It is hard to read Remedy and Reaction, Paul Starr’s remarkable chronicle of the hundred-year effort to legislate universal health insurance in the United States, without recalling Robert Gibbs’s tortured quip that Democrats who’ve denounced the Obama White House for having knuckled under to Republican principles or intimidation “ought to be drug-tested.” Nobody with a sense of history—that is, nobody who reads Starr’s book—could doubt how sensible and brave was the president’s effort to drive the Patient Protection and Affordable Care Act of 2010 through Congress. Nobody with a feel for the present moment should doubt how imminent is the threat to the act, how urgent it is for progressive Democrats to rally around Obama—and without all the condescending qualifications that “independents,” who flock away from allegedly weak or incompetent leaders, interpret as contempt.
Starr, who teaches at Princeton and, with Robert Kuttner and Robert Reich, founded The American Prospect, has written 300-plus pages of tightly woven policy description, narrative and polemic. … Starr learned his lessons the hard way. He closely advised the Clintons on health strategy in the early 1990s (he still knows and has debriefed key Congressional staffers). The centerpiece of Remedy and Reaction is a long section, full of illuminating asides, on the frustration of the Clintons’ plans. Starr shows that, even as Bill Clinton submitted his bill to Congress, some 70 percent of voters subscribed to the principles embodied in the legislation he proposed. Yet the bill didn’t come close to being enacted.
Obama’s actions were cannier than Clinton’s, but they also amounted to a profile in courage. When Obama came into office, Starr explains, only 11 percent of Americans thought reform would have a “negative personal impact,” but by August 2009 this segment of the population was trending to 31 percent. Both Rahm Emanuel and Joe Biden were urging retreat. Starr writes, “Obama not only resolved to go ahead; in September and again in the new year, the president took charge of the effort to steady the health-care initiative and prevent it from careening off the tracks.” Nor was the final bill anything less than what might reasonably have been expected, filling as it did the negative space left by four generations of government programs and serial compromises. Starting with clean sheets of paper was never realistic when one-sixth of the economy was at stake.
Starr’s great fear is repeal of the Affordable Care Act, which would not only deny healthcare to more than 30 million people but would cast doubt on whether “Americans will ever be able to hold their fears in check and summon the elementary decency toward the sick that characterizes other democracies.” Obamacare, in short, was healthcare reform’s best—and last—shot, and it would be unconscionable for liberals to remain cavalier about its defense, or Obama’s, for that matter. It’s past time to discard the misguided assumption that in a better economy, or with more of “a fighter” in the White House, something like a Canadian-style single-payer system might have been (or might sometime fairly soon be) enacted.
…
The story begins with the Progressive Era, when proposals for government-sponsored healthcare were heavily influenced by, of all things, Otto von Bismarck’s sly welfare legacy: the chancellor of Germany had introduced health insurance in 1883 as a way of co-opting proletarian leaders. Soon came the Coolidge-to-Hoover retrenchment. FDR’s New Deal never seriously mooted universal healthcare—more on this presently—but the Truman administration did, proposing a single-payer scheme modeled after Social Security. This went down to defeat. … The Kennedy and Johnson administrations finally delivered Medicare and Medicaid. …
In retrospect, the saddest chapter was the ridiculously damaging Jimmy Carter–Ted Kennedy fight over universal coverage (Carter opposed it), which roiled Congress and paved the way for Reagan’s reactionary “revolution,” after which single-payer would never be seriously considered again. Then came the Clintons’ letdown, though one triumph was the launch of the State Children’s Health Insurance Program (or S-CHIP) in 1997, sponsored by Kennedy and Orrin Hatch. …
…
The bottom line for voters, Starr explains, was that healthcare reform became practicable only as a guardian of, well, the bottom line. Premiums kept rising: overall expenditures jumped from about 9 percent of GDP in 1980 to about 14 percent in 1992 and 17 percent today. This frightening increase in the cost of care might seem to suggest an emerging conflict of interest between young and old (though the young worry about their parents, after all). What the increase really created, Starr shows, was a natural alliance in favor of “bending the cost curve” down while keeping the benefits up. Meanwhile, the expansion of “managed care” in Medicaid’s network allowed most voters to feel, vaguely and incorrectly, that the indigent would not be abandoned.
