Getting It Done: How Obama and Congress Finally Broke the Stalemate to Make Way for Health Care Reform

Part One

THE STAKES

1 THE GREAT DIVIDE

Of all the stories from the summer of 2009, when town hall meetings across the country erupted in fiery protests against health care reform, there was one story that quickly made the rounds among Democrats on Capitol Hill. It was the perfect illustration of just how deeply some people’s distrust of government had affected their views of the health care debate.

It took place on Monday, August 3, right at the beginning of the month-long August recess that Congress traditionally takes. Gene Green, a moderate House Democrat, was facing a rowdy crowd of constituents in his hometown of Houston, Texas. Already, they were unhappy with his recent vote for the House climate-change bill. Now, they let him know they were equally unhappy with what they’d heard about the health care reform bill.

One man in the audience shouted out to the rest of the crowd, How many people, by a show of hands, oppose any form of socialized or government-run health care?

Almost everyone in the room raised their hands. There was lots of cheering, whooping, and hollering. Someone yelled out, Yes, sir!

So Green turned the question on its head. How many of you have Medicare? he asked. Medicare, of course, is the government-run health care program that pays for medical care for 45 million people, including 37 million seniors and 7 million people with disabilities. It is the program that provides the crucial safety net for our nation’s elderly, regardless of whether they are rich or poor, sick or healthy. About half of the people in their crowd raised their hands.¹

The discussion quickly moved on, so it’s not clear how many of those people understood the irony. Green didn’t ask the natural follow-up: Are you aware that Medicare is a government-run program? Instead, he let a man in the audience raise his concerns about how Medicare is working in practice—with doctors refusing to accept Medicare patients because the federal government is cutting their payments. That’s a valid concern, and it deserved to be dealt with on its own. But it’s one thing to address problems in the Medicare system. It’s another to oppose, on its face, any kind of health care safety net that involves the government in any way.

Should we get rid of Medicare and let senior citizens fend for themselves? Should we eliminate the Medicaid program for the poor and people with disabilities? What about the State Children’s Health Insurance Program, which helps low-income families get health coverage for their kids? Some people might, in fact, be happy to end all of those programs on principle. But it wouldn’t be a widely held view.

And yet, that moment in Gene Green’s town hall meeting went a long way toward explaining the forces that have kept health care reform out of reach for nearly a century. Why has it been so difficult for the United States to do what the rest of the world’s industrialized nations have already done—build a complete health care safety net that protects everyone in his or her greatest time of need? Some nations have done it through a government system, others have done it through the private sector, but our nation has always stood out for its inability to help the millions of Americans who fall through the cracks.

There are plenty of reasons for that, and to some extent they reinforce each other. The issues in the health care debate are complex and often poorly explained; people want to preserve what they have, even if what they have is less secure than they might think; and the nation has become so politically polarized that different groups of Americans see the same reality in different ways. But it’s hard to miss the one factor that truly drives the intensity of the opposition. Health care has become a symbol of the deep divide in Americans’ feelings about the role government should play in solving our social problems.

Even for the majority of us who are fortunate enough to have health coverage, what we have is so fragile that one bad turn of events can end in disaster. Six out of ten personal bankruptcies in the United States are directly related to people’s medical bills—and of that group, three out of four piled up unaffordable debts even though they had health insurance.² Medical crises have caused as many as half of all home foreclosures.³ And more than a third of all Americans who tried to buy health insurance on their own couldn’t get the coverage they needed because they had preexisting conditions.⁴ But for many Americans, the distrust of government runs so deep that they’ll resist anything that might expand the government’s role in solving the problems.

There is a bit of a disconnect here, because many Americans seem to believe that our medical care is run completely by the private sector. That just isn’t the case. What we actually have is a public-private hybrid. As of 2007, public programs such as Medicare, Medicaid, and the State Children’s Health Insurance Program accounted for about 46 percent of all national health care spending. That leaves a little more than half to private spending, mostly insurance coverage and some out-of-pocket costs.⁵ What we are really arguing about, then, is what the proper mix should be. Should it be closer to half and half? Mostly private spending? Mostly public spending? Other countries have had this same argument, as we will see later, and it is usually an ongoing debate, never completely resolved. We can continue to debate the question, too. But it should not stop us from fixing what we have so it does not continue to let millions of Americans fall through the cracks.

