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Contact Us Fall 2000; Volume 1, Number 1
Features: Election 2000

Health Care Reform: A Century of Defeat
Jacob Hacker
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The rise and fall of health care reform is the oldest story in American health politics. Time and again in the twentieth century, reformers have unsuccessfully fought for expanded or universal health insurance. Then, in the aftermath of political defeats, private market actors have rapidly transformed health care financing and delivery. After World War II, this old story gained a new twist with the passage of federal legislation to augment the technological arsenal of American medicine. Even as proposals for national health insurance languished in Congress, the federal government subsidized private health insurance through the tax code and pumped public funds into hospital construction and medical research, generating new markets, profits, and political resources for major stakeholders in the one-seventh of the American economy now devoted to health care.

Only in 1965, with the passage of Medicare and Medicaid, was this pattern of defeats followed by market transformations and incremental reforms momentarily broken. Yet that rare moment of victory for advocates of extended public financing did not prove to be an entering wedge for universal health insurance, as reformers back then had hoped. By the 1970s, distrust of government, slow economic growth, and mounting fiscal constraints left reformers struggling to protect existing public programs with little hope of achieving the universal health coverage and systemic cost-containment that other nations' citizens took for granted.

Today, in the aftermath of the spectacular failure of the Clinton health plan, health care reformers are once again turning to incremental alternatives to a national health plan, from augmenting Medicare, to creating new state-based programs for children, to expanding tax breaks for private health insurance. Reformers may well win important victories. But in the current environment of dwindling private coverage and enduring political opposition to public social insurance, these new campaigns are unlikely to make much of a dent in health care costs or stem the growing ranks of the more than 40 million uninsured Americans. For all the evident public dissatisfaction with American health insurance, major systemic change will require the conjunction of favorable political opportunities and the formation of an effective coalition behind reform. Nearly a century of defeated aspirations drives home just how elusive this matching of opportune moments and powerful political movements has been.

Defeat of Health Security
The Health Security plan sponsored by President Bill Clinton during 1993 and 1994 aimed to break the political impasse facing post-1960s health reformers. With a window of opportunity for government-led reforms finally open, President Clinton sought to enact comprehensive federal rules that would, in theory, simultaneously control medical costs and ensure universal insurance coverage. The bold Health Security initiative was meant to give everyone what they wanted, delicately balancing competing ideas and claimants, deftly maneuvering between major factions in Congress, and helping to revive the political prospects of the Democratic Party in the process.

But, as everyone knows, the Health Security effort failed miserably. And the electoral headway made by strong-willed conservative Republicans in the wake of the Health Security debacle has threatened to turn American health politics upside down. For more than a decade, congressional budget hawks and antigovernment conservatives have been closing in on Medicare and Medicaid, two of the fastest growing items in the federal budget. During the 1980s, hard-core conservatives within the Republican Party gained influence and visibility while developing tough new strategies for achieving their goals. After the political reversals of 1994, the new Republican majority advanced proposals to rein in the growth of Medicare and Medicaid, restructure Medicare, and devolve responsibility for determining Medicaid eligibility and benefits to the states. Those proposals ultimately provided the opening for counter-maneuvers by President Clinton, who used his veto to bury the Republicans' balanced-budget initiative and thereby position himself for victory in the 1996 presidential election. But calls for the retrenchment of public social programs did not go away with the defeat of the 1995 budget plan, and the idea of major Medicare reform remains alluring even to those conservatives who have adopted a moderate social policy agenda, such as Republican presidential hopeful George W. Bush.

Despite a strong economy and healthy budget, the failure of health care reform in the early 1990s still hangs like a dark cloud over contemporary health care debates. The Clinton reform effort reflected a widespread recognition of the limits of the private health insurance market and of the corresponding need for an inclusive public framework for pooling health risks, containing medical costs, and subsidizing low-income workers. Its defeat, however, strengthened an alternative view of the government's role in the medical sector, a philosophy premised on the notions that health care should be treated as much as possible like other market goods and that large insurance pools should be split up to encourage individual cost awareness and personal responsibility. This ideological transformation has been helped along by the need for budgetary adjustments in public health programs and by dramatic changes in the private insurance market that are moving more Americans than ever into "managed care" plans. Chastened by the implosion of the Health Security campaign in 1994, politicians on the left have also backed away from the reform agenda of the early 1990s and moved to embrace minimal incremental changes in the private insurance market and modest coverage expansions, such as those contained in the Health Insurance Portability and Accountability Act of 1996 and the Children's Health Insurance Program of 1997. Even the calls for expanded health coverage touted during the 2000 primaries by former Senator Bill Bradley and Democratic presidential nominee Al Gore—modest initiatives designed to bolster private insurance and expand programs for children and the working poor—clearly bear the scars of the Clinton debacle.

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