A third counterforce is regional lobbying. Starr reminds us at the start of his book that “every dollar spent on health care is also a dollar that someone earns from health care.” During the Clinton push, Florida legislators backed away from reform when the insurance industry mounted a TV campaign to convince seniors that Medicare benefits might be cut. And was there ever any point in trying to persuade Joe Lieberman, “the senator from Aetna,” to allow people over 55 to buy into Medicare? Nancy Pelosi’s staff told Starr that health industry lobbyists from states in which Medicare payment schedules were lowest are the ones who really killed the “public option,” because the only conceivable plan of this kind would rely on Medicare to establish rates of compensation, and even Democratic representatives refused to appear to be forcing the short end of the stick on their state’s providers. …
Given that “cost containment” became the game, and esoteric opinions about the numbers qualified one to play it, most voters were easily swayed by the claims and doubts of industry lobbyists presented as experts. Which is why it would have been irresponsible for Obama to try to pass reform without first lining up groups like the AMA, the drug companies and the hospital industry—all of which stood to gain new “customers” under the plan—in order to generate the kind of headlines that imply consensus.
…
Obama’s only real point of disagreement with Hillary, which he eventually conceded, had been about mandating that all citizens—including healthy, employed young people who think they are immortal—buy insurance. Obama had first proposed a mandate only for parents to insure their children; by July 2008 he said simply, “I kind of think Hillary was right,” and that was that. (The mandate, of course, was crucial to the act’s balance sheet, though it launched the raft of lawsuits that the Supreme Court will begin hearing in March.) Given the history that Starr so lucidly recounts, it’s clear that America’s healthcare reform was bound to look, at best, more like Switzerland’s mixed, complicated system, also based on private sector insurers, than like England’s simple, unified one, in which doctors are essentially government employees. Nor, once Obama assumed office, was he going to make the mistake of excluding the heads of key Congressional committees from writing the legislation within the parameters described. If they wrote it, they’d own it. He also succeeded where Bill Clinton had failed, lining up the hospital and drug industries—too discreetly for some critics—in advance of the Congressional push.
Through the summer of 2009, Obama waited for Senator Max Baucus, chair of the Finance Committee—an ally of House Blue Dogs from the conservative state of Montana—to try to bring around Olympia Snowe, one of Maine’s two moderate Republican senators. Baucus failed; there is no point rehearsing the sad story Starr tells. But did this mean Obama was deluded by his own rhetoric of bipartisanship and could have gotten a better deal had he been more combative? Not at all. Starr shows that Obama’s real goal was “bipartisanship in one party,” the not-monolithic Democratic Party. He worked with Blue Dog sympathizers in the Senate like Baucus (and Kent Conrad of North Dakota, Ben Nelson of Nebraska, etc.) to woo Snowe and the few other Republican moderates, not because he expected to gain Republicans but because he feared losing Democrats. If the reputations of moderate senators did not become inextricably bound with the health reform effort, they’d be able to walk away and face no censure from their voters.
What emerges most vividly from reading Starr is how reckless it was for critics to charge Obama with not making his own views clear enough, or losing control of the narrative, because he resolved to leave to Congress—within an agreed timetable—the work of filling in the details. Yes, the schedule did slip a few months as Baucus worked his committee, but a few months in a century-long effort was a trivial delay. And it would have been widely recognized as such but for the righteous indignation Obama endured during his first spring in office, when anger over the bailouts was white-hot, and his administration’s determination to regulate rather than nationalize the banks (remember Tim Geithner’s “stress tests”?) gave critics, especially on the left, an opening to depict the president as a creature of Wall Street—catnip for the nascent Tea Party, as it turned out.
Starr shows that when the details of the health legislation finally came out, including proposals to stipulate new Medicare standards of care, talk of “death panels” inflamed latent anxieties about government interfering with personal choices. The left was also incensed by the deal the White House had cut with Big Pharma prohibiting, as part of the legislation, direct negotiations with Medicare over prescription drug prices and excluding medicines imported from Canada. (The industry group PhRMA agreed, in return, to find $80 billion in discounts to Medicare, and to pay for an ad campaign supporting the legislation.) Starr adds that, although this was not publicly known at the time, the health insurance industry wrote an $86.2 million check to the Chamber of Commerce to mount a campaign against the legislation. “If Obama and the Democrats had been in a stronger position politically,” he writes, “they could have insisted on stronger cost containment and avoided making as large concessions to PhRMA and the hospitals as they did.” But sixty Senate votes meant everything. “Reform needed interest group allies: there would be no way to pass it if the entire health-care industry went into all-out opposition.”