Many of my former Republican colleagues, I’m sorry to say, have fed Americans’ distrust of government with speeches and public comments that greatly exaggerated the role Washington would play in a reformed health care sector. House Minority Leader John Boehner of Ohio regularly warned that the bills in Congress would lead to a big, government-run health care system.⁶ Senator Jim DeMint of South Carolina—the same senator who predicted that health care would be Obama’s Waterloo and that a defeat would break him—predicted that health care reform would eventually crowd out quality private insurance and force Americans into a government-run health care system.⁷ Even Senator Orrin Hatch of Utah, who worked closely with lawmakers from both parties to create the State Children’s Health Insurance Program in the 1990s, argued that Democrats were really trying to create a single-payer health care system like Canada’s. If they can’t do it automatically, they’ll do it in increments, Hatch said, and that means we’re going to have a one-size-fits-all government-run health care program right out of Washington.⁸

I never have understood why so many Republicans make this argument. It is basically an admission that Americans might like a public option if they got to try it—because if they didn’t, how could it ever lead to a single-payer system? The larger point, however, is that the critics of the public option misread how Americans truly feel about government-run health care. When they actually experience it, they are fine with it. Medicare is so popular with seniors that they resist anything they think will threaten it. The economically disadvantaged may not love Medicaid, but they understand its vital role in their lives. The Department of Veterans Affairs health care system is more popular with veterans than private insurance is with other Americans.⁹ And TRICARE, the health care program for the armed forces, keeps topping the customer satisfaction lists in surveys that include all of the major private insurers.¹⁰

Still, the fear of government-run health care has been easily exploited by opponents of reform for decades. There’s nothing new about the charges of socialized medicine. It’s the label the powerful American Medical Association (AMA) used to use as a weapon against the earliest national health care efforts. In 1934, the committee that drafted Franklin D. Roosevelt’s original Social Security bill threw in one line about the need to study national health insurance and make recommendations to Congress. Lawmakers received so many angry telegrams in protest that the House Ways and Means Committee removed the line from the bill.¹¹ That year, the AMA blasted a more specialized group, the American College of Surgeons, for endorsing national health insurance, condemning this apparent attempt to dominate and control the nature of medical practice.¹² When Harry Truman asked Congress to pass national health insurance in 1949, the AMA’s charges of socialized medicine helped unseat some of the plan’s strongest supporters in the Senate.¹³

It was only after the Lyndon B. Johnson’s landslide election in 1964, which gave him strong Democratic majorities in Congress, that the political environment was right to create Medicare and Medicaid—a more incremental strategy that provided special protections for the elderly and the poor. But every attempt since then to expand those protections to all Americans has bogged down, largely because of the fear that a bigger government role in health care would take away the freedom most people have to obtain the health care they think they need. When our efforts to pass Bill Clinton’s health care plan failed in 1994, it was partly because it was too complicated for most people to understand. But it also failed because that complexity allowed its opponents to portray the plan as a threat to their ability to choose their health plans and their doctors.

This time, many of the old foes of health care reform had turned to supporters, thanks to the growing recognition that skyrocketing costs and serious gaps in people’s coverage had made it impossible to defend what was happening. Even the AMA became an ally of the reformers, at least in principle. In June 2009, J. James Rohack, the association’s president at the time, declared our dedication to provide affordable, quality health insurance coverage not just for some, but for everyone.¹⁴

But the old skepticism of government had not completely disappeared. Instead, the distance between the ideological camps seemed greater than ever.

As Barack Obama began his presidency, Democrats became more hopeful about the role of government, and Republicans became more deeply pessimistic—a direct reflection of voters’ happiness with who was in the White House. In May 2009, four months after Obama took office, the Pew Research Center for the People and the Press found that 74 percent of Republicans agreed with the statement, When something is run by the government, it is usually inefficient and wasteful—a view shared by only 42 percent of Democrats. Two years earlier, there had been almost no gap between Republicans and Democrats, largely because Republicans were happier and Democrats were unhappier during George W. Bush’s presidency.¹⁵

How deep is the public’s distrust of the government’s ability to solve problems? Andrew Kohut, the president of the Pew center, concluded that Medicare would face just as much opposition as the current health care reform effort if it were proposed today.¹⁶ In January 1965, as the momentum to create Medicare reached its peak, Gallup found that more than six out of ten Americans supported the idea. But in the May 2009 survey, as Congress prepared to start its work on the health care reform bills, the Pew center found outright confusion and hostility toward government. The vast majority of Americans, 86 percent, said the government needs to do more to make health care affordable and accessible. Yet 46 percent were also concerned that the government is becoming too involved in health care—meaning a substantial number of Americans held conflicting views about what Obama and Congress were about to take on.¹⁷

It was also clear, though, that the distrust was lopsided, and that Democrats and Republicans had almost nothing in common in their views of the health care debate. Sixty-eight percent of Republicans thought the government was becoming too involved in health care—a view shared by only 29 percent of Democrats and 44 percent of independents. Still, it was sobering that the numbers were that high among independents, and that so many Democrats were so skeptical. Democrats have a lot of disagreements, and we have learned over the years that government can’t solve all of our problems. But if there is any single core value we have always shared, it is the view that government is still the best forum we have to help each other in times of crisis. And when millions of Americans struggle to meet their basic health care needs, they are dealing with one of the most urgent crises anyone can face.

