HEALTH CARE DEBATE
Health-care reform was one of the first and most divisive major-policy initiatives of the Clinton administration. Health care first became a public policy issue for Americans after World War II, when President Harry S Truman advocated national health insurance. The American Medical Association (AMA), however, vigorously opposed it, and it was not until 1965 that Medicare and Medicaid were finally established, covering retired persons and those on welfare, respectively. The remainder of the population was still responsible for paying for its own health care either through employers or out-of-pocket. The working poor were most at risk under these conditions because they did not qualify for Medicaid and generally did not work for employers that offered medical insurance. From the 1960s to the 1980s, health-care costs continued to rise because of inflationary trends and technological advances. By the 1990s even employers who furnished health-care plans found it difficult to continue to provide the level of protection to which workers had become accustomed without raising copayments and/or lowering benefits. Health maintenance organizations (HMOs) entered into this environment with the promise of lowering insurance costs by focusing on preventive care rather than corrective medicine. Though the premise was sound—save money by preventing expensive health problems—it assumed long-term cost savings that did not necessarily materialize in the short run. Other forms of cost savings had to be found. HMOs pursued efficiency by requiring that nonroutine procedures be authorized by insurance companies before being completed. Family doctors were replaced by medical groups, which lowered over-head but tended to make care impersonal. Despite the reduction in personal attention, costs continued to rise, as did insurance premiums.
Clinton's Task Force
President Clinton perceived that the political environment was ripe for a bold new plan of universal health care for all Americans. He chose the First Lady, Hillary
[This text has been suppressed due to author restrictions]
Rodham Clinton, to take the lead in overhauling the $915 billion health-care system and extending care to thirty-seven million uninsured Americans. Clinton trusted her abilities and she was anxious to make a new role for the First Lady as policy maker. While she had a sharp, analytical mind, it was the mind of a lawyer, not a politician—she made some early and critical mistakes. A blue-ribbon task torce was organized to come up with a health plan, but she chose not to include any representatives from the AMA or the hospital administration field among its 511 members. She also chose to hold meetings in secret. These two decisions left the committee and her open to charges of attempting to undermine the democratic process and covertly promote a socialist agenda. The committee also had problems meeting its deadlines. President Clinton initially imposed a one-hundred-day deadline for the report; however, it was changed when the First Lady's father died. The report finally came out in September 1993 and was introduced into Congress in late October, but it was dead on arrival. The insurance industry and Republican Party had organized a media blitz against the plan, calling it "socialized medicine" and claiming that it would do away with a patient's freedom to choose his or her own doctor.
Health Security Act
The plan was not as bad as its critics charged. It had six major goals: security, comprehensive benefits, cost savings, quality care, individual choice, and paperwork reduction. Security would have been obtained by providing for "portability" of plans. Whenever a person lost or changed jobs, they would be allowed to take their plan to the next job. Comprehensive benefits focused on preventive health and included screenings, physicals, and immunizations, as well as doctor visits, hospital care, emergency services, Laboratory and diagnostic services, prescription drugs, mental-health care, hospice and home-health care, vision and hearing care, and children's dental care. It was projected that the plan would have been funded through employer and employee contributions, Medicare and Medicaid savings, federal taxes, savings through paper-work reduction, and fraud prevention. The plan was ambitious in its coverage and much too optimistic in its cost savings, particularly those it projected through Medicare and Medicaid. Ultimately, the possible bene-fits of the plan did not matter. After being introduced into Congress, it was assigned concurrently to several committees that held hearings over the next year. Parts of the plan eventually found their way into law, albeit in a different form, but most simply died in committee. Even President Clinton gave up supporting it, realizing it was a lost cause.
The failure of health-care reform was a classic example of what happens to public policies that have diffuse benefits and concentrated costs. The benefits of health-care reform would have been spread marginally over the whole population and would only be felt if someone were seriously ill. Since the probability of serious illness for any individual is unknown, the average person was not motivated to become politically active in the debate. Groups bearing the costs, for example, the doctors, hospitals, and insurance companies, had well-organized, well-heeled, experienced lobbyists who played on the fears of the weak and old. Even the American Association of Retired Persons (AARP), which had initially supported Clinton's program, switched sides when its members began to fear that they would lose the option to choose their own doctors and other health-care providers. Without a strong support system among the public, lawmakers were unwilling to risk their political careers on the controversial proposal. Though a failure as legislation, the debate over health care continued throughout the decade.
"The Health Security Act of 1993," White House Electronic Publications, 20 September 1993, Internet website.
Frank Maranote, "In Sickness or in Health: Hillary Takes Charge," Hillary Clinton Quarterly, Internet website.
Bernard D. Reams Jr., ed., Health Care Reform, 1993-1994: The American Experience: Clinton and Congress—Law, Policy, and Economics: A Legislative History of the Health Security Act (Buffalo, N.Y.: Hein, 1996).