A quarterly magazine of urban affairs, published by the Manhattan Institute, edited by Brian C. Anderson.
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Health Care and Hubris
Scott Brown didnt derail health-care reform. Bad politics and policy choices did.
22 February 2010
President Obama is making a last-ditch effort to salvage health-care reform at a bipartisan meeting Thursday at Blair House in Washington, D.C. Democrats may still try and ram their unpopular bill through Congress using a budget tactic known as reconciliation in the Senate, but make no mistake: its a sign of desperation, not strength. The Democrats 2,000-page, $1 trillion legislation may not be dead yet, but its on life support.
What a difference a year makes. In November 2008, Democrats trounced Republicans. President Obama swept into office with a powerful majority in Congress and a determination to enact sweeping liberal reforms. Democrats long-held dream of universal health care seemed on the verge of fruition. Feeling invincible, the White House quickly strong-armed the hospital, insurance, and pharmaceutical sectors into supporting Democratic health-care reform proposals. The drug industrys trade association even promised $100 million in advertising support. An eventual Rose Garden signing looked all but certain.
With Obamacare now in shambles, the White House and its allies are trying to shift blame to the Republicans as the Party of No. But the Democrats helped derail themselves. The administration made poor political decisions that resulted in a bad legislative process and even worse policy outcomes. Obamacare ultimately collapsed beneath the weight of its own contradictions.
From the start, the president set broad goals for health-care reform but left the drafting of legislation to the congressional committee heads. In the House, this meant that the most liberal members wrote the bill, lurching the whole process leftward. The House liberals produced a massively expensive and convoluted bill and ignited a public debate about a new government insurance planthe public optionthat predictably raised red flags for moderates and conservatives in both parties. The White House, in short, opted for a majority only approach to health-care reform, disdaining broad bipartisan support in favor of (potentially) picking off one or two Senate Republicans.
The legislation that congressional Democrats produced is a dogs breakfast. Democrats can claim that its deficit neutral (a terrible standard, since current deficit projections are unsustainable) only because its loaded with fiscal gimmicks and across-the-board reimbursement cuts to doctors, hospitals, and nursing homes. No one really believes that these will play out as advertised. The legislations projected costs over its first decade are almost willfully misleading. Provisions on taxes and reimbursement cuts (to Medicare and Medicaid) kick in immediately, while outlays on coverage subsidies (including a Medicaid expansion) dont go into effect until 2013. The legislation also includes $200 billion in Medicare physician cuts that will be rescinded once a bill is signed by the president. And union pressure gutted a Cadillac Plan tax that was supposed to slow the rate of health-care inflation, costing another $60 billion.
After the Senate version passed on Christmas Eve, many supporters admitted that it didnt do nearly enough to control costs and was tarred with too many backroom deals to buy off Senate moderates, like the Cornhusker Kickback and the Louisiana Purchase. Scott Browns victory in Massachusetts simply reflected public unhappiness with the Democrats efforts to ram lousy legislation down the countrys throat.
A more sensible approach would have been to pursue reforms that enjoyed bipartisan support, such as tax-code reforms to make insurance more affordable for the uninsured, increased federal funding for high-risk pools offering guaranteed access to people with preexisting conditions, reformed medical-malpractice laws to lower health-care costs, and preventing insurance-industry abuses (like dropping policyholders after theyve become sick). These measures would have focused scarce tax dollars on the most vulnerable uninsured Americans without exploding the deficit.
Can bipartisanship work? It has before. Someone should remind President Obama that 83 House and Senate Republicans voted for Medicare in 1965. One hundred and twenty-three Democrats voted for welfare reform in 1996. Two hundred and forty-four Democrats voted for President Bushs No Child Left Behind legislation in 2001.
Still, the outlook for bipartisanship is currently grim. Today, just days before the bipartisan summit, the president has issued his own plan for health reformbasically the Senate version of the legislation, with more regulations and subsidies tacked on to make it more acceptable to House Democrats. (The Washington Post reports that the presidents changes could add $200 billion to the cost estimate for the original Senate bill.) This is clearly a prelude to a reconciliation push in the Senate, even though the underlying legislation remains deeply unpopular.
The summit will probably turn out to be to be an exercise in administration spin. But moderates and conservatives in both parties must call the presidents bluff and present their own agenda for reform. Wiping the slate clean and starting over is highly unlikely at this point. Then again, Obamacare seemed all but certain just a few months ago.
Paul Howard is director of the Manhattan Institutes Center for Medical Progress.