Clinton’s Health Care Failure
By: Gustavo Munoz
Tags: Politics, Journalism, Election 2020, Healthcare, History

Photo by Chris Grafton on Unsplash

Clinton’s Health Care Failure

Proponents of single-payer health care haven’t learned from reformer’s past mistakes. Here’s why they should

The 2020 Election is shaping up to be a referendum on the future of health care in the United States. The Progressive wing of the Democratic party is championing a single-payer health care system at all costs. In their eyes, there should be no middle ground. With a potential unified democratic government come January, Progressives have proposed enacting single-payer care without compromising with Republicans on the legislation. The left-wing of the party believes Democrats have tried “pragmatism” far too often without success.

The moderate wing of the Democratic party recognizes that single-payer is just out of reach in the current political climate. Moderates propose that the first steps in acquiring single-payer health care would be to not only to restore Obamacare, but to expand it as well. They think they can work with the Republican party to lower the price of health care services, insurance, and drug prices. As long as single-payer care has a price tag of $3 trillion a year, the moderates won’t take a stand in support of it.

“Continued escalation of health care costs threaten the economy of the United States, undermines international competitiveness of the Nation, and strains federal, state, and local budgets.” -H.R. 3600, the Health Security Act (1993)

This isn’t a new struggle in American politics. We’ve been through this health care song and dance before. In 1993, the Clinton Administration worked tirelessly during its first 100 days to overhaul the health care system in the United States. While single-payer had momentarily been on the table for the Administration, they decided instead to adopt pro-market reforms. The Administration pivoted to enact a system of managed competition, similar to the insurance collectives Obamacare created. While Clinton’s plan would have achieved near universal coverage, it was a program mostly funded by charges on employers in the country. When small businesses organized together to protest the bill, a wide range of alternative proposals were offered in Congress. Single-payer health care had a decent chance, gaining support from almost 100 representatives in the House.

Unfortunately, all of the health care reform proposals died in Congress. As the country puts health care reform at the top of the agenda again, we should take care to heed the lessons from Clinton’s struggle, to shake up the status quo. There’s no shot at passing meaningful reform, progressive or moderate, if we don’t learn from the past.

Policy in the United States is not necessarily a technocratic endeavor. Much of the legislation that shapes our daily lives started as policy proposals from interest groups, think tanks, and policy wonks. No matter how well those policies were drafted by their original authors, there is still a reason why these proposals are referred to as drafts. In order for legislation to be created, it must survive a barrage of obstacles from zealous committee members, officials both elected and unelected, the media, and voters. Not only that, the proposal must compete with opposition from ideological counterparts and their motives. The legislation’s author also affects public perception of the policy, and can ultimately lead to its failure. Given all of this, it is easy to see the challenges that the 1993 Health Security Act (HSA) faced. The Clinton Administration attempted to enact sweeping reform to the entire United States health care system. This reform faced some of the most wealthy, widely used, and entrenched institutions in the country.

Failing to find a base for support, the HSA found itself in an uphill battle that quickly turned into a war along a porous border with new fronts emerging on a daily basis. The will of the people to support President Clinton’s health care reform devolved from a supportive atmosphere to one of stark opposition.

The ultimate failure of policy comes from the Clinton administration itself. Numerous missteps and failures ruined the nation’s best opportunity for reform until Obama’s Affordable Care Act in 2010. While there are potentially hundreds of reasons for the failure of any large scale reform, the Clinton Administration prevented the passage of the HSA through poor planning, messaging, public relations, political stonewalling, and budgetary constraints. The insurmountable hurdle then, was the disarray in the White House that defined Clinton’s first term in office, and the public’s growing distrust with his administration.

