This is not History with a capital H

The health reforms in the US are neither historic nor disastrous. They simply show what ‘Change’ means under Obama: tinkering on the edges.

Sean Collins
US correspondent

Topics USA

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In a victory for President Obama and the Democrats, the House of Representatives last night passed legislation to reform America’s healthcare system. The bill, which had already been approved by the Senate, will now go to Obama for his signature. Following that, the Democrats in the Senate will seek to pass amendments agreed with House Democrats. This process could be delayed by Republicans, but there is a strong likelihood that an amended law will be finalised later this week. The long, drawn-out process which began over a year ago looks like it has come to its end, with Obama himself emerging as a big winner.

The Democrats revelled in what they claimed was an historic achievement. ‘We proved that we are still a people capable of doing big things’, Obama said. Democrats made reference to the fact that many presidents over the past century had sought to reform healthcare. Many also said the legislation was comparable to other landmark reforms, such as Social Security, the Civil Rights Act and Medicare.

Republicans, who were unanimous in opposition, agreed that the new law was historic, but they cast it as a disaster. Republican representative Virginia Foxx called it ‘one of the most offensive pieces of social engineering legislation in the history of the United States’. The pro-Republican Wall Street Journal wrote that ‘Obamacare’ is ‘a profound and historic mistake, comparable in our view to the Smoot-Hawley tariff and FDR’s National Industrial Recovery Act’. Republicans have referred to the bill as a ‘government takeover’ and ‘socialism’, thus endorsing the Democrats’ view that this indeed was a fundamental overhaul.

But both the Democrats and Republicans overstate the reform plan’s importance. The new law is not a major change, nor an historic achievement. It does not represent an enormous step forward, but neither is it a calamity. The reality that neither party will admit is that the reforms represent a modest change that does not address the structural problems of the healthcare system in the US.

Key reforms in the bill include: reducing the number of uninsured by 32million by 2019; requiring people to buy insurance, while providing assistance to the lower paid; creating ‘exchanges’ where people can buy insurance from an array of private providers; requiring insurance companies to accept applicants with pre-existing conditions and not allowing them to drop people who develop conditions; and introducing certain cost-cutting measures. The Congressional Budget Office (CBO) estimates that the reforms will cost the federal government an additional $938 billion over 10 years. However, these costs are to be covered by tax increases and cuts in the growth in Medicare (government-provided healthcare to older people), and the CBO estimates that the health-spending deficit will actually decline by $143 billion in the next 10 years.

Of course, the new law is significant, and it does contain enhancements. Changes such as having more people covered by insurance, and regulating insurance companies’ ability to deny coverage, are genuine improvements and will make a difference to many people’s lives. But in the context of the scale of the problems with healthcare in America, the reforms are conservative and minor. As Obama himself has said, this reform package is very similar to the one championed by the Republicans in 1993 in opposition to the Clinton proposals, which themselves were not all that radical.

Once implemented (and many of the reforms will not be phased in for years to come), the reforms in the new plan will still leave the US with a system that is, in many respects, inferior to those operated in other countries. For a start, the law will not, as proponents claim, introduce universal coverage: 23million will remain without insurance. Furthermore, it will not address the inefficiencies that have meant that US healthcare is very high-cost for worse or no-better care than in other countries. Private health insurance premiums have risen about 4.5 times more than inflation over the past decade, and the new plan will not necessarily control these costs. The package will also not change the inherently flawed system of reimbursements that pays doctors for quantities of tests and other services, which is a key source of inefficiency, and thus the costs of care are likely to keep rising.

The final vote was a nail-biter, as they say, with the House Democrats prevailing by only three votes more than the minimum. But the healthcare process was a drama entirely of the Democrats’ own making. It should not have been close. When legislative procedures commenced last year, the Democrats had an unassailable majority in Congress, so passing a bill was in their court to decide. But they were split in various factions and did not have enough vision or discipline to unite. As the process dragged on, no solid plan emerged, and opposition grew as neither the president nor Democrats in Congress could motivate and campaign for reforms.

When the Democrats lost their super-majority – when Scott Brown won the January special Senate election in Massachusetts – the process descended into farce. They were left with having to resort to the obscure ‘reconciliation’ manoeuvre, in which the House would approve the previously passed Senate bill and then amend its features. Such moves only seemed to confirm the suspicions of those who argue that Congress works via nefarious backdoor deals.

