Understanding the US health care debate (3)

Part III. The politics and controversies

The first part of the saga has just ended. President Obama finally signed the new Health Law, after the Congress earlier approved the Bill. The Law will be a major landmark for the Obama administration to push their health care reform.

With a 53% popular vote in the presidential election and a Democrat majority in both chambers of the Congress, pushing the reform seemed to be an easy job for Obama. In reality, it hasn’t been so. Republicans has pledged to block the reform, at least make it a hard-to-win battle.

Separating signal from the noise, the Republicans points were: 1) rejecting the establishment of a government-run commercial insurance which they argued will crowd-out the private insurance market, 2) allowing interstate competition of insurance companies, 3) reforming malpractice law, which had threatened doctors and hospitals with big lawsuit compensations, 4) a less costly reform involving less or no tax increase, but far fewer people would be covered by insurance. Plus some traditional Republicans issues like limiting illegal immigrants from purchasing government-funded insurance and prohibiting Federal money to finance abortion.

Learning from Clinton’s 1993 failure, Obama distanced himself (and the White House) from the micromanagement. He let the Democrats in Congress got bogged down in the details and wrestled with the opponents.

In November 2009, the House announced their version of the Bill. The version was a 1,990-page long. Many believed this version would be difficult to win. The Economist described the earlier version of the Bill as ‘soaking the rich.’ It was estimated to cost the government around US$1.5 trillion for the next 10 years, more than $1 trillion limit set by Obama. Moreover, it was not budget-neutral. It would add $239 billion to the deficit, although it included a tax increase for business with more than $250,000 per year in payroll and individuals earned more than US$350,000 a year. Plus a steep ‘surcharge’ for the wealthy.

Before Christmas, Senate came up with their version (the one which will later become the Law, with some adjustments). The procedure in the Congress requires both chambers to agree on an identical version of the Bill. This means both House and Senate would need to work on a new, merged version before going back to the voting process. The Bill is said to cost US$940 billion for the next decade, and the impact on budget deficit is US$138 lower than the baseline scenario. It aims to provide cover for 32 million out of 47 million uninsured by 2019. Still not a universal coverage, but coverage rate will increase from 85% to 94%.

Until December, this still looked to be an easy process. With a 60-seat supermajority in the Senate, Republicans would not be able to block the Bill through filibuster – keep delaying the vote on and on by continue debating a bill. But in January, Scott Brown won the Massachusetts Senate seat vacated by the late Ted Kennedy. This made him the 41^st Republican in the Senate, eliminating Democrat’s supermajority power.

Obama and his party had to switch strategy. Instead of working on a merged Bill, the House would vote for the Senate version. In this case, only 51 votes (simple majority) will be required in Senate. Later they would be able to tweak some of the clauses through what is called ‘budget reconciliation’ process. (This strategy enraged Republicans. But in truth, both parties had used this in the past.)

In February, the Obama revealed their version of the Bill, after a gathering called ‘bipartisan summit’. Practically, it was similar to the Senate Bill, except for some minor clauses regarding fines for individuals not having insurance. Later Obama also asked Harry Reid, Senate Democratic Leader and Nancy Pelosi, House speaker, to ‘consider’ some Republicans ideas: malpractice law reform and an oversee board for insurance fraud.

But the Democrats also needed to deal with internal challenges. Conservative Democrats rejected the idea that Federal money could be used to finance abortions. Democratic Hispanic Caucus concerned if illegal immigrants would be barred to purchase government insurance using their own money. On the other hand, left-wing Democrats questioned why the Bill does not contain establishing a public or government-run insurance company.

The internal lobby still took place until the last minute before the voting took place on Sunday, March 21. But in the end 219 voted ‘yes’, while 212 – all 178 Republicans and 34 Democrats – voted ‘no.’ (Many gave the biggest credit to Nancy Pelosi). The next step was mere formality. The Senate passed the bill, and in March 23 Obama signed the Bill into Law.

The Law is only the first test for the reform. The Obama administration will face other big tests. How fast the administration could start the reform (and how feasible it is in practice). Will the reform cost not blow out of what was estimated? And, more importantly, will it improve the health indicators? Not to mention another battle with the Republicans, and the states.

See also: The new Health Law, what will it do?