The Real Story of Obamacare's Birth

The U.S. Supreme Court’s remarkable 6-3 decision in King v. Burwell saves the Affordable Care Act from evisceration, although Obamacare will undoubtedly face a continuing pattern of guerrilla attacks from Congress, the courts, and Republican governors and state legislatures. Still, as many observers have pointed out, the core elements of the plan, including the exchanges, the subsidies, the individual mandate, the expansion of coverage in family plans to children 26 and under, and the elimination of lifetime limits and of preexisting conditions as bars to coverage, are almost certainly here to stay.

This is, of course, a huge victory for President Obama. But the passage, implementation, and ratification of Obamacare continue to be plagued by a widespread belief that it was tarnished by the way it was proposed and debated.  A raft of reporters, commentators, and politicians argue that the president made a huge mistake in taking up healthcare at the beginning of his term, before building relationships of trust with Republicans, and then compounded that error by jamming it through quickly without any Republican input or efforts to find common ground.

In the aftermath of King v. Burwell, it is worth going back and recounting what actually happened leading up to the enactment of Obamacare, and reflect a little bit on what might, and what should, happen going forward.

Did Obama Leap Rashly to Consider Healthcare Instead of Focusing on Jobs or the Economy?

There is no doubt that the president made healthcare reform a top early priority. There was good reason for doing so; past experience, including that of the Clinton health-reform plan, showed that waiting to pass a major social-policy change, in the absence of a great crisis, is a fool’s errand. A president’s momentum, his public support, and the backing of his party peak early, and major social-policy change by definition shakes up the status quo, creating losers along with potential winners and an even larger number of those unsettled by change. The longer presidents wait, the greater the likelihood that their opposition will mobilize and exploit uneasy voters. And the closer midterm elections loom, the more nervousness builds among lawmakers from the president’s party.

So to accomplish a goal that had eluded a slew of previous presidents, it was necessary to start early. But it is also the case that the White House and Democrats in Congress did not lead with healthcare reform. They began, instead, with a series of actions aimed at the broken economy, including the auto bailout and the major stimulus package, which included a series of programs to help financially strapped Americans, and to get more back to work.

We know that congressional Republicans pursued a conscious strategy not to cooperate with Democrats on the stimulus, voting in unison in the House against it. Very early on, Dave Obey, then chairman of the House Appropriations Committee, asked his counterpart on the committee, Republican Jerry Lewis, to get his leaders and rank-and-file to provide Republican ideas to include, and non-starters to exclude, in a stimulus plan and was told that there were orders from “on high” not to cooperate. But despite that, the stimulus package was adopted over a Senate GOP filibuster before a healthcare reform effort moved into full bloom. Could the stimulus have done more to create jobs in the short term? Certainly—but in part to accommodate Senate Republicans like Charles Grassley, who nonetheless ended up voting against the bill, 40 percent of the stimulus package was tax cuts that mostly did little either to add jobs or stimulate the economy.

Did Obama Jam Through the Affordable Care Act Without Consulting Republicans or Working With Them to Find Bipartisan Cooperation?

The Obama White House took a number of lessons from the Clinton experience with healthcare policy. First, do not rely on your own, detailed White House plan as the starting point for negotiations in Congress; let Congress work out the structure and details from your  goals. Second, try from an early point to get buy-in from the major actors in the health world, including insurers, physicians, pharmaceutical companies, hospitals and other providers, to at least defuse or minimize their opposition. Third, recognize that the House and Senate are very different institutions, and let each work through its own ideas and plan before finding ways to merge the two into a single bill. Obama and his White House executed those lessons brilliantly.

There was a fourth lesson: Try in the Senate to find Republican support at an early stage, instead of waiting until the political dynamic shifts toward implacable opposition. The failure to engage John Chafee, Chuck Grassley, Orrin Hatch, and their colleagues at an early point in 1993, when they crafted their own plan and were willing to negotiate and cut a deal, proved deeply damaging, if not deadly in 1994. As the midterms loomed and Democrats were on the defensive, Chafee and his colleagues were told by then-Republican Leader Bob Dole that there would be no deal, period.

In the House, that lesson was not applicable this time; Eric Cantor and House Republicans had already made it crystal clear that they were not cooperating under any circumstances. There, Democrats debated the issue for several months, but mostly amongst themselves, before introducing a detailed bill that emerged from committees in July 2009 and passing it through the House later in the year with just one Republican vote.

But with Obama’s blessing, the Senate, through its Finance Committee, took a different tack, and became the fulcrum for a potential grand bargain on health reform. Chairman Max Baucus, in the spring of 2009, signaled his desire to find a bipartisan compromise, working especially closely with Grassley, his dear friend and Republican counterpart, who had been deeply involved in crafting the Republican alternative to Clintoncare. Baucus and Grassley convened an informal group of three Democrats and three Republicans on the committee, which became known as the “Gang of Six.” They covered the parties’ ideological bases; the other GOPers were conservative Mike Enzi of Wyoming and moderate Olympia Snowe of Maine, and the Democrats were liberal Jeff Bingaman of New Mexico and moderate Kent Conrad of North Dakota.

