A Triumph of Misinformation

Most of what everyone "knows" about the demise of health-care reform is probably wrong—and, more important, so are the vague impressions people have of what was really in Hillary Clinton's plan

The other purely political calculation concerned sales strategy. Throughout his campaign Bill Clinton had emphasized the overall cost of medical care as a central evil of the U.S. system. Americans spend about twice as much money per capita on medical care as people in other developed nations, with results that are not twice as good. Whenever he was asked about cutting the budget deficit or taming the entitlements monster, Clinton said that the first and most important step was to control health-care costs. This approach won the support of business, since health insurance costs had for years been rising faster than any other business expense. (From 1948 to 1990, Paul Starr points out, business spending on health coverage rose by an average of 15.6 percent a year.) Through most of 1993, while the plan was being developed and unveiled, major business groups like the U.S. Chamber of Commerce and the National Association of Manufacturers supported its general outlines and accepted even its "employer mandates," which would require companies to pay most of the cost of coverage for their employees. But by the summer of 1994 the Administration was selling the plan mainly as a matter of fairness and security. Its slogan was "Health Care That's Always There."

In theory the Administration could have kept stressing both aspects of its plan—that it would make individuals more secure while reducing the strain on business. The peculiar logic of health-care economics, as revealed in most other developed countries and in American group-care systems, is that when everyone is covered, it becomes easier to control overall costs.

The Administration's political experts, however, recommended a more streamlined sales approach. Clinton's pollster, Stanley Greenberg, produced results in 1993 showing that no one believed that a government health-care plan could ever save money. Although opinion polls taken through the end of 1993 showed that most people supported the idea behind Clinton's plan (once pollsters explained what the idea was), most people also believed that the plan would drive costs up, not down. Therefore the more the Administration emphasized its cost-control themes, the less believable it would become. "The polls showed that people will trust the government to guarantee them security," Magaziner told me. "They will not believe that the government can control costs."

As Republican opposition to the bill increased in 1994, Democratic strategists decided that "security" would be a more effective, partisan rallying theme. "You have to mobilize people, and it's hard to mobilize people around words like 'cost containment' or 'universal coverage,'" Hillary Clinton told me. "So if we didn't convince the middle class that universal coverage meant them, we wouldn't get the political support. . . . If you talked about how they could lose their job, how they are one divorce or one pre-existing condition away from losing coverage, then perhaps they would get engaged." By the end of the struggle this sales approach made the Administration even more vulnerable to Republican charges that it was putting out a bighearted, soft-headed, typically liberal plan.

One other enormously important, and almost purely political, decision sealed the fate of the bill. Magaziner and Hillary Clinton had hoped to present the bill to Congress a few months after the Inauguration, in the spring of 1993. Thanksgiving had nearly come before they were actually ready to present a finished bill. That delay had little or nothing to do with the nuances of policy. It had everything to do with political necessity—and of a sort that everyone knew was sensible at the time.

Third count: "The First Lady's whiz-kids wasted precious months." This was how The Economist stated the next objection. Rather than getting busy and presenting the plan when the Administration still had a dewy glow, the health team sat around until it was too late.

The Administration's original strategy was to rush the health plan through as part of its first budget-reconciliation bill. That would have meant having detailed health proposals ready by April at the latest, and the task force had been geared toward meeting that deadline. The genius of this approach, little noticed by the public, is that it would have allowed the health plan to pass with a simple majority vote.

Congressional politics has quietly moved into the "supermajority" system that Lani Guinier was widely denounced for seeming to recommend. In theory it takes fifty one votes to get a bill through the Senate. In reality it takes sixty votes to end a filibuster, so Bill Clinton knew that the Senate's forty-plus Republicans could stop nearly any legislation they chose.

They could not stop budget bills. These come to the floor under rules that limit debate, and with only a fifty-one-vote majority required for passage. So if the health care plan could be made part of the budget bill, the Administration could get it acted on quickly, with enough of its own party's votes to see it through.

The Senate's majority leader, George Mitchell, endorsed this strategy, but its de facto parliamentarian, Robert Byrd, objected, scuttling the plan. The Administration then decided that it would introduce the health-care plan as soon as the budget bill passed. But passage was the rub. The budget bill, with its big deficit-reduction package, was seen by everyone in Washington as a major early test of the Administration's strength. (The struggle over the bill is the subject of Bob Woodward's book The Agenda.)

The budget fight dragged on much longer than Bill Clinton had hoped or planned. As it became obvious that the final budget vote would be very close (on August 6 it finally passed the Senate 51-50, with Vice President Al Gore casting the deciding vote), the Administration wanted to avoid any extraneous controversy that might affect it. Clinton had been scheduled to make the final decisions about the health care plan in late May. Because of fears that leaks about his choices would complicate the budget vote, the decisions were put off—a delay that had ripple effects lasting the rest of the year. Without Clinton's decisions, the task force could not prepare detailed legislation; without legislation, it could not start negotiations with congressmen and their staffs. Without final choices on what would be in the package, it could not prepare budget estimates; without those estimates, the Treasury and the Congressional Budget Office could not vet the plan.

By the fall the budget fight was over—but then NAFTA became the issue of the moment. Clinton had been scheduled to spend most of the month of October traveling and speaking about the health-care plan. As he was flying to his first event, a labor convention in California, news came that U.S. soldiers had been killed in Somalia. Clinton flew back to Washington after his speech and spent most of the month dealing with Somalia and NAFTA; he canceled all the other health care events.

Despite the delays and missteps, when the President finally unveiled the plan, in September of 1993, it seemed to have a good chance. "The reviews are in and the box office is terrific," the political analyst William Schneider wrote just after it was presented. "President Clinton's health care reform plan is a hit. . . . The more people read and hear about the plan, the more they seem to like it."

Six weeks after the Inauguration, Magaziner had written a memo to Bill and Hillary Clinton saying that if health-care-reform legislation was not presented and passed immediately, it probably could not be passed during "your first term." With Republican midterm gains in Congress, it now appears that this prediction will be borne out. But the delay was neither negligent nor intentional. It is a reminder of how quickly events spin out of a President's control, and how rare it is for him to be able to advance his own agenda rather than respond to someone else's emergency.

Fourth count: The plan had delusions of grandeur. Now we move to the substance of the plan, which has been described as a regulatory rat's nest, a nightmare of overambitious social engineering, and a sweeping solution where modest reforms would do.

The reality is that very little in this plan was new or unprecedented, and that it was barely more complex or comprehensive than most other plans.

When people complained that the plan was grandiose, they had three features in mind: universal coverage (everyone would be insured, whether working or not), community rating (everyone in a given region would pay the same premium for coverage, regardless of age or pre-existing conditions), and employer mandates (forcing businesses to cover much of the insurance cost).

All these ideas have been part of the health-care-reform debate for years. Universal coverage and community rating sound like bleeding-heart concepts, but they are based on tough economic reasoning. The idea behind both is that piecemeal reform of a health-care system can be worse than no reform at all.

The fairness argument for universal coverage is obvious. Even people who are poor deserve care when they are sick or hurt. This is why every developed nation except the United States offers universal care. The economic argument has become almost as familiar. Even people without health insurance ultimately receive treatment, when they show up in emergency wards; hospitals cover the cost by padding charges for everyone else. This backhanded form of coverage is neither economically efficient nor humane. As recently as the fall of 1993 Bob Dole was saying that universal coverage was a "non-negotiable goal of reform."

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

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