The great divide in our society, which keeps us bickering endlessly about the role of government in our health care, largely exists for people who have no direct experience with its shortcomings. For those who have been affected personally by those shortcomings, the divide disappears. Even Republicans who are deeply skeptical of government’s ability to solve problems sometimes change their minds about health care when they have a direct experience with the failings of the private side.

Barry Keene, a Republican mechanical engineer and private consultant in Lafayette, Colorado, believes government handles a lot of things badly—but he no longer thinks health care is one of them. When his wife fell off a step stool in 2005 and broke her leg, the couple ended up more than $50,000 in debt, thanks to a health insurance policy that did not protect them from balance billing—where the providers charge more than the insurance company has agreed to pay, collect whatever they can from insurance, and then send the patient a bill for the rest. What truly astounded Keene, however, was what happened when his wife called the hospital about its $42,000 share of their bill. Within five minutes, she had negotiated a 50 percent discount—over the phone. That captured my attention, Keene recalls. To be able to negotiate a fifty percent reduction in five minutes, that just doesn’t happen in my world. What is the real cost? And who pays the list price? And what do the insurance companies really pay? Keene is now a vocal supporter of single-payer health care and an advocate of greater transparency in our medical care.¹⁸

For decades, it has been easy to convince Americans that health care reform will lead us down the path toward greater government control over our lives and interference in our most personal medical decisions. That was the troubled political environment that greeted the Obama administration as it set out to break the health care deadlock. But if Obama and Congress could overcome those odds, they would transform the landscape of our national debates over health care. The great divide would no longer prevent us from solving our most urgent national problems. And Obama’s place in history would be set.

2 LET ME TELL YOU WHAT YOU WANT TO HEAR

There is a pattern with polls on health care reform. Early on, when it’s just the idea of reform, most Americans say they’re for it. They are even willing to sacrifice a bit for it. But unless they have had personal experience with the problems of our current health care sector, all of the issues at stake are abstract to them. Most Americans are happy with their health care, even if they are sympathetic to other people’s problems. So when reform opponents try to tell them that reform might ruin what they like about their health care, the scare tactics often succeed.

This is a dynamic that can make it easy for Democrats to assume that the public is more enthusiastic about health care reform than it actually is. We want to believe that people support it, since health care for all Americans has been such an important cause for our party for so many years. But reform has always been a more urgent issue to Democrats than to Republicans and independents. Moreover, most people aren’t experts on the health care sector and the trade-offs that take place when you change any particular piece of it. When they find out what the trade-offs are, their opinions can change dramatically. It happened when Bill Clinton tried to reform health care in the 1990s, and it happened again when Obama rose to the challenge.

Just after Clinton spoke to a joint session of Congress in September 1993 to issue his call for health coverage for all Americans, the public approved of the plan by a 32-point margin. Three weeks later, that margin had closed to 12 percentage points.¹ By the end of March 1994, most Americans opposed the plan.² Some of that early drop in support was actually because the detailed plan wasn’t ready yet—a fact that created its own set of doubts—and because Clinton got distracted by a foreign-policy crisis, the failed U.S. Army Rangers raid on warlords in Somalia. Still, by March 1994, when Clinton’s 1,342-page plan had been well circulated on Capitol Hill and throughout Washington, opponents had had plenty of time to convince the public that the plan would take away their freedom to receive the health care they wanted. More and more Americans said the plan would hurt them rather than help them, and senior citizens turned against it in large numbers.³

By the time Obama took office, enough time had passed that Americans seemed, once again, to be ready for health care reform. But even at the height of public support for his efforts, some of the same warning signs about the shakiness of that support were apparent if you studied the polls closely enough. The Obama team was more successful than the Clinton team at reversing the drop in support once it happened. But once again, the critical question—What’s in it for me?—became the source of fears that the president and Congress had to address throughout the entire process.

In March 2009, before Congress began working in detail on the health care bills, the Pew Research Center for the People and the Press found that there was actually less support for completely rebuilding the health care sector than there was in 1993—even among Democrats. Still, six out of ten Americans said the government should guarantee health insurance for everyone, even if that meant they would have to pay higher taxes.⁴ Most polls around that time got similar results, though some found the public more conflicted than others. Barely half of all Americans in an NBC News–Wall Street Journal poll said they would pay higher taxes if it meant everyone could have health insurance.⁵

Still, the majority of Americans were saying—for the benefit of the pollsters, at least—that they were willing to make some sacrifices to provide health coverage for all. And yet, as Congress focused more intensely on the health care bills and the debate began to dominate the news, you could see the enthusiasm slipping away. Democrats remained pretty steady in their support for the effort. But between February and August, the share of Republicans who believed they and their families would be worse off under health care reform rose from two out of ten to an astonishing six out of ten, according to a tracking poll by the Henry J. Kaiser Family Foundation. And by August, more than a third of independents felt the same way—a loss of support that the Democratic majority could not afford.⁶

