This indispensable guide to the Affordable Care Act, our new national health care law, lends an insider’s deep understanding of policy to a lively and absorbing account of the extraordinary—and extraordinarily ambitious—legislative effort to reform the nation’s health care system. Dr. John E. McDonough, DPH, a health policy expert who served as an advisor to the late Senator Edward Kennedy, provides a vivid picture of the intense effort required to bring this legislation into law. McDonough clearly explains the ACA’s inner workings, revealing the rich landscape of the issues, policies, and controversies embedded in the law yet unknown to most Americans. In his account of these historic events, McDonough takes us through the process from the 2008 presidential campaign to the moment in 2010 when President Obama signed the bill into law. At a time when the nation is taking a second look at the ACA, Inside National Health Reform provides the essential information for Americans to make informed judgments about this landmark law.
Inside National Health Reform
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Introduction - A Meeting in Minnesota
I joined about forty persons in a nondescript conference room somewhere near Saint Paul, Minnesota, in late April 2008. Most were veterans of the 1993-94 national health reform campaign conducted during the first two years of President Bill Clinton's administration; a smattering of folks such as me, who would be involved in the next round, were also in attendance. That effort began with fanfare and high hopes in January 1993 when the president named first lady Hillary Rodham Clinton to lead a five-hundred-person task force to develop comprehensive health reform legislation. It ended in utter failure in the fall of 1994, when neither the House nor the Senate could agree on even a slender package of incremental reforms. The failure was one of many contributing factors in the loss of Democratic control of the Senate and House of Representatives in the November 1994 midterm elections.
By late April 2008, Senator John McCain had already clinched the Republican presidential nomination more than a month earlier, and Democratic senators Barack Obama and Hillary Clinton were still more than a month from bringing closure to their state-by-state trench warfare for the Democratic nomination. There were still traces of snow on the ground to match the chilly, wet Minnesota weather.
Sitting around a hollow-squared table were Republicans and Democrats, most of whom had been staffers on key House and Senate committees, aides to key senators and House members, Clinton administration officials, and an assortment of others who had watched the catastrophe unfold from perches inside or outside the government. They had come at the invitation of former Minnesota senator Dave Durenberger, a Republican moderate who left the Senate in 1994; he was the only member of his caucus with seats on both Senate committees that had been key to health reform's fate (Senate Finance and Senate Labor and Human Resources, later changed to Health, Education, Labor and Pensions, or HELP). Also corralling us was Len Nichols, a health economist with a sweet Arkansas drawl who was a former Clinton administration budget official using his perch at the New America Foundation to help advance the next round of national health reform any and every way he could.
Nearly everyone around the table believed an effort to achieve comprehensive health reform would happen if the Democrats won the White House in November. No one thought Democrats would win sixty or more seats in the U.S. Senate, which would enable them to proceed without Republican support. All three leading Democratic candidates (Obama, Clinton, and former senator John Edwards) had produced similar reform plans. McCain also produced a reform plan, which differed sharply from Democratic designs.
Many of these veterans had painful memories going back further than 1993-94. In July 1988, in a bipartisan celebration, President Ronald Reagan signed into law the Medicare Catastrophic Coverage Act, the largest expansion of Medicare benefits since their inception in 1965. The new law sought to fill gaping holes in Medicare, including coverage of outpatient prescription drugs, and it had been approved with overwhelming bipartisan support. Less than eighteen months later, facing a rebellion from senior citizens angry about their newly required contributions to pay for the program, President George H.W. Bush signed into law a complete repeal of the 1988 act.
Agreement that a reform effort would be mounted did not imply confidence that reform would succeed. Many, especially the Republicans in the room, expected a repeat of prior defeats. If reform somehow passed, some even predicted a repeat of the 1988-89 repeal experience with Medicare Catastrophic. Attendees had gobs of interesting comments and advice:
Conference organizer Nichols observed: "The single greatest impediment is the belief that it can't be done."
David Nexon, who in 1993 was a key health staffer for Senator Edward M. Kennedy's Labor and Human Resources Committee and who in 2008 was working at AdvaMed, the trade association for the medical-device industry, warned: "It can never happen unless everyone moves fast and takes advantage of momentum. Get it done early and with a real sense of urgency."