* * *
Nevertheless, Obama pushed back hard. He called a press conference for July 22, laid out the elements of the plan as best he could and said of the insurers: “Right now, at the time when everybody’s getting hammered, they’re making record profits and premiums are going up.” Starr—tactful to a fault this time—neglects to add that the real news made at the press conference was Obama’s offhand remark that Cambridge police had acted “stupidly” in arresting Harvard professor Henry Louis Gates in his own home. The remark was true, but it put Obama on a kind of probation because it gestured toward the incipient gulf between the young, black, brainy president and lunch-pail whites like Sgt. James Crowley (the arresting officer), people who had first backed Hillary and then, like “Joe the Plumber,” went in large numbers for John McCain.
Ironically, working-class voters stood to gain much more predictable medical coverage from healthcare reform, because pre-existing conditions and unemployment would no longer interrupt it. But the Gates incident reinforced how hard it would be for Obama to overcome latent suspicions that his healthcare plan was a new kind of affirmative action program or a new bailout for losers, foisted on ordinary people by a patronizing elite shuttling between Harvard Yard and Goldman Sachs. Obama finally stemmed the tide against the bill with a landmark speech to Congress in September, Starr recalls. But much damage had already been done. Months later, the Democratic nominee for Ted Kennedy’s seat, Martha Coakley, campaigned ineptly, as if the healthcare proposal pending in the Senate, for which her vote would be crucial, did not exist. The loss of the Massachusetts Senate seat required Obama to hit the road and to embrace a tactical maneuver by which the House simply adopted the Senate bill.
Criticism of the Obama administration gained momentum through 2009, and even became strangely vogue among economists and columnists who were widely thought to be on the president’s side. It was in this context that voices who had lionized Obama—from seasoned pragmatists like Robert Reich (who blurbs Starr’s book) to MoveOn.org—spoke of the “public option” as the holy grail, and of Obama as its perfidious guardian.Perhaps it was the magical word “public,” or the vague sense that Obama, having worked to salvage banks and restructure the car companies, was now protecting the profits of insurance companies. Perhaps it was the way this insinuation was magnified by the charge that the members of Obama’s economic team were mostly disciples of Robert Rubin, thus to blame for deregulating investment banking and causing the financial crisis in the first place. Perhaps it was the way Obama’s half-heartedness about a public plan, which he knew the Senate would never give him, suggested timidity. In any case, Obama’s left critics now lambasted him. Former DNC chair Howard Dean declared in November 2009 that without the public option “this bill is worthless and should be defeated”—not grounds for drug testing, perhaps, but possibly for prescribing some Xanax.
The bill eventually passed, but it had become advantageous on the right, and fashionable on the left, to hold Obama responsible for failing to bring unemployment down to pre-recession levels in just twelve months. … For the first African-American president, surely the cruelest charge from the left was that in pursuing healthcare the way he did, he had wasted an “FDR moment.” … Indeed, FDR’s entire reform strategy depended on holding together a coalition that required him to ignore, if not pander to, the grotesque racism of the South. He got Social Security (and other bills) passed by appealing to immediate and universal pocketbook interests, and with a larger Senate majority, which reserved the filibuster mainly for civil rights; to appease Southern Democrats, he agreed to exclude domestic servants and farm laborers (e.g., sharecroppers) from the initial Social Security program.
…
Dean supposed that the proposed public option would compete with private insurers on the exchanges and cause the costs of premiums to fall. But would they have? Dean was right that a public option keyed to Medicare rates would have saved the government considerable money—$110 billion over ten years, according to the Congressional Budget Office (CBO). But, again, states where Medicare payments were low killed the idea. Pelosi was stymied. Without Medicare as the basis, any imaginable public plan would not have been cheaper than private plans.
…
This last point, of course, is the timely one. Starr is priming us for the 2012 election, …It would be a shame, Starr warns, if the president who husbanded this once-in-a-lifetime legislation to victory is beaten by a Republican claiming the need for “leadership” in the White House—a double shame if misinformed Democrats, nursing their “disappointment,” continue to help make that need seem plausible.
