There were few moments in President John F. Kennedy’s brief tenure in office that seemed as promising as the afternoon of May 20, 1962, in New York City. In front of 20,000 senior citizens gathered at Madison Square Garden, Kennedy delivered a ringing defence of the health insurance legislation for the aged making its way through the Congress, and a none-too-subtle attack on its opponents in the medical and insurance professions. ”œThis,” exhorted Kennedy, ”œis a problem whose solution is long overdue.” The crowd was enthusiastically appreciative, but even Kennedy’s supporters were skeptical about whether the speech had done enough to convince the much larger audience of television viewers " and voters " to whom the event was carried live by the three major networks of the time. In fact, it would take three more years, and a significant shift in the composition of the Congress, for Medicare to finally see the light of day in the United States.
The Kennedy administration would be remembered for many things " the defusing of the Cuban missile crisis, American involvement in Vietnam, and the controversy over civil rights " but health insurance would turn out to be one of its important legacies. The legislation President Kennedy defended in that 1962 speech was to lay the foun- dation for the Medicare and Medicaid bills signed into law by his successor Lyndon Johnson, and would spur his sur- viving brother, Senator Edward Kennedy, to be a life-long advocate for universal health insurance in the US.
President Barack Obama’s more recent engagement on this issue should be seen as part of a continuum of presi- dential efforts designed to shore up support for the difficult goal of health care reform. And it should also be under- stood as part of a very difficult historical trajectory. From the feisty offence plays of Harry Truman through to Bill Clinton’s all-out efforts, the domestic agenda of US politics has been marked by the battle scars of that great, unfin- ished business: universal health insur- ance for all Americans.
The remarkable exceptionalism of the United States in health policy is even more intriguing given the consid- erable interest in health insurance that stretches back to the early decades of the twentieth century during the progressive era. Indeed, by the mid-1910s, European precedents had convinced many social reformers and medical professionals that it was ”œinevitable” in the United States. The first attempts to promote government involvement were led by the irrepressible Theodore Roosevelt, who formally endorsed compulsory health insurance as leader of the Bull Moose Progressives in 1912. More plausible were the state-level ini- tiatives (particularly strong in California) but, as they were based on the German social insurance model, they were denounced as ”œforeign” infiltration and did not survive the First World War.
The election of Franklin Roosevelt, and his determination to actively respond to the Great Depression, would lay the basis for the Social Security Act of 1935 and affirm federal leadership in American social policy. Roosevelt’s hand-picked group of advisers showed interest in design- ing a health insurance provision, but the president was keenly aware of its vulnerability alongside the proposals for old age pensions, social assistance, and unemployment insurance. Health insurance was eventually left out of the 1935 bill, due to the controversy asso- ciated with the issue, fostered in large part by the opposition of business and the medical profession allied with con- servative interests in Congress. Nonetheless, the Social Security Act was ground-breaking legislation: nothing in Canada at the time could compare (indeed, Mackenzie King was privately appalled at FDR’s desertion of classic liberalism, while R. B. Bennett’s ”œNew Deal” was but a shadow of the origi- nal). The provisions of the Social Security Act would have a resounding impact on the future path of health care reform in the United States.
Roosevelt returned, belatedly, to health insurance once the Great Depression was over. As the Second World War wore on, Roosevelt became intrigued by British discussions of postwar reconstruction and the notion of ”œcradle-to-grave” security (which intimates credit to him, not to Lord Beveridge). Cautious about translating this vision into legislation, it was not until the 1944 presidential campaign in the final months of war that Roosevelt focused on an ”œeconomic bill of rights,” including the right to medical care.
When Harry Truman was left to take on Roosevelt’s legacy, he was determined to maintain existing social programs to highlight the conti- nuity in leadership, and to champion health insurance as a way of carving out his own reform legacy. Unlike his predecessor, Truman was prepared to forge ahead despite the controversy surrounding health insurance. The for- mer straight-ticket New Deal senator must have been aware of the opposi- tion to such an initiative. Perhaps, like Kennedy, Clinton and Obama after him, he misjudged their strength; more likely, as his contemporaries noted, ”œhe didn’t give a damn.”