David Broder, the Washington Post columnist and coauthor of The System, the definitive account of the Clinton health reform fiasco, recalled: "Newt Gingrich, in a brilliant way, as he saw Democrats make health care a defining issue, realized if he could create defeat, the disillusionment would benefit Republicans in the 1994 elections."
Nick Littlefield, the former staff director in 1993 for Senator Kennedy's committee and now a lawyer representing pharmaceutical and biotechnology clients, noted: "Everyone sees things differently; everyone sees things through their own experiences. We can't get this done unless we talk with each other."
Chip Kahn, who in 1993 was a key executive at the Health Insurance Association of America, a leading opponent of the Clinton plan, and by 2008 was the chief of the Federation of American Hospitals, a national association of for-profit hospitals, observed: "I'll join any coalition, but they are long on principles and not good at solutions. Everyone protects their little corner. And we're not always honest with each other. This is a 50-50 nation. And most reform proposals represent different worldviews."
In 1993, Christine Ferguson was the key health aide for Senator John Chafee (R-RI), the leading Republican Senate moderate whose alternative plan featured a mandate on individuals to purchase health insurance. Though rejected at that time by Democrats, it bears striking resemblance to the 2010 health reform law approved by Democrats with zero Republican votes. She noted: "Our key problem is that we have not defined our goals. What are we trying to achieve? Some say we want high-quality care that is accessible and affordable. Now others say it's more about cost containment."
John Rother, in both reform epochs a senior leader at AARP, the massive senior citizens' lobby, reflected on the 1989 failure to sustain the Medicare Catastrophic Coverage Act: "We could not overcome the barrier of explaining it to the American public. It was an insiders' game until the momentum gathered for repeal, and by then it was too late."
Congressman Jim Cooper (D-TN), the only elected official in the room, was the leading House Democrat who opposed the Clinton plan: "I feel like a cicada-I come out every fifteen years and hope it feels good. A lot has happened over the past fifteen years. Congress has dumbed down-so much so that I have to explain to members the difference between Medicare and Medicaid. I want change to happen. Quick or not, I want it to be inevitable. The last time got a whole lot of nothing. The Wyden-Bennett bill has the best chance right now. It's controversial stuff, but if there is a bipartisan center, it's this bill."
In the end, Durenberger and Nichols took the comments and cooked up "ten commandments" for presidential leadership on health care reform:
ò Exercise political will. Presidential leadership is critical.
ò Communicate to the public. The vision, principles, and goals of health reform must be understood.
ò Choose the right advisors and surrogates. They should be those who have your trust and the trust of the public.
ò Empower the Congress. Delegate to Congress the details of legislation.
ò Manage partisanship. Focus on messages and policies that bring people together.
ò Calibrate the timing. Use all deliberate speed in moving the issue to Congress to begin work.
ò Manage stakeholders. Keep them in the circle (at the table) but not at the center.
ò Involve the states. Recognize the steps that the states have taken while acknowledging their limitations.
ò Determine the scope. Decide whether it is better to go after a "big bang" bill linking coverage, cost, and quality or a "baby bang" bill that may be easier to pass.
ò Negotiate procedural roadblocks. Congressional leaders have to agree on a process before legislative work begins.
I noticed a different theme in sidebar conversations. Republicans would comment with bitterness: "Those Democrats never talked with us, even with the moderates. There was a deal to be made, and they blew it because they wouldn't talk with us and wouldn't listen." Democrats were equally sharp: "These Republicans never wanted a deal. Every time we approached them on their terms, they changed the terms of the deal." Fourteen years later, the wounds were still open and hurting, the disagreements gaping, and a sense of common vision nowhere to be found. I left Saint Paul more disquieted than reassured.
Barack Obama was the eighth U.S. president to undertake a serious effort to achieve some form of comprehensive national health reform, following Franklin Roosevelt, Harry Truman, John Kennedy, Lyndon Johnson, Richard Nixon, Jimmy Carter, and Bill Clinton. Of those, only Lyndon Johnson succeeded, with the enactment of legislation in 1965 creating Medicare and Medicaid. That landmark was the conclusion of a thirteen-year effort to create national health insurance for senior citizens, and its passage proved to be the start, only the opening chapter, in an ongoing process to expand, modernize, stabilize, finance, and reorganize the U.S. health care system.