Baucus very deliberately started the talks with a template that was the core of the 1993-4 Republican plan, built around an individual mandate and exchanges with private insurers—much to the chagrin of many Democrats and liberals who wanted, if not a single-payer system, at least one with a public insurance option. Through the summer, the Gang of Six engaged in detailed discussions and negotiations to turn a template into a plan. But as the summer wore along, it became clear that something had changed; both Grassley and Enzi began to signal that participation in the talks—and their demands for changes in the evolving plan—would not translate into a bipartisan agreement.

What became clear before September, when the talks fell apart, is that Senate Republican Leader Mitch McConnell had warned both Grassley and Enzi that their futures in the Senate would be much dimmer if they moved toward a deal with the Democrats that would produce legislation to be signed by Barack Obama. They both listened to their leader. An early embrace by both of the framework turned to shrill anti-reform rhetoric by Grassley—talking, for example, about death panels that would kill grandma—and statements by Enzi that he was not going to sign on to a deal. The talks, nonetheless, continued into September, and the emerging plan was at least accepted in its first major test by the third Republican Gang member, Olympia Snowe (even if she later joined every one of her colleagues to vote against the plan on the floor of the Senate.)

Obama could have moved earlier to blow the whistle on the faux negotiations; he did not, as he held out hope that a plan that was fundamentally built on Republican ideas would still, in the end, garner at least some Republican support. He and Senate Democratic leaders held their fire even as Grassley and Enzi, in the negotiations, fought for some serious changes in a plan that neither would ever consider supporting in the end. If Obama had, as conventional wisdom holds, jammed health reform through at the earliest opportunity, there would have been votes in the Senate Finance Committee in June or July of 2009, as there were in the House. Instead, the votes came significantly later.

To be sure, the extended negotiations via the Gang of Six made a big difference in the ultimate success of the reform, but for other reasons. When Republicans like Hatch and Grassley began to write op-eds and trash the individual mandate, which they had earlier championed, as unconstitutional and abominable, it convinced conservative Democrats in the Senate that every honest effort to engage Republicans in the reform effort had been tried and cynically rebuffed. So when the crucial votes came in the Senate, in late December 2009, Harry Reid succeeded in the near-impossible feat of getting all 60 Democrats, from Socialist Bernie Sanders and liberal Barbara Boxer to conservatives Joe Lieberman, Ben Nelson, Mark Pryor, and Blanche Lincoln, to vote for cloture, to end the Republican filibuster, and to pass their version of the bill. All sixty were needed because every single Republican in the Senate voted against cloture and against the bill. Was this simply a matter of principle? The answer to that question was provided at a later point by Mitch McConnell, who made clear that the unified opposition was a ruthlessly pragmatic political tactic. He said, “It was absolutely critical that everybody be together because if the proponents of the bill were able to say it was bipartisan, it tended to convey to the public that this is O.K., they must have figured it out.”

The delays engendered in large part by the extended negotiations with Republicans in the Gang of Six, meant in the end that the normal legislative process—in which separate bills passed by House and Senate would be reconciled in a conference committee—was not going to work in this case. When the vacancy caused by the death of Senator Edward M. Kennedy was filled via a January 2010 special election by Republican Scott Brown, Democrats lost their 60th vote—and the McConnell strategy meant that there was no way, no matter what changes Democrats were willing to make in the final package, that there would be a single Republican vote to get them past the filibuster hurdle. Hence, the fallback to using reconciliation to bypass the filibuster in the Senate, and the inability to smooth out the rough edges and awkward language in the final bill that was enacted.

McConnell’s hardball strategy certainly worked as a political weapon. The narrative of Obama steamrollering over Republicans and enacting an unconstitutional bill that brought America much closer to socialism worked like a charm to stimulate conservative and Republican anger. The 2010 midterm elections resulted in huge Republican gains across the country, a Republican majority in the House, and a much narrower Democratic majority in the Senate. But the strategy also prevented Republicans from having a much bigger impact on the healthcare reform bill—some level of cooperation would have meant more sweeping malpractice reform and reductions in defensive medicine, and more market-oriented approaches to many areas of health delivery. It also meant that the standard technical corrections bill that every major policy change requires was unavailable in this case, creating its own challenges for implementation of the Affordable Care Act.

At the same time, the overheated rhetoric, reinforced by conservative talk radio, cable television, blogs, and social media, has created a visceral backlash. It has kept every Republican presidential candidate calling for “root and branch” repeal of every element of Obamacare, prevented many states from expanding insurance to millions of people who need it via Medicaid, and erased any hope for the foreseeable future of bipartisan efforts to revise or tweak the law to make it more effective.

Interestingly, even Obama has said that Obamacare was drawn from Romneycare, the Massachusetts plan championed by then-Governor Mitt Romney. But Romneycare was itself derived from the Chafee / Grassley / Durenberger / Hatch Republican alternative to the Clinton plan. The essence of Obamacare is a structure devised in 1993-94 by those Republican senators, then rejected and renounced in apocalyptic terms by Grassley and Hatch. (Durenberger, retired from the Senate and a genuine expert on health policy and reform, took a very different tack from outside the body.)

Thanks in part to the overheated rhetoric demonizing the plan, guerrilla efforts to undermine its implementation and disrupt the delivery of its services continue apace. Perhaps they will end as it becomes clear, in the aftermath of King v. Burwell, that the law in its fundamentals is not going away. It may help a bit if more Americans, including prominent commentators, stop repeating a false political narrative about the genesis of Obamacare.