On November 19, 1945, Truman presented an historic message to Congress on health reform, the first president ever to do so, emphasizing the link to Roosevelt’s call for ”œfree- dom from want.” His proposals (including investment in hospital construction, public health, medical train- ing and research, and a plan for ”œpre- payment of medical costs”) were endorsed by many groups, including organized labour, and for a time they enjoyed substantial public support. But it is difficult to overestimate the hostility to health insurance in the 1940s, not only among Republicans, but more acutely within Democratic ranks. The ”œconservative coalition”’ that had emerged in opposi- tion to the New Deal grew ever more powerful as southern Democrats flexed their political muscle against Truman " the Dixiecrats of the 1940s make today’s Blue Dog Democrats look like amiable puppies. Added to this was the onslaught of public relations cam- paigns led by the American Medical Association. The lurid spectre of ”œsocialized medicine” turned out to be particularly successful in the context of the nascent Cold War.
Truman tried no less than three times to press forward health insurance legislation but, like Bill Clinton’s, his failure would be a crucial factor in the Republican’s regaining of Congress and, eventually, the presidency. During the 1950s, the frustration engendered by anti-health insurance campaigns and the sustained hostility in the Congress forced reformers to refocus their attempts on something more modest " and more politically feasible. Two trends cemented this approach. The Social Security Act had created a new ”œentitlement” group: the elderly in America. Politically appealing in a motherhood-and-apple-pie sort of way, the elderly were also becoming a pow- erful lobby in their own right, and the importance of the ”œrocking chair” vote was apparent. In addition, in the absence of government health insur- ance initiatives, employer-based bene- fits and private insurance were filling the vacuum, leaving the elderly as the most vulnerable to the effects of ill health and medical costs.
From this strategy emerged the proposals that would lead to Kennedy’s initiatives, labelled ”œthe foot in the door to socialized medi- cine” by its opponents. It would take no less than the breakthrough 1964 election, President Johnson’s epic War on Poverty, and the concerted biparti- san politicking for which Congress is so famous, for publicly financed health insurance under Medicare and Medicaid to be passed in the United States. The final compromise included a social insurance program for hospital insurance for the elderly (Medicare Part A), a voluntary medical insurance plan (Medicare Part B), and a means- tested addition to cover the medically indigent (Medicaid).
It was not without reluctance that US reformers turned away from ”œuniversal” health insurance for the time being, and this would become the most important feature distinguishing it from the Canadian approach. The Social Security Act had set the precedent for age-based cleavages in the social benefits, and it reinforced the idea of ”œdeserving” groups. In Canada, no such precedent had been firmly insti- tutionalized, and while reform efforts would begin with hospital insurance first, and then medical care later, the universality principle held firm.
Through Medicare and Medicaid, the US government took on the responsibility to guarantee access to health care for those groups most like- ly to be shut out of the voluntary and employer-based market for health insurance in the United States. In other words, government was relegated to the role of insuring groups with the highest actuarial risk. Although both insurance interests and the medical lobby were initially hostile to such reforms, they were given important roles in the organization and delivery of these benefits. As originally written, Medicare instructed the federal govern- ment to cover any ”œreasonable costs” billed by hospitals and doctors. The public sector, therefore, was obliged to participate in the private market for health care, even though it had little influence in controlling costs.
The steep increase in the cost of and the explosion in public expendi- tures for health care in the United States led to a shift in the focus of health care reform from improving access to health insurance to control- ling the costs of health care. The Nixon administration’s program for group-based health insurance was unsuccessful, although it did encour- age the proliferation of health mainte- nance organizations (HMOs) in the United States and was considered the forerunner of ”œmanaged care” propos- als. Throughout the 1970s, congres- sional Democrats (led by Senator Edward Kennedy) attempted to link access and cost concerns with renewed demands for national health insur- ance, but the enduring divisions with- in the Democratic Party on the issue, the hostility of the Republican opposi- tion and the persistent resistance of provider groups precluded such reform initiatives.