Similarly, President Obama's signing of the Affordable Care Act (ACA) in March 2010 ended seventy-five years of efforts by U.S. presidents and Congresses to establish a national health insurance framework. As with Medicare and Medicaid, enactment of the new law is only chapter 1, with much more to follow. There will be controversy, threats, financial stress, modifications, deletions, improvements, and limits in many directions. Many Americans' lives will be saved and improved, and more than a few burdened. There will be surprises aplenty, welcome and distressing. At the heart of it will be the perpetual effort to shape and reshape a health care system to meet the values and expectations of a diverse and divided public. The ACA is a landmark law, on a par with the Social Security Act of 1935 and the Medicare and Medicaid law in 1965. Whether one likes or hates it, it is helpful to understand it.
I wrote this book to help the American public understand what happened, how it happened, and why it happened in the twenty-two months between the start of the congressional health reform process in June 2008 and the signing of the health reform laws in late March 2010-not the implementation process, which is fast-moving and constantly changing. I want to help people understand not just the issue, the need, the controversies, and the cause but also the Affordable Care Act itself, as a law, as a federal statute. Most Americans I meet can name one or several aspects of the law, though few have an appreciation for the scope, complexity, and ambition of the whole. When I explain the ACA to individuals or groups, I begin by outlining and explaining the law's ten titles to give a sense of the statute's architecture and purpose. I usually find interest and appreciation for the opportunity to understand it better-what it is, what it does, why it does it, and how it came to be. There is a lot in the ACA, and a lot that is surprising. The premise of this book is that the statute matters and demands understanding.
A note on labeling: I refer to the final health reform law as the Affordable Care Act (ACA), though even this requires explanation. On December 24, 2009, and March 21, 2010, respectively, the U.S. Senate and the House of Representatives enacted the Patient Protection and Affordable Care Act (PPACA), which President Obama signed on March 23; on March 26, the Senate and House approved the Health Care and Education Reconciliation Act (HCERA), making numerous significant changes to PPACA, which the president signed on March 30. In this book, the term ACA refers to the final health reform law as amended by the Reconciliation Act, and PPACA refers to the original legislation and statute, unamended by the HCERA.
I bring an assortment of experiences to the task of writing this book. Between June 2008 and January 2010, I served on the staff of the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), one of two Senate committees with principal health policy jurisdiction. My job title was senior advisor on national health reform, and I was a small part of an enormous team of mostly anonymous Senate, House, and administration staffers who worked long hours to develop, refine, and push reform legislation through the challenging Capitol Hill process. I joined the HELP Committee at the request of Massachusetts senator Edward M. Kennedy, who chaired the committee, to help him on the major legislative priority of his career and life. After his death in August 2009, I worked for Iowa senator Tom Harkin, who succeeded him as chair.
Prior to working in Washington DC, I was the executive director of Health Care For All, a Massachusetts consumer health advocacy organization. In that role, I participated in the conception, birth, infancy, and toddlerhood of the Massachusetts health reform program, which became law in 2006 with the support of the Republican governor, Mitt Romney; the Republican president, George W. Bush; and massive Democratic majorities in the state Senate and House of Representatives. More than any of us imagined at the time, Massachusetts reform became an essential template for federal reform. Before that, I worked for five years as an associate professor at Brandeis University's Heller School, and prior to that I served for thirteen years as a member of the Massachusetts House of Representatives, representing an inner-city Boston district. During my time in the state House, I became deeply engaged in health policy and bolstered my interest by earning a master's degree in public administration from the John F. Kennedy School of Government at Harvard University and a doctorate in public health from the School of Public Health at the University of Michigan.