At the outset, pressing a reform deal through Congress had much going in its favour. Constituencies that had historically opposed reform – including the doctors, the AARP (the organisation for older people), and the pharmaceutical industry – were now onside. Insurers were opposed but were far less antagonistic than in the past. With such favourable winds, and the Democratic majority, it is amazing that it came so close to failing. In fact, it took a last-minute deal with anti-abortion Democrats – as Obama threw his abortion rights supporters under the bus – to get the party over the hump.

While the reforms do not address the central problems with the health system, they are not a ‘disaster’ as Republicans contend. Since the process started last year, Republicans have not been able to mount an intellectually coherent opposition. Most of the time, they did not even bother with arguments, preferring to ride on the coat tails of the Tea Party types who denounced it as ‘socialism’.

More and more Republicans relied on the simple fact that opinion polls found more opposed to, than in favour of, the plan (just before the vote, found 49.9 per cent opposed and 43.1 per cent in favour, with the remainder undecided) (2). But as even some Republicans pointed out, this meant the party was hitching its wagon to the idea that representatives should simply be poll-driven. This could come back to haunt them in the future when opposing Democrat-proposed measures that appear to have public backing. Another lame Republican argument was to point out to Democrats in marginal seats that they could lose their jobs if they voted for reform. This career-counselling only had the effect of making the Democrats look principled for taking a stand and risking their positions.

The potentially strongest argument the Republicans had at their disposal was about cost. Representative Paul Ryan in particular made something of a name for himself with his critique of the Democrats’ plans. Yet Ryan’s case never convincingly overcame the official CBO conclusion that the package reduced the deficit. And while trying to draw attention to the government-related costs (to support the idea that the reforms were a ‘government takeover’), the Republicans avoided addressing the economic costs in the system, such as insurance premiums and the cost of care.

Republicans – who were united in opposition against the bill in both the House and the Senate – say they will now use it as a campaign issue in the midterm Congressional elections in November, with ultimate aim of repealing the legislation. They believe that this approach will propel them to big gains in seats. However, such an outcome is far from certain – and even if the Republicans do make significant gains, they will not necessarily be the result of the health law.

Republicans seem to hang a lot of their hopes on opinion polls that indicate a negative view of the reforms, plus the public support shown by noisy Tea Party protesters. But this is a simplistic read of the situation. Hostility to the health plan has always had less to do with healthcare per se, as opponents do not dwell much on the details, preferring to rail against ‘socialism’. Even the rhetoric about ‘death panels,’ first raised by Sarah Palin, was dropped as a talking point. Instead, the resistance has really been informed by a general opposition to government in general: a vague distrust of the powers-that-be and an anxiety about broader social change.

Given that the Obama administration will move on to other issues, like employment, it is easy to imagine protesters will move along as well, and find other issues du jour to vent against. And given that the health reforms will essentially mean only slight modification to the status quo, most people will not experience much change. This could lead many to ask: what was all the fuss about?

As noted, the problem is that the new law still leaves the US with a second-rate health system. But what compounds this problem is the fact that, having been through this political bun-fight, no group is likely to take up real reform in the immediate future. The Democrats will not because this ‘historic’ change is supposed to be the be-all and end-all. The Republicans will seek to repeal, but have no desire to provide an answer to the system’s inherent inefficiencies.

Obama’s push for health reform has dominated his time in office and the law will be understood as a huge victory for him, especially as he persevered after it seemed that the bill would fail. He might even be hailed as another FDR (for the New Deal) or LBJ (for the Great Society). And the Republicans, by arguing that the changes represent a large-scale reorganisation, will have inadvertently bolstered this impression.

Many hoped the election of Obama would bring real, major change. At the press conference after the House healthcare vote, Obama said: ‘This is what change looks like.’ But the healthcare bill is not a major transformation akin to the New Deal or Great Society. Instead, it reveals what Obama’s brand of ‘change’ amounts to: tinkering on the edges and redefining downwards what true change entails.

Only those with low expectations could conclude that these reforms constitute a major overhaul that solves most or all of the system’s flaws. Unfortunately, such low expectations are all-too commonly found today. We need to raise our horizons and expect more if we are to see what is really going on.

Sean Collins is a writer based in New York. Visit his new blog, The American Situation, here.

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Topics USA


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