The Uphill Battle

Paul Starr, author of Remedy and Reaction, wrote extensively about the difficulties the White House would face in its efforts to create universal health care. For starters, the country had found itself inside of a policy trap. Prior reforms had been created to cover just enough of the population, benefiting groups such as the elderly and the poor, that changing the entire health care system was politically risky. The middle class also enjoyed the health care service they were given by their employers, and the elderly felt entitled to the health care they received through Medicare. The status quo left tens of millions uninsured, but they did not vote on the basis of health care. This group of uninsured lacked any political organization that could compete with the entrenched interests of the insurance companies and medical groups, as well as the lobbying organizations, like the AARP. In order to create reform, the Clinton administration needed to win businesses over and expand health coverage for the elderly to gain their support. Clinton thought doing so would create a broad enough coalition to pass the legislation. Building the coalition was only the first step in the process, though.

To understand why Clinton’s proposal to Congress lost popular support so quickly, we must understand the political climate surrounding the effort. The 1990s were a time of rampant rising costs of health care. Insurance premiums rose 90% from 1987 to 1993, while wages increased 28%, meaning the public was suffering under an increase in costs without receiving the wages to match. The conservative backlash contesting increased taxes and government inefficiency had come to define the Republican party during this time. This anti-tax political atmosphere meant Clinton needed to be wary of cost overruns and funding streams for his health care plan.

The HSA would have been much easier to enact had it been passed under budget reconciliation, a Senate procedural rule that allows for budgetary amendments to be passed with a simple majority instead of the typical 60 vote threshold. The filibuster cannot be used to break this process, and it is thus a favorite tool of large-scale budgetary reform. President Clinton, with the support of a democratic house and senate, could have easily passed the landmark health care reform had he been able to pass the HSA this way. However, Senator Byrd, the official deficit hawk and keeper of tradition in the senate, told Clinton and his supporters that the bill was too impactful and large scale to be passed through reconciliation. The battle for reform would not be quick and rewarding, but a gruelling effort to enlist Republican support and toe the line so all 57 democrats would vote in step with the party. This would be no easy task to accomplish.

Losing the Party’s Support

The Democratic party had been forced to make votes that threatened numerous members’ seats in both chambers of Congress. The president pursued an agenda of economic reform, trade reform, and stricter gun control legislation in the 1993 budget, forcing some of his partisan allies to make some difficult votes. With his political capital expended, representatives and senators tried to avoid pressure from the White House so they could maintain popular support at home and win their re-election campaigns.

During the debate about the HSA, Clinton slowly saw his favorability rating decline in the polls. The president appointed his wife Hillary Clinton as a leader in drafting the health care reform. This was supposed to mark his seriousness in the endeavor, but the media and opposition began to view the First Lady’s appointment as the beginning of a wave of nepotism that the Clinton administration became notorious for. The firing of White House travel agency staff and their subsequent replacement by Clinton’s supporters, became a large controversy as well as the Whitewater investigation and the conspiracy theories spreading from that investigation. Ira Magaziner, the other head of the health care reform legislation, was an advisor to Clinton in his prior capacity as governor, and highlighted President Clinton’s tendency to employ those that were not always considered the leading experts in their respective fields. All of these scandals plagued Clinton’s first term: Republicans quickly discovered that running an anti-Clinton platform was an effective strategy to win more seats in Congress.

The entire process of creating the legislation was tumultuous. Lawsuits challenged the validity of the task force that was working on the policy, which led to its dissolution and the creation of a new ad hoc committee of up to 500 members that debated what would eventually turn into the HSA. Republicans were mostly excluded from the process, which appeared to be almost entirely run by Democrats in health industries, health regulatory agencies, and congressional staffers. Running an outfit this large with heated and conflicting views about policy goals lead to massively devastating leaks. Republicans seized on the opportunity, using the leaks to control the public message about the reform act. The semi-closed door creation of the policy was thus drawing suspicion to the Clinton plan. This gave Republicans a bad first impression of the new president and his health care initiative.