The widespread reluctance to embark on new spending for entitle- ment programs and the conservative backlash pushed national health insur- ance out of the spotlight in the 1980s. At this point, reforming health care meant reducing federal expenditures, particularly spending on entitlement programs such as Medicare and Medicaid. Federal payments for Medicaid programs were substantially reduced, forcing states to modify their benefits and eligibility criteria. Medicare was a more difficult target, since it enjoyed widespread bipartisan support, bolstered by a large and politically influential clientele, the aged. Despite the free- market rhetoric of the administration, the focus of health care reform shifted to the regulation of the market for health services by imposing limits on Medicare payments to doc- tors and hospitals. In 1982, the reimbursement of ”œreasonable costs” was replaced with a prospective schedule of fees based on ”œdiagnostic related groups” (or DRGs), and Medicare beneficiaries were encouraged to use ”œpreferred provider organizations” (or PPOs). In 1984 and 1986, freezes were imposed on Medicare reimbursements for physi- cian fees. Private insurers, at the same time, began to impose greater restric- tions on the type and extent of reim- bursement they would cover. Ironically, American doctors, who had fought compulsory national health care insurance on the grounds of physician autonomy, now found themselves increasingly regulated by insurers and more awash in paperwork and billing problems than their Canadian counterparts working within a public health insurance system.
By the late 1980s, as health care expenditures continued to soar in the United States, cost concerns became inextricably related to ques- tions of access to care. A major health care initiative in this period, the 1988 Medicare Catastrophic Coverage Act, was designed to improve the access by the elderly to long-term care. The measure was repealed under pressure from the elderly, who objected to the self- financing of the program through pre- miums and increased personal income tax. The passage of this bill reflected a bipartisan recognition of the linkage between problems of cost and access, but its subsequent demise revealed the limits of incremental change and pointed toward the need for a more fundamental restructuring of the American health care system.
The retrenchment of federal financing of existing programs and the relative inaction in addressing prob- lems of health care costs and access encouraged states to think about initi- ating their own health care reform. Until 1988, the only successful state- level health insurance model was that of Hawaii, which combined mandato- ry employer-based coverage with cost containment. By 1992, Massachusetts, Minnesota, Vermont and Florida had enacted (though not yet implemented) health care legislation; Oregon also proposed the rationing of certain Medicaid benefits. This state-level activity bolstered confidence in the idea that a national health insurance system could develop from sub- national initiatives, as it had in Canada, and that such initiatives could allow states to experiment with different types of reform, from man- aged care to single-payer plans. But the problems surrounding state action and the difficulty of reaching consensus in state legislatures highlighted the limits of state-led reform in the US, and the dangers of a ”œcrazy quilt” approach to health care (unlike the coor- dinated Canadian system) in the absence of a clear fed- eral policy direction.
In 1991, Democrat Harris Wofford’s upset victory over former attorney-gen- eral Richard Thornburgh in the Pennsylvania Senate race revealed the emerging political stakes of health care reform as a national issue on the domestic agenda. This also showed the depth of dissatisfaction among voters with the perceived inaction of the administration of the first George Bush on the issue. In a recession-wracked economy, working Americans feared for their health care benefits. These fears were intimately tied to concerns about the future viability of the American health care system. The hard-to-define but politically powerful American ”œmiddle class” seemed worried that their access to affordable health insur- ance was in jeopardy, and were appre- hensive about the future of the health care system. The medical lobby began to raise concerns about the problems of access to care, in particular the burden of caring for the uninsured and the lim- its imposed on their practices by third- party insurers. Once a bulwark against government intervention, the American Medical Association now endorsed a ”œpublic-private partnership” that would guarantee universal access while preserving the freedom of the medical profession in the health care market. Big business, saddled with a major portion of the American health bill, was increasingly frustrated by the seemingly uncontrollable increase in health care costs and became another unlikely proponent of government reg- ulation.
