CHAPTER 1

FederalismCreates HealthPolicy

Friends in my small town know that I have been involvedin national health care reform efforts as well as those in our home state ofMassachusetts. When conversation at the local pub turns to health care,they'll ask me questions. Because I'm a political scientist, not a medicaldoctor, I don't get pelted with questions everywhere I go, so I welcome theopportunity to respond. I only wish that there were better answers.

Jack, a salesman for a high-tech company, thought that the Massachusettshealth care reform would allow him to cover his 24-year-old daughter,Meghan, on his employer's health plan. So why did his company tell himthat she wasn't covered? I try to explain that larger companies are exemptfrom state insurance regulations because they self-insure; those businessesuse insurance companies like Blue Cross or Aetna only to administer theirclaims. It is confusing because the same insurance companies actually provideinsurance to small businesses, and in those cases they are subject to stateregulations. Eyes glaze over, and we quickly return to the fortunes of theBoston Red Sox. Meanwhile, Meghan remained uninsured.

Matthew runs a small financial consulting business. Because of double-digithealth insurance premium increases, coverage for him, his wife, andtheir three boys takes a big bite out of their budget. He wanted to knowwhether health care reform would offer more reasonably priced health plans.A while back, I had told him that help was on the way: Massachusetts had justcreated the Health Care Connector, which was intended to provide a choiceof plans at lower prices, at least in theory. The Connector did expand coverageto lower-income individuals and families, but it did not lower the costof insurance for people like Matt and his family. Perhaps I should have toldhim to hold tight for federal small business tax credits? Or let him know thathealth care exchanges created by national reform may offer a better solutionsoon? But at the risk of losing credibility and a good tennis partner, I turnback to discussing the ball game.

As the country geared up for national health care reform, I traveled fromstate to state talking about reform efforts in Massachusetts. Everywhere Iwent, I shared my excitement over the obvious progress in coverage. Morethan 98 percent of people in Massachusetts have health insurance, by far thehighest coverage rate in the nation. Enacted in 2006, state reform added apatchwork of new programs and regulations that built on previous expansionefforts. Over 300,000 previously uninsured individuals now have healthinsurance coverage and can sleep better at night. But the program is complexand difficult to comprehend—even for policy wonks—and it was notdesigned to address persistently rising health care costs.

National health care reform was signed into law by President Obama onMarch 23, 2010. The Patient Protection and Affordable Care Act (ACA) hasmuch in common with the Massachusetts effort. It holds similar promise—andsuffers from similar limitations—when it comes to expanding healthcare coverage to the uninsured. More of the uninsured will be covered, butcoverage will be complex to negotiate and cost containment will be just asdifficult. Despite its shortcomings, ACA represents a significant political triumphafter a series of failed efforts that date back to the Truman administration.1 Under national guidelines, reform will be administered in largepart by the states through existing health plans, insurers, hospitals, doctors,and other health care providers. States will be critical players in implementingreform and in establishing state-based health care exchanges. Applyingnational exchange rules to health systems that vary widely from state to statewill be a tremendous challenge.

The ACA barely passed Congress, along partisan lines. The Democratsstruggled to hold on to more conservative members of their party and usedparliamentary maneuvers to avert defeat by filibuster in the Senate. TheDemocrats in the Senate did not even have the votes to include a relativelymodest "public option" insurance plan to help balance private sector offeringsand force down administrative costs. However, it is unlikely that anythingmore progressive could have passed. In fact, after the 2010 election,when the Republicans gained control of the House of Representatives andthe conservative Tea Party adherents attacked the ACA as the centerpiece oftheir "revolution," the Democrats were fighting repeal.

Universal or near universal coverage has been referred to as the unfinishedbusiness of the New Deal. The New Deal represented a major realignmentof the political parties in favor of social welfare policy, and efforts toimprove, modify, and build on it have been a subject of political debate fordecades. In this case, the advantage went to the Democrats. The election ofRonald Reagan in the 1980s represented a realignment against social welfarepolicy expansion and the national agenda of the Great Society and War onPoverty programs of the 1960s and 1970s. In the 1990s, Speaker of the HouseNewt Gingrich took the Reagan revolution one step further, taking aim at theNew Deal with efforts to privatize portions of Social Security and Medicare.In this case, the Republicans had the advantage. Today the proper role ofgovernment and its role in health care reform is still hotly debated. The successor failure of the implementation of the ACA may well determine whichpolitical party holds sway over the next several decades.

Conservative opposition to the ACA represented not only an attack on aparticular piece of legislation but an ongoing fight about the legitimacy of thegovernment's efforts to ensure health care security for citizens. While repealpassed the House several times in 2012, the Democrats, who controlled theSenate, protected the law. Even if the Senate were controlled by the Republicans,it would still take sixty votes even to end the debate and have a vote onrepeal. The American political system is structured to make passing legislationhard, which makes passing...