. And, Daschle writes that “Congress could opt to go further with the Board’s recommendations” by passing legislation that would coerce more insurers into abiding by them.
Conveniently enough, the entity would be composed of a Board of Governors that would be appointed to 10-year terms, subject to Senate confirmation. In other words, any Obama appointments would be allowed to serve until at least 2019.
It’s uncertain whether the Federal Health Board concept will be part of any final Obama proposal, but in a blurb on the back of Daschle’s book, Obama praises the idea. “[Daschle’s] Federal Reserve for Health concept holds great promise for bridging this intellectual chasm and, at long last, giving this nation the health care it deserves,” Obama writes. Furthermore, Daschle’s Board is not just part of his vision for the future of health care—it plays a central role in his strategy for getting any proposal passed in the first place. The idea, as he presents it, is that having “independent experts” make difficult technical decisions down the road—rather than members of Congress during a heated legislative battle—will reassure interest groups while allowing lawmakers to vote on a much simpler health care proposal than the Clinton-Magaziner leviathan.
WHILE CONSERVATIVES HAD MANY allies in the private sector during the last health-care fight, this time around they may find themselves more alone than Gary Cooper in High Noon. Many businesses struggling with high health care costs are happy to have the government step in, while doctors and insurers have their own issues with the current system and have put out reform proposals.
The American Medical Association, for instance, was once a leading opponent of efforts to expand the federal government’s role in the health care system. Ronald Reagan famously recorded an LP on the group’s behalf in 1961 titled “Ronald Reagan Speaks Out Against Socialized Medicine” to protest the creation of Medicare. But the AMA is now promoting its own universal health care plan, and expects to work closely with the Obama administration to help reform the system. (Daschle reached out to the group shortly after the election.)
“The status quo is not good,” said Nancy Nielsen, president of the AMA. “It’s not good for patients and doctors are not happy. Doctors are discouraged, they’re dispirited, sometimes they’re angry, and it just isn’t working well for anybody.”
Specifically, Nielsen explained that doctors are irritated by the difficulty of getting reimbursements and frustrated by the “hoops they have to jump through to get the care they think their patients deserve.”
She said that all the parties involved share the goals of making sure that everybody has health insurance and that medical care is affordable, but the debate will be over how to get there. The AMA does not favor a government-run health care system, she repeatedly said, and the group’s own plan—which would move away from employer-based health care and toward individual tax credits—actually has a lot more in common with the one offered by John McCain during the campaign than it does with Obama’s. At the same time, the nation’s largest physicians’ group sees health care reform as inevitable, and it wants to be part of the process, because doctors will have to work within whatever system gets created.
“The important thing for us is that we are part of the solution,” she said. “If we are on the outside looking in and just complaining without being part of the solution, that’s not a good place for physicians to be.”
The last time around, the insurance industry played a crucial role in derailing Clinton’s health-care proposal, and its efforts are epitomized by the “Harry and Louise” television ads featuring a typical American couple living in a health care dystopia ushered in by the legislation, struggling to make sense of the changes. But America’s Health Insurance Plans, the largest insurance industry trade organization, has recently stated that it would be willing to offer coverage to those with pre-existing conditions as long as there was a mandate requiring all Americans to purchase health insurance, thus ensuring that healthy people get brought into the risk pool.
“Our industry is taking a drastically different approach than it did 15 years ago,” said AHIP spokesman Robert Zirkelbach. “[We] play an integral part of the health care delivery system and we felt we had a responsibility this time around to put forth solutions and contribute to the health care discussion.”
Expressing a sense of urgency that echoed Obama’s, Zirkelbach said, “We cannot afford to not take action. We have got to address the health care concerns that are facing the nation.”
WHILE DASCHLE AND OBAMA may consider health care an emergency, the reality is that any plan to overhaul the nation’s health care system will take some time to put together.
