Remedy and reaction: the peculiar American struggle over health care reform

Abstract

SHORTLY BEFORE MIDNIGHT ON MARCH 23, 2010, PRESIDENT Obama signed the Patient Protection and Affordable Care Act into law. The landmark health care reform statute had passed only after a protracted and tortuous legislative process, culminating in an unconventional parliamentary maneuver involving a second bill amending the act and approved by Congress 2 days later. This represented the first time major US social legislation had been enacted on a strictly partisan basis. Reaction on this occasion was remarkably swift and dramatic. Within minutes of the President’s signing of the act, 13 state attorneys general filed a lawsuit asking that it be declared unconstitutional. These and other challenges leave the ultimate fate of the act in considerable doubt. The fierce controversy over health care policy in the United States is unusual in both intensity and persistence compared with the experience of other countries. Enactment of the Affordable Care Act followed nearly a century of repeated reform efforts, each different in strategy and substance. In the meantime, every other industrialized nation adopted some means of ensuring health care for all its citizens, at much lower cost, with far less complexity, and with equivalent if not superior anticipated outcomes. This divergence between the United States and other countries cannot be explained merely by a US political culture favoring individualism and opposing government intervention more strongly than elsewhere, because in other respects, such as with Social Security, the United States departed from a model of pure self-reliance long ago. Nor can it be explained solely by sharply increased polarization in US politics, because that trend presupposes greater bipartisanship in the past. Although these are parts of the explanation, the key is what Paul Starr calls a health “policy trap” unique to the United States, constituted by “an increasingly expensive and complicated health-care system that nonetheless satisfied enough people as to make it deeply resistant to change” (p 268). In Remedy and Reaction: The Peculiar American Struggle Over Health Care Reform, Starr describes how the United States reached this impasse and its implications for politics and policy. About half of the book is devoted to the history of health care reform leading to the Affordable Care Act and half to analysis of the act. These aspects complement each other, showing the continuities between the earlier history of health care reform and that of the act and the entanglement of policy with history. A prime example of these continuities is the policy trap, which results from policy decisions made in response to the historical circumstances of their day. The ramifications of these decisions were often not anticipated but nevertheless accumulated and constrained later decisions and the politics surrounding them. Thus, in contrast with most historical accounts of US health care policy, which emphasize failed attempts at reform, this account directs attention to the partial successes and their unintended consequences. One of the most important partial successes was the decision of President Truman’s administration, after the defeat of his national health insurance initiative, to focus on health insurance for the elderly, leading to enactment of Medicare in 1965. A second is the decision of the Internal Revenue Service, as codified in the tax code in 1954, to treat the value of employer-sponsored health insurance as a nontaxable “fringe benefit.” This provision now rivals Medicare and Medicaid in its effects on the federal budget. It therefore speaks volumes about both the power and the insidious nature of the policy trap that, when asked at a Senate hearing at the time how much the tax exclusion would cost, an administration official responded, “We haven’t any figures at all on that” (p 42). These and other decisions were well-intentioned and yielded many benefits, but they made further progress increasingly difficult. By removing the elderly and much of the working population from the uninsured, Medicare and the tax exclusion also removed much of the impetus for extending coverage to those still lacking it. The direct cost of Medicare and employer-provided coverage of beneficiaries is obvious, supporting the sense that beneficiaries’ benefits are earned, while the heavy government subsidies involved are all but invisible. Extending similar benefits to others thus not only threatens a tax increase for those already covered but also can readily be understood or characterized as “welfare” and incompatible with US political ideals. The piecemeal approach to health insurance coverage did little to address problems in health care delivery, but it increased vested interests in maintaining the status quo. Over time, reform proposals tended to leave more and more of the enormously complicated web of health care subsystems in place. One result is the great complexity of the Affordable Care Act, which provides yet another reason for objecting to it. None of the numerous other histories of US health care policy develops these themes in such an illuminating fashion. In its penultimate chapter, this book also provides one of the clearest descriptions and best justifications of the Affordable Care Act published to date—and the chapter is still nearly 30 pages long.

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