Why public support for health care overhaul faltered

Kaiser Health NewsJanuary 20, 2010 

WASHINGTON — As a candidate, Barack Obama promised to pass a health care plan with important benefits for average Americans For the typical family, costs would go down by as much as $2,500 annually. Adults wouldn't be required to buy insurance. No one but the wealthy would face higher taxes.

A year later, however, the health care proposals in Congress lack many of those easy-to-sell benefits, which became victims of the lengthy process of trying to win over wavering lawmakers, appeasing powerful special-interest groups and addressing concerns about the heavily burdened Treasury.

"There's nothing in it the average person could understand about why your costs would be lower," said Robert Blendon, a professor of health policy at Harvard's School of Public Health. "They don't even have good illustrations about how it would be cheaper. They did not find a way to save money for people with job-based insurance."

Today, the legislation is in serious trouble, lacking a crucial 60th vote in the Senate after Republican Scott Brown was elected to the Massachusetts seat once held by the late Edward Kennedy, a Democrat.

Certainly, attacks by the Republicans — as well as the Democrats' inability to articulate the benefits of the legislation clearly — are partly responsible for the measure's lack of popularity. So are crucial policy decisions that Democratic leaders made as they struggled to push the legislation through, according to experts of different ideological persuasions.

"Health reform is a really hard thing to do," said Jonathan Oberlander, an associate professor of social medicine at the University of North Carolina-Chapel Hill. "They did a lot right, strategically. But you can do everything right and still fail in health reform."

Here are some of the policy choices that experts say have hurt the bill's chances:

WHAT'S IN IT FOR ME?

For the majority of voters who get insurance through their employers, the downsides have became increasingly tangible while the promised benefits — lower costs among them — have seemed more nebulous. One reason: Democrats didn't want to be so tough on health care providers that they'd fight the legislation.

"The Democrats succeeded in doing reform without goring anyone's ox and the public has seen that for what it is: They are not substantially bringing costs down in the foreseeable time horizon," said Joel Cantor, the director of the Rutgers University Center for State Health Policy in New Brunswick, N.J.

To be sure, the Senate Democrats crafted a "Cadillac tax" on the highest-cost insurance plans for people with employer coverage. That was deemed necessary to help slow the growth of health-care costs and to help finance the plan. It means that some people with coverage could end up worse off, however.

Lawmakers incorporated tax credits to help small businesses afford coverage, but most of the bills' provisions are targeted at the more than 30 million Americans who lack coverage and the 17 million who buy insurance in the individual market. The bills would bar insurers from rejecting individuals with health problems and would guarantee that policies couldn't be canceled if enrollees got sick. However, such promises seem hypothetical for many people who already have jobs and insurance, the very constituency the Democrats need to succeed.

MEDICARE

The Democrats would finance a big chunk of the bill by slowing the growth of Medicare spending, which is probably inevitable, given the sheer size of the program.

In doing so, however, they've opened themselves up to charges that seniors would pay the price.

Democrats and the AARP, the powerful seniors' lobby, argue that the legislation wouldn't hurt older Americans and in fact would help them by lowering costs for prescription drugs and making other improvements. They also say that payment cuts to private Medicare Advantage plans are good policy because the plans cost more than traditional Medicare does.

Certainly, there are no easy ways to finance such a massive revamp.

"The choices are to take it out of existing health programs, increase taxes or reduce other spending," said Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush and is now a senior fellow at Project HOPE, an international health education foundation. "Those are three really unattractive options."

The Medicare reductions, however, have become targets for attack ads aired by opponents such as the 60 Plus Association, a conservative advocacy group, and America's Health Insurance Plans, the industry's major trade group.

The proposed reductions "made it easy to scare seniors" and are "responsible in significant measure for the opposition" to the bill, Oberlander said.

TAXES

The discussion of various taxes has confused and alarmed people, experts said.

To pay for a plan that's estimated to cost at least $900 billion over a decade, Democratic lawmakers, at various times, have considered levies, fines or penalties on high earners, medical-device makers, tanning salons, elective plastic surgery, drug companies, expensive health coverage, sugary sodas, people who refuse to get insurance and companies that don't provide coverage.

Many of the taxes have been dropped or scaled back. Others have been designed to pressure the health care system to operate more efficiently. However, the list of levies has fueled concerns that Americans, struggling with a severe economic slump, would have to pony up more for the taxman.

"The final bill will not have all those taxes in it," Blendon said, "but people hear about the tax on insurers, the tax on pharmaceuticals, the income tax — and they can't segregate it in their minds."

"People don't like taxes," said Leslie Norwalk, who was the acting administrator of the Centers for Medicare and Medicaid Services during the administration of President George W. Bush. "The electorate is trying to decide what it thinks about this health care stuff, sees the economy is in trouble and a lot of discussion about taxes, but isn't all that unhappy about their own health care."

DEAL-MAKING

Putting together complicated legislation is always messy, but the health care debate has been especially prone to distractions, setbacks, reversals and deal-making.

For months, Senate Democratic leaders searched for a compromise that would bring at least one Republican on board while trying not to lose liberal Democrats who threatened to withhold support. The fight over a government-run insurance plan took so much time and energy that other issues were eclipsed. The fracas over "death panels" during the August recess fueled a revolt against the legislation. Abortion emerged as a potent issue that nearly derailed the measure.

"The longer the clock's running, the bigger the chance you have for something to pop up and surprise you," said Peter Harbage, a Democratic health-policy consultant.

Negotiators cut parochial deals for individual lawmakers: extra Medicaid spending for Nebraska, exemptions from Medicare Advantage cuts for parts of Florida, special help for some Montana residents with asbestos disease.

All this helped secure the votes to get the bill through the Senate, but it bolstered the perception that the measure was pork barrel spending aimed at helping some more than others.

"They say, 'Look, God knows what other dirty deals they did,' " said Uwe Reinhardt, a health care economics professor at Princeton University.

(Julie Appleby and Phil Galewitz of Kaiser Health News contributed to this article.)

(Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy-research organization that isn't affiliated with Kaiser Permanente.)

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