I came to Washington DC a veteran of state health reform. Specifically, I was involved in three major Massachusetts reform drives: in 1988, when Michael Dukakis was governor (the law was passed, never fully implemented, and ultimately repealed); in 1996, when I cochaired the state legislature's Health Care Committee; and in the 2006 Romney effort. From a distance, I watched and supported the ill-fated effort in 1993-94. I took to Washington two assumptions about process: First, every major health reform campaign takes much more time and political capital than anyone imagines possible-far beyond most people's patience. Second, being in any major health reform effort, state or national, feels like barreling down a mountain on a creaky bus on a dirt road with no guard rails, the possibility of crashing always at hand. On both counts, the 2008-10 process did not disappoint.
I bring to the task of writing this book the experience of having seen the ACA develop and evolve from inside Capitol Hill, plus the experience of watching many other reform campaigns win and lose, especially in Massachusetts. This book is not intended as a definitive narrative history of the ACA; rather, I seek explain the law and to provide a context for understanding how it came to be. Informed readers will notice gaps in many juicy episodes of the health reform process; that is because I tell the legislative process story principally to inform the main part of this book, the chapters on each of the ACA's ten titles. This book also is not meant to be the story of the U.S. health justice movement, which has worked for decades across the nation to address the inequities in our health care system. Also, some will find the process within the House of Representatives not as extensively described as in the Senate. To this, I plead guilty, first, because I observed the Senate more closely on a daily basis, and second, because-unfairly but true-the basis of the ACA is much more the version that was developed in the Senate as PPACA.
The book is organized into two main sections:
The first section, Preludes and Process, sets the context for reform and describes the legislative process leading to the law's signing in March 2010. Chapter 1 provides an overview of prior health reform efforts and key U.S. health policy developments since the demise of the Clinton effort. Chapter 2 describes the seminal 2006 Massachusetts reform and discusses two roads not taken in 2009-10. Chapter 3 describes health reform efforts in 2007 and 2008-outside Capitol Hill-including activities in the presidential campaigns of Barack Obama, Hillary Clinton, John Edwards, and John McCain, plus efforts by outside groups to lay the foundation for reform. Chapter 4 describes the legislative process leading to reform between June 2008 and March 2010, with emphasis on the procedural elements most important to understanding the final statute.
The second section, Policies, includes ten chapters, one for each of the ten titles of the ACA. Each chapter includes descriptions of key sections plus information to understand the structure, development, and significance of key elements within each title. The ten titles are:
I. Quality, Affordable Health Care for All Americans (coverage)
II. The Role of Public Programs (Medicaid and the Children's Health Insurance Program)
III. Improving the Quality and Efficiency of Health Care (Medicare and more)
IV. Prevention of Chronic Disease and Improving Public Health
V. Health Care Workforce
VI. Transparency and Program Integrity
VII. Improving Access to Innovative Medical Therapies (biopharmaceutical similars)
VIII. Community Living Assistance Services and Supports (CLASS Act)
IX. Revenue Provisions
X. Strengthening Quality, Affordable Health Care for All Americans (the "Manager's Amendment"), plus the Health Care and Education Reconciliation ("sidecar") Act.
Part II is the spine of this book. The ACA can best be understood by taking a deep dive into its structure and content, and that requires exploring each of the ten titles. The law touches nearly every aspect of the U.S. health care system-so exploring the law means exploring the U.S. system circa 2010. Some readers will find the detailed view to be revealing and engaging, while others may find section descriptions challenging. I hope all readers will emerge with a deeper appreciation of the actual stuff of the law itself.
The final chapter includes conclusions and observations on the process and substance of U.S. health reform in 2010.
Three sets of sources inform this book. First, during my time in the Senate, I kept extensive notes and materials accumulated along the way, as well as a journal. Second, in writing this book, I conducted more than 125 interviews with congressional and administration staffers, plus participants from key stakeholder organizations. Finally, I relied on public documents, as well as journalistic and other accounts from cited sources. All congressional and administration staff comments were provided on a "background" basis (that is, anonymously). In cases where I rely on staff accounts of key events and activities, I used the information only when verified by at least one other source.