During the 1992 election cam- paign, health care reform surged to the centre of the domestic political agenda in the United States. President George H.W. Bush seemed incapable of allaying fears about the economic future of the United States, and of devising a reasonable scenario for health care reform. By contrast, the ”œhealth care crisis” became one of the oft-repeated buzzwords of the success- ful Clinton campaign that, along with ”œthe economy, stupid,” captured the attention of a recession-weary public open to the bold rhetoric of change.
This rhetoric was in evidence on September 22, 1993, as President Clinton delivered an emotional plea before Congress about the urgent need for health care reform in the United States. Clinton’s address reflected the powerful momentum of the health care reform issue, which had helped propel the Democratic Party to the White House. But, like Truman’s and Kennedy’s, the forcefulness of his deliv- ery also reflected the offensive strategy he needed to implement in order to raise public engagement and to face the substantial open hostility of powerful lobbies and their congressional allies.
As the Clinton administration began to tackle health care reform through a Task Force chaired by the First Lady, Hillary Clinton, several alternatives were already being dis- cussed in policy circles. Interest in the Canadian health care system and its ability to balance cost control and access to care led to suggestions for a single-payer government-financed health insurance system supported by influential health care experts, con- sumer lobby groups, union organiza- tions, and progressive Democrats. At the other extreme were Republican proposals for tax credits, vouchers and medical savings accounts. In between were suggestions for expanding the existing Medicare model to other groups in society as well as a number of variations on mandating employer health insurance.
How did Canada become an unwit- ting player in the debate over health care reform in the United States? Essentially, Canada was not unfamiliar to Americans, and propo- nents of national health insurance had taken an interest in the Canadian expe- rience since the 1970s (even Senator Kennedy had been a fan). Canada was attracting renewed attention as the debate for health care reform heated up in the 1990s, and as the search for solu- tions focused on issues of cost and access. Advocates of the Canadian model pointed out that a single-payer system could reap substantial savings in the overall costs of health care, while at the same time guaranteeing universal access to comprehensive ben- efits. A widely cited 1991 report by the United States General Accounting Office projected that such an arrange- ment could save the United States bil- lions of dollars. Other studies went further to suggest cost savings on administrative waste, malpractice, hos- pital budgets and fee schedules.
Detractors pounced on Canadian health care to demonstrate the impossibility of single-payer system. Their estimates showed that total costs could actually increase and, ominously, that there was an inevitable trade-off between quality and access. Stories abounded associating the ”œrationing” of health care and ”œqueuing” for treat- ment, with arbitrary government con- trol of health care resources and the constraints this imposed on freedom of choice. Media coverage in the US increasingly focused on the shortage of high-technology equipment, waiting lists for surgery, and overcrowding in hospitals. In addition, the Canadian medical community was accused of free-loading off the United States for research, innovative procedures and medical technology. While these attacks against the quality of Canadian health care suffered from the vice of extrapolating apocalyptic scenarios from anecdotal evidence, they ended up having considerable resonance in the US (and became familiar in Canada, as conservative voices on this side of the border took up their claims).
Beyond portraying the Canadian model as undesirable, there was consid- erable effort to discount it as unfeasible due to the ”œfundamental” differences between Canada and the United States. In an ironic twist, just as the right in Canada became more pro-American than ever before, arguments about the incompatibility of Canadian and American values became part of the conservative firing squad in the US.
Several influential voices continued to endorse the Canadian model, substantial numbers of Democrats in the House of Representatives supported a single-payer health insurance bill, and single-payer initiatives began to be dis- cussed at the state level. Nevertheless, it was apparent that the single-payer health care was not about to be part of the administration’s reform package.