In a December conference call sponsored by the liberal group Institute for America’s Future, Rep. Pete Stark (D-CA), who serves as chairman of the health subcommittee of the House Ways and Means Committee, said that Democrats were unlikely to vote on a comprehensive health care reform proposal until early in 2010. Stark said that there was still a lot of “deferred maintenance” on the current health care system that would have to be completed prior to a total overhaul, including expanding SCHIP, dealing with Medicare compensation for doctors, and promoting health information technology.
Rep. John Shadegg (R-AZ), one of the few well-versed Republicans on Capitol Hill when it comes to health care, expressed optimism about the position of conservatives going into what he acknowledges will be a difficult fight.
“I see this shaping up as a tremendous opportunity for Republicans to make clear their vision of the future versus the Democrats’ vision of the future and to do it on very favorable turf,” Shadegg said. He insisted that Republicans can win the fight by articulating that they are in favor of giving choice to consumers and patients, by, among other things, extending the tax-preferred treatment enjoyed by employers to all Americans so that they can pick the plans that they want.
The government-run aspects of the Democrats’ plans will be exposed once it is opened up to more scrutiny, according to Shadegg. “I don’t think that Americans are going to base their views of the health care proposals in Congress in the next two years on the debate that went on during the last election,” he said.
Specifically, Shadegg said that it would become pretty obvious to most Americans that the health care exchange that is a feature of standard Democratic proposals does not represent genuine choice.
“Americans won’t be able to buy the health care plans that they want, because the government, in the same proposal, is going to say what constitutes insurance and what doesn’t,” he said, adding that the public option would also expose the plan’s objectives. “As soon as we create a government insurance plan that will be subsidized by the government, you won’t need to be a rocket scientist to figure out that all competitors will be on life support and will be gone after a period of time.”
He also predicted that Obama would have to reverse his campaign stance and come out in favor of an individual mandate, which is supported by Daschle and represents the only way to get insurers to cooperate. Aside from being unpopular, Shadegg said, mandates have been proven an “abject failure” in Massachusetts, where hundreds of thousands of people remain noncompliant, and also are ineffective in the 48 states that mandate automobile insurance.
Shadegg also observed that in his book, Daschle is “stunningly candid about denying care” as a way to save money. As an example, he quoted Daschle’s lament that “Many patients with insurance want any care that might do some good, and plenty of doctors will oblige them.”
In addition, Shadegg anticipated that Daschle will not be able to abandon his idea of a Federal Health Board, even as the Federal Reserve’s credibility has suffered from its handling of the financial crisis. He said that it “is absolutely essential for what they want to do with the health care system” and crucial to Daschle’s legislative strategy. But it also complicates things from a communications perspective.
“It will be difficult for Obama and Daschle to argue that we are not going to a government-run health care if they insist on a board that decides practices and procedures,” he said.
While acknowledging that many of the large interest groups won’t be on the side of Republicans this time around, Shadegg urged some skepticism. “If you speak to doctors, you will find that the AMA does not speak for many of them,” he said, and insisted that such groups do not represent the sentiments of the American people.
If large businesses support a government takeover of health care, Shadegg predicted that Americans would see that they are asking for a handout from taxpayers. And if Democrats end up, at the behest of the insurance industry, proposing a mandate that would fine Americans who do not purchase the industry’s product, it would show that “we’re not the ones carrying water for the insurance industry, the Democrats are carrying water for the insurance industry.”
Dick Armey warned that while Democrats recharged after their last defeat on health care and laid the groundwork for another push, Republicans became too complacent and will have a lot of catching up to do.
“The United States, after every military conflict historically, we disarmed,” he said, noting that, once Republicans defeated HillaryCare and took back Congress, they similarly stopped worrying and didn’t make the case for reforming a broken system by freeing up the health care market. “The question is, can Republicans reequip themselves to get back into the fray when [Democrats] are breathing down their necks again?”
Philip Klein is The American Spectator’s Washington correspondent. You can follow him on Twitter at: http://twitter.com/Philipaklein
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