A word about author bias-I can't deny it. I was baptized a Democrat and moved to Washington DC to help Senator Kennedy achieve his lifetime mission of universal health care, and I worked with Democratic members and staffers to help him achieve that ambition. I have strived to present positive, negative, and neutral information important to understanding and making judgments about the ACA. More than anything else, I hope this book will help readers achieve a good understanding of this remarkable law. And because this is not a mystery novel, I lay out my conclusions here with details in the last chapter. The first five conclusions glance back at the legislative process and substance of the ACA; the second five look to the future. These are the looking-backward conclusions:
ò The ACA is a landmark law and a landmark in U.S. health and social welfare policy. The statute is replete with numerous smaller and significant landmarks. It is an achievement in the realm of health policy-and it is also an achievement in social policy and in distributive justice-leveling the huge imbalance between classes in our society.
ò The ACA was an accomplishment of individuals and also of a national movement, the health justice movement. Though this book focuses on the work of individuals and organizations based in Washington DC, the ACA could not have happened without vigorous, longstanding, and passionate efforts by hundreds of thousands of Americans-including many movement participants who reject the ACA as insufficient. In the process, the ACA became, and continues to be, the flashpoint between two incompatible movements, the health justice and the tea party movements.
ò Bipartisanship was seriously and sincerely pursued by a few leaders from both parties and was not possible. The differences were too stark, the political bases too alienated from each other, and the stakes too high for a deal that could have satisfied enough of the partisans on both sides.
ò Compromises, negotiations, trades, and deals were necessary, not scandalous. They are the principal form of currency in Washington DC and indeed in every democratic legislative assembly on the planet. It is how legislative business gets done.
ò The 2008-10 health reform debate was a debate about values. It was also about money, politics, media, culture, and more, but most of all, it was and will continue to be about values.
GTThese conclusions look forward:
ò Like Social Security, Medicare, and Medicaid, the ACA will be revisited and revised repeatedly for years to come. Congress will revisit the law in 2011 and 2012 and would have done so regardless of the 2010 midterm election results, in which Republicans won control of the U.S. House of Representatives.
ò The affordability of health insurance, and the affordability of health insurance policies for new exchange enrollees, will be two key challenges-over the short, medium, and long term-and especially long term. (Exchange plans are discussed in chapter 5.) To achieve deficit-reduction targets for the second decade of the law, between 2020 and 2029, changes were made to affordability provisions that will make health insurance policies unaffordable for many of those in need of subsidies. Fixing these subsidies to ease the harm will lower the currently favorable deficit projections for the second decade of the law.
ò The ACA's fiscal future is as uncertain as its affordability guarantees-and it is tied to the nation's economic outlook. This uncertainty swings in both directions: in other words, there is a real possibility that the ACA will perform better than expected. For example, had the Clinton's reform achieved passage in 1994, implementation would have benefited from two huge and unpredicted phenomena: first, record low medical inflation in the mid- to late 1990s, and second, the immense economic boom of the late 1990s. Also, the track record over thirty years shows that major health reforms tend to perform better than predicted by the Congressional Budget Office.
ò The ACA has the potential to do more to meet the health needs of America's racial and ethnic minorities, and more to reduce racial and ethnic health disparities, than any other law in living memory. Among the many ways the ACA can be described is as a landmark civil rights law: "the civil rights act of the 21st century," in the words of Representative James Clyburn (D-SC).
ò The implementation of this law is already proving to be among the most challenging implementations of a federal law in many decades. Stay tuned.
A word about congressional staff-the men and women who work on Capitol Hill or in states and districts on behalf of members. So much gets written about the senators and representatives and the Congress itself. Not much gets said about the thousand employees of Congress outside Washington DC or the twenty-nine thousand who inhabit the Capitol and the six legislative office buildings, three for the Senate (Russell, Dirksen, Hart) and three for the House (Rayburn, Longworth, Cannon), connected by a web of subway lines, subterranean passages and an array of cultures, norms, and everyday practices.2 A key part of the staffer's job is to be as anonymous as possible to the news media. So it was revealing for me, however briefly, to become a part of the congressional staff and to see their work up close.