The Health Security Plan, which emerged in 1993, represented a depar- ture from the basic social insurance precedent of the existing Medicare pro- gram. The emphasis was on universal coverage through employer mandates, and a mechanism for cost control through ”œmanaged competition” in health insurance markets; namely, gov- ernment regulation of private insurers through regionally based ”health alliances.” The proposal thus embraced government interven-ion in health care while retain- ing the legitimacy of private markets in health insurance.
But the Clinton compromise, aimed at forging a middle path through the public regulation of health insurance markets, failed to rally enough support from proponents of reform. At the same time, it faced considerable opposition from powerful groups with vested interests in maintaining the profitable status quo. Insurance lobbies, in particular, waged effective public campaigns against government involvement in health care. Within Congress, the administration faced opposition not only from Republican opponents but also from within the Democratic caucus. Widespread public confusion ensued, heightened by the complex details of the President’s health plan, the spectacle of warring factions on Capitol Hill, and the doomsday prophecies of its opponents. The plan finally died an ignoble death in September 1994 when, even with a Democratic majority, Senate majority leader George Mitchell was unable to ensure passage of a last-ditch compro- mise bill.
Much has been written about the ”œboomerang” effect of this health care debacle and the rise of the radical right in the United States; as the Democrats lost their majority in the Congress in the 1994 mid-term elections, Clinton would be saddled with this burden for the rest of his tenure in office, making health care reform a ”œno-go” zone, despite the per- sistent problems of cost and access. Indeed, some critics have suggested that Clinton’s welfare reform measures of 1997 worsened the health care situ- ation, as Medicaid eligibility was trans- ferred to the states. This would be alleviated to some extent by the intro- duction of the State Children’s Health Insurance Program (SCHIP), which provided matching federal funds for states to provide Medicaid coverage for children whose families did not quali- fy for welfare.
While the election of George W. Bush may have put the quest for uni- versal access to care on hold, his administration gave birth to an impor- tant addition to Medicare. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 added prescription drug coverage to Medicare benefits, through private insurers and HMOs. A hotly debated measure, it pit- ted Democrats against Republicans in both houses of Congress, and turned out to be substantially more expensive to implement than had been estimat- ed. President Bush also signed into law incentives for tax-sheltered medical savings accounts earmarked for med- ical expenses, which were widely criti- cized in the health policy community. His final legacy was the most contro- versial: the 2007 presidential veto of a bipartisan measure to expand the SCHIP. Since its inception, the SCHIP had spread like wildfire, extending health coverage to millions of chil- dren, and it made Medicaid the fastest growing social program in the US. This expansion would have increased spending and allowed millions more children to qualify for the program.
It was no coincidence that Barack Obama, the charismatic young sen- ator whose bid for the Democratic presidential nomination was centred on children and families, would make SCHIP expansion a focal point of his domestic policy plat- form. But Obama was eclipsed on the health care front by his main rival, Senator Hillary Clinton who, despite carrying the baggage of ”œHillarycare,” was determined to highlight health care on the electoral agenda.
Her efforts were helped by the deteriorating economic cli- mate in the US, with health care costs soaring, uninsured num- bers rising, and even middle- income Americans worried about being able to afford health care. Moving away from employer mandates " the hallmark of the 1993 plan " Senator Clinton focused on individual mandates that would require all Americans to be insured in one form or another.
The plan for individual mandates came out of the realization that some kind of legal obligation would have to be in place to compel universal cover- age. It was also bolstered by the demonstration effect of a state-led ini- tiative. The Massachusetts Health Care Reform Plan of 2006 has required state residents to carry health insurance, and forced employers to offer coverage to their workers or pay an assessment fee. This effort was directly aimed at reducing the number of uninsured and lowering the cost drain on the state’s health care system.