Bolstered by a New York Times article that claimed Clinton’s proposal would increase health care spending by one hundred billion dollars a year, moderate Republicans and moderate Democrats began working on their own counter proposals. The Times’ article itself was cited in the efforts against the HSA, in spite of the fact that Starr claims it had been based on an incomplete set of information that was leaked prematurely. Nonetheless, the fiscal ramifications drew moderates from both parties. Those on the far left and far right worked on their own healthcare reform legislation as well. Senator Grandy, a Republican, and Senator Cooper, a Democrat, co-authored legislation that would essentially broaden the amount of people that could obtain insurance, but stopped short of universal coverage. This was a non-starter for the White House, since Clinton had already promised health care reform would cover all Americans. The Administration’s unwillingness to negotiate with Congress drew the ire of both Democrats and Republicans alike.

Congressional leadership did not wholeheartedly agree with Clinton’s approach to health care. There was the ever-looming “Moynihan-problem,” where Senate Finance Chair Daniel Moynihan consistently changed his mind about what policies he would and wouldn’t support. As the Finance Chair’s approval was necessary to pass the bill, Moynihan’s lack of a solid stance made negotiations difficult. Moynihan flip-flopped frequently, even at one point claiming that “universal coverage already exists because people could go to the Emergency Room” and receive care, no matter their insurance status.

When Ways and Means Health Subcommittee Chairman Rostenkowski was indicted for fraud, Clinton lost an important ally in the health care fight. The democrat who replaced him, Pete Stark, was opposed to the HSA. Upon becoming chair, Stark worked to turn the committee against the White House. Clinton could no longer control his caucus and get them to support his health initiative in either chamber of Congress. Losing the House Ways and Means Committee and the Senate Finance Committee meant the HSA’s success was virtually doomed.

Institutional Restraints

To make matters worse, a negative review by the Congressional Budget Office (CBO) estimated that the HSA would actually increase the federal budget deficit over time instead of reducing it. CBO rates each bill in Congress that has been passed out of committee. It tells legislators how much the bill’s program will cost the government (and by extension the taxpayers). With a negative score, Clinton’s main talking point had been taken from him. He had claimed that his health care proposal would improve health outcomes at a cheaper price. House Resolution (H.R.) 3600, the official name for the HSA, claims “continued escalation of health care costs threaten the economy of the United States, undermines international competitiveness of the Nation, and strains federal, state, and local budgets.” According to the wording of the legislation itself, it was supposed to reduce costs, not increase them, and this became a huge sticking point against the reform effort.

In an effort to improve the CBO score, Clinton’s team tightened up the policy and lowered the subsidy that the government would pay for the new health care plan. The rest of the costs would be paid when an individual visited their health care provider. These changes improved CBO’s forecast, but led to an even greater disapproval rating from the left-wing of the Democratic party. The lower cost still did not win over a single Republican.

Clinton’s lack of willingness to accept anything short of universal coverage was marketed as an act of no faith, and thus made negotiations more difficult. By the time the White House was willing to compromise on the universality of coverage, public opinion and political opposition would prove to be too formidable to beat. Many pundits and journalists after the fact proclaimed the proposal was doomed from the start. They concluded that with a reform this big, the best way to sell it to the American people would be to initiate it incrementally. The media insisted that instead of launching sweeping reforms that would affect the health care industry and hundreds of billions of dollars in spending, the Clinton administration should have tried to enact reform bit by bit. Though small scale reform was more popular with politicians, Clinton viewed incrementalism as an expansion of the current policy trap that the country found itself in with Medicare.

The Clinton administration had believed that the time for health care reform was right. When they ultimately lost their caucus, business, supportive unions, their messaging platform, consensus about the next step forward, cost controls, popularity, and procedural advantages, the window for health care reform was closed.

If universal, single-payer health care ever has a chance in this country, these conditions must be met. The Democratic party must agree on one policy. Businesses large and small need to be included in the drafting process. Unions must champion the health care reform proposed, and they must have a seat at the negotiating table. The message should be unified and supported by left-leaning media and survive scrutiny from the moderate media. Costs need to be contained so as to be palatable for Congressional leaders and their constituents. The right leaders in Congress must have positions of power throughout the committee system and party leadership offices. Most importantly, Democrats must have unified control of the House, Senate, and Presidency. Without all of these conditions being met, the fight for single-payer health care will just be that: a fight.