The Affordable Care Act, a legislative victory of the first order for Barack Obama and Nancy Pelosi, represents both the major fruit of the 2008 Presidential and Congressional elections and a root cause of the rise of Tea Party-led Republicans to ascendancy in the House. In both substance and form it is a primary legacy of Barack Obama.
On the substance
As the ACA was passed in March 2010, House Speaker Pelosi famously declared “But we have to pass the [health care] bill so that you can find out what’s in it....”. Actually, there were two parts of the bill, the 906 page Patient Protection and Affordable Care Act, and the 55 page Healthcare and Education Reconciliation Act. Satisfying all of the politicians and lobbyists for an industry that represents one sixth of the US economy took a lot of pages.
The basic framework is simple:
- Everybody has to be insured. If you cannot afford it, you will be subsidized by the federal government or through an expansion of Medicaid. If you choose not to pay for insurance, you will pay a penalty.
- The system will remain in the private sector - doctors, hospitals, equipment makers, pharmaceutical companies, insurance companies. Joe Lieberman won out with his rejection of a "public option" in which the government would replace insurance companies.
- State or federal "exchanges" were established to facilitate the purchase of insurance by those who were not covered by Medicare, Medicaid, or their employer.
- All health insurance plans have a standard set of requirements, with a basic philosophy that the public should not be allowed to purchase coverage which minimally meets their needs, and no exceptions are to be made for religious or ethical principles.
Implementation provided a great lesson in the limitations of Big Government. For months the computer system had massive outages and interminable wait periods for potential enrollees. As rollout floundered, arbitrary exemptions were given (often without legal justification): forgiveness for missing sign-up deadlines; delay in closing of high risk pools; fines for non-complying small business; delays for states setting up exchanges.
The advocates believe that the Affordable Care Act is succeeding. Since the implementation of Obamacare, some 20 million people have gained coverage through an exchange, through Medicaid, or through their parents plans. Nevertheless, some 30 million remain uninsured. The national cost of healthcare - the basic costs; not the insurance premiums - continues to increase at about 6.5% per year, three times the broader inflation rate.
The larger picture is that the business model is unsustainable. Major insurers, under the political gun in 2010 to offer plans through the exchanges or incur the administration's wrath, quoted rates based on promises that healthy (low cost) workers would sign-up, that the pricing of service providers would moderate, and they would be temporarily subsidized if costs got outside of "channels". Wrong. Three years into full implementation the major insurers - United Healthcare, Aetna, Blue Cross, - are losing hundreds of millions of dollars. As they approach the sign-up period for 2017, most will be retrenching and increasing rates. In many states those shopping will find a monopoly.
On the form
Nancy Pelosi and Harry Reid out-maneuvered John Boehner and Mitch McConnell in threading the needle to get the legislation passed. To avoid the requirement that revenue-related legislation originate in the House, Reid took an existing House-passed bill related to military housing, built the Senate's healthcare bill on it, and discarded the original content. The Senate bill passed the filibuster hurdle 60 to 39, with the expectation that the House would draft a bill which would go to conference committee. Then Teddy Kennedy died and Scott Brown was elected, denying the Democrats the 60 votes needed since the conference committee outcome could be filibustered. Pelosi then passed the Senate bill "as is" 219-212, with the promise to nervous members of her caucus that there would be a second clean-up bill. By Congressional rules, Pelosi's follow-up "reconciliation" bill could be passed by the Senate with a simple majority if it dealt only with budgetary (and not policy) matters. And so it did, kind of.
The public sausage-making of Obamacare was a significant factor in the Republican takeover of the House in 2010 - the Louisiana Purchase; the Cornhusker kickback; the cynical promise that abortion would not be covered; AARP's self-serving advocacy; the questionable abuse of the Senate and House rules. The subsequent refusal of the House to use funding authority to stop implementation led to the radicalization of conservatives.
More damaging to the public view of government are the convoluted decisions of the Roberts Supreme Court:
- For the first time it is acceptable to force citizens to buy something that they do not want from a private company - because it is a tax, although the administration had argued that the mandate was not a tax when trying to get the bill passed;
- While the law authorizes subsidies for "exchanges operated by the states", it is OK for the administration to also pay for exchanges set up by the federal government when many states opted out.
Trump has been too busy attacking immigration and foreign trade to focus on healthcare, and the Democrats do not want to jeopardize their president's signature legislative accomplishment, but alarms have been sounded. As the private insurers bail out Obama himself has called for a "public option", and Hillary has called for a whole new entitlement in the form of mental health coverage. Some signal achievement; some legacy.
This week's video is a discussion of Bill and Hillary's lead roles in the multi-billion aid effort following Haiti's devastating 2010 earthquake.
bill bowen - 9/2/16