Despite the divisive primary bat- tles among the Democratic con- tenders on a wide array of questions, the leading candidates " Obama and Clinton " agreed that health care required immediate attention from the federal government. Health care reform retained its high profile as Barack Obama and Joe Biden cam- paigned throughout the fall of 2008, and it was identified a front-burner issue for the new administration almost as soon the Obama family moved into the White House.
The twin framing of health care reform in terms of both access and cost control was a deft strategy to capture the urgency of the issue in the context of the economic crisis and, crucially, to court support from both Democrats and Republicans in the Congress. The other adroit move was to open up policy dis- cussions and engage with stakeholders, instead of the relatively closed approach that doomed Hillary Clinton’s 1993 task force. And the attempt to inject strong leadership through the nomination of former Senate majority leader Tom Daschle was hailed as perhaps the most promising initiative of all " except that, within weeks, he was forced to withdraw due to tax irregularities.
Obama also tried to distance himself from Bill Clinton’s top-down approach by asking the Congress to take the lead in writing the legislation this time around. For new age management types, this may translate into strategies to ”œinvest” part- ners in a change process, but in the case of controversial reform before a divided legislature, it turned out to spell old-fash- ioned political trouble. Without a central script, Democrats began to devise com- peting strategies, while Republicans and their allies, sensing a policy vacuum and a political opportunity, went to work in redefining health care reform " and the President himself " in the most negative terms possible.
By the time Obama took his place in the parade of presidential health care reform addresses to the Congress, his message had firmed up considerably: ”œI am not the first president to take up this cause, but I am determined to be the last.” Despite the eloquence of language and passion of delivery, Obama’s insis- tence on the basic elements of reform " insurance regulation, cost control meas- ures, individual mandates " was crowded out by the deep divisions over the so-called public option. For supporters the public option is essential, because it would serve as a last-resort option for those who could not otherwise find or afford insurance coverage. For detrac- tors, it represents, yet again, a wedge of socialized medicine, on the one hand, and unfair competition, on the other.
Here again, Canada entered the health care reform debate in the US, but this time the stakes and the sit- uation had changed. In 1993, the sin- gle-payer model had been used by opponents and supporters of health reforma like; in 2009, the targets were much more precise and the coverage of Canada almost entirely negative. Parallels were made between the public option and the deficiencies of the Canadian public insurance systems, while infamous ads featuring a Canadian ”œsurvivor” of the system and talk radio debates over ”œdeath panels” tried to illustrate the havoc that could be wreaked by constraining consumer choice and access. Although these attacks were as misleading as in the past, they resonated more powerfully because the debate over health care on this side of the border had itself changed, leading to a noticeable ero- sion of confidence among some Canadians.
Regardless of whether the public option survives the journey through Capitol Hill, the stakes of health reform will continue to rise through the Obama administration’s first term in office. As different versions of health care reform bills come up for bipartisan review, the pressure toward even more compromise will intensify. Should Obama give in to this pressure, he may not be able to live up to his promise to be the ”œlast” presi- dent to take up the health care reform cause. If the legislation that emerges from the Congress does not stress universal coverage and considerable cost control, then Obama will leave a great deal on the plate of his successors. If, however, his leadership takes the political risk of forcing a Democratic consensus to push through a vote, then he leaves himself exposed to a Republican backlash, ”œblue dog” alien- ation, and the further polarization of American party politics. He also risks, like others before him, having the health care issue become a ”œstraw man” for a wider and deeper opposition to his political agenda.
In 1962, John F. Kennedy was adamant that health care reform was ”œlong overdue.” A generation later, Americans are still struggling to find a workable solution for health care chal- lenges. If the lessons of the past are a pro- logue to the future, it will take more thanawillingnessoftheexecutiveanda majority of the legislature to move for- ward on these controversial issues: trans- formative health care reform needs a powerful president, secure control of Congress, and a political climate that can attenuate partisan discord. By all accounts, the United States is not quite there yet.