This was a problem that would only grow worse as the debate dragged on. Just as the Clinton health care effort lost momentum right after his speech to Congress, Obama’s effort suffered greatly when Congress went on recess in August and gave up the stage to the opponents and their most outlandish charges. The slide stopped temporarily in September, when Obama made his critical speech to a joint session of Congress about what health care reform was really about—shooting down most of the scary, and untrue, charges that had bombarded the media during the August recess. But even then, an ABC News–Washington Post poll found that 54 percent of Americans agreed with the statement: The more I hear about the health care plan, the less I like it.⁷ And after Obama’s speech, the slide began again. By January, the Kaiser Family Foundation tracking poll found that, for the first time, the percentage of Americans who expected to be worse off under health care reform was about the same as the share that expected to be better off.⁸

Some of the same factors were behind the drop in support that we saw during the Clinton effort. Once again, many Americans worried that they, personally, would not benefit from the changes being made to help other groups. And once again, senior citizens opposed the plan more strongly than any other group. A Gallup poll in September found they leaned against the plan by a 10-point margin.⁹ That had to be a major concern for the administration and Congress. Seniors were generally happy with the health care they already had—through Medicare—and worried about what would happen if Congress started messing with a good thing. And who could blame them? When you deal with health care as frequently as our nation’s senior citizens do, of course you’re going to want it to work right.

The other factor, though, is that pollsters get very different answers depending on how specific their questions are and how they’re phrased. That shouldn’t be a surprise, but it’s particularly true on health care reform, where people don’t necessarily recognize all of the ways they might be affected—and can easily be led to believe their sacrifices will be more severe than they actually will be. In September 2009, a USA Today–Gallup poll asked several pointed questions based on the charges critics were making against the reform plan. Not surprisingly, seven out of ten said they would oppose the plan if it would raise taxes on the middle class. Eight out of ten said they’d turn against the effort if middle-class Americans would have to pay more for health care, if they’d face more restrictions on what doctors they could see and what treatments they could receive, and if the quality of their health care would get worse.¹⁰ The use of the term middle class made a big difference, suggesting that average Americans could expect to be hurt by health care reform in numerous ways.

There was a real danger of a public backlash on some issues, and this was something the White House and congressional leaders had to worry about—particularly on the proposals to tax the benefits on generous health care plans to help pay for reform. At the same time, though, some of the public’s fears were absolutely groundless, especially the concern that Americans would end up with fewer choices of doctors and rationed medical care. The point of bringing down health care costs was to get rid of the wasteful treatments and procedures that don’t work, not to deny people the best doctors and the care they truly need. The problem, though, is that perception is everything in politics, which is why the opponents of reform encouraged those fears as much as possible. Their tactics were especially effective among seniors, who were naturally worried about the vague reports that some of the cost savings were going to come from Medicare—assuming that these would be cuts in services to them, rather than in payments to providers and private-plan contractors.

Everybody understands health care at a personal level, from whatever experiences we or our family members have had with it. But not everyone understands the consequences of different reform ideas—or the consequences of leaving things alone. So people’s opinions of health care reform can shift wildly when they hear more about the implications. One Kaiser poll found that nearly seven out of ten Americans supported the idea of requiring everyone to have health insurance—until they heard that such a rule could force people to buy coverage they couldn’t afford. When they heard that, six out of ten people who supported the idea turned against it.¹¹ And as for those who opposed the idea from the beginning, when they heard that insurance companies would still be able to deny coverage to sick people unless everyone was required to have coverage, three quarters of them changed their minds and endorsed the idea.

From the beginning, the Obama administration had to convince Americans that they all had a stake in health care reform—that it wasn’t just about helping unfortunate people they might not know, but about fixing major problems that affect everybody. Those challenges fall into three broad categories: the cost problems that are making it harder for people to get and keep the coverage they need; the quality problems that give unnecessary care to some and expose others to dangerous mistakes; and the access problems that affect not just the uninsured, but a rapidly growing group of Americans who find out they don’t have the coverage they thought they had. Each of these problems prevents American health care from truly being the best in the world, despite what we’ve all been led to believe. And the solutions to each of these problems involve their own political risks.

And yet, somehow, these problems must be solved.

3 THE COST PROBLEM

One of the most important decisions Obama made, right from the beginning, was to focus his health care reform plan on controlling health care costs as much as helping the uninsured. It was a good strategic decision, because it acknowledged that the fate of health care reform would depend on how it was viewed by people who have health insurance. He had made a campaign promise to lower a typical family’s health care costs by up to $2,500 a year—a promise he took seriously enough that he asked the transition team for hard numbers on how he could keep