In any occupational category, including congressional staff, workers populate a bell curve: there are the fantastics, the horribles, and the great middle. I left Washington DC deeply impressed with the commitment, talent, skill, and character of the many men and women who make their way to Capitol Hill to work in one of the most challenging legislative and political environments anywhere. This is a bipartisan observation-I have seen staff from both parties work incredibly long hours, seven days a week, constantly on call, sacrificing sleep and time with loved ones, to help achieve their bosses' goals and objectives because they believe in their bosses and those goals, in their political party, in their own skill and professionalism, and in the U.S governmental process, especially the legislative variety. Some work directly for members as aides or policy experts; some work for committees, on either the majority or the minority side; some work for the nonpartisan offices such as the legislative counsel or the Congressional Budget Office; some work in support capacities literally to make the trains run on time or feed other staff. Whether they are there for three months or three years or thirty years, it is an honorable place and calling to make part or all of a career.
At the risk of neglecting many, here are the names of some key staffers with whom I worked and watched and who played invaluable roles in making the ACA happen: Cybele Bjorklund, David Bowen, Mark Childress, Stephen Cha, Tony Clapsis, Brian Cohen, Debbie Curtis, Bill Dauster, Chris Dawe, David Dorsey, Jack Ebeler, Neleen Eisinger, Jim Esquea, Caroline Fichtenberg, Yvette Fontenot, Liz Fowler, Connie Garner, Andrew Garrett, Ches Garrison, Carolyn Gluck, Tim Gronniger, Andrea Harris, Ruth Katz, Cathy Koch, Tom Kraus, Jenelle Krishnamoorthy, Sarah Kuehl, Jacqueline Lampert, Kate Leone, Caya Lewis, Tamar Magarik Haro, Craig Martinez, Bill McConagha, Taryn Morrissey, Liz Murray, Michael Myers, Mary Naylor, Karen Nelson, Kavita Patel, Wendell Primus, Purva Rawal, Terry Roney, Stacey Sachs, Andy Schneider, David Schwartz, Naomi Seiler, Dan Smith, Topher Spiro, Russ Sullivan, Jeff Teitz, Michele Varnhagen, Kelley Whitener, Tim Westmoreland, and Portia Wu.
Finally, a word about Senator Edward M. Kennedy. From 1969, when he first called for universal health insurance in a speech at Boston City Hospital, he was the nation's leading, longest-lasting, and most determined advocate for national health reform. At times, he pushed as far to the left as possible, and at other points he defined the vital center, the political sweet spot where real change happens, to save and improve the lives of millions. His instincts and gut, more than anyone else's, helped to shape and define the agenda of the health justice movement for more than forty years. The staggering scope of his interests and passions, combined with his indelible ties to America's history, always helped to elevate the moral urgency and immediacy of the cause.
After Senator Kennedy's passing, his HELP Committee staff director, Michael Myers, defined the senator's most compelling gift. Everyone has heard the countercultural expression "The personal is political," he observed. Senator Kennedy proved the opposite, that "the political is personal." The senator never forgot or neglected the indispensible importance of personal relationships to political progress. The strong and personal bonds of affection he fashioned with partisans on all sides opened innumerable windows of opportunity for progressive change, small, medium, and large.
The senator played a role in the 2008-10 health reform process far different from what anyone had imagined it would be, most of all him. As the debate moved from generalities to specifics, this time he avoided the details he had always mastered better than any of his colleagues and stayed focused on the overall mission and the vital few strategic choices, such as implanting funding for health reform in President Obama's first budget proposal to Congress and leaving the door open for use of the budget reconciliation process. Just as Woody Allen observed that 90 percent of life is just showing up, so Senator Kennedy-even in the course of his fatal illness-always showed up when it mattered: in the Senate chamber in July 2008 for a crucial Medicare vote, at the Democratic National Convention in August 2008, at the first bipartisan meeting of senators on health reform in November 2008, at key confirmation hearings in early 2009, at the March 2009 White House Health Reform Summit, and so many more. When he could not show up anymore, his widow, Vicki Reggie Kennedy, always showed up in his stead to carry his torch. He always spread the same message: This is the moment. This time we will prevail.
There were many heroes in health reform between 2008 and 2010, inside and outside government, people who took enormous personal risks to achieve what they thought was right. They all walked in Senator Kennedy's footsteps and share the achievement with him. I am honored to dedicate this book to his memory and his legacy.