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The Sausage Factory

The Obamacare Rollout and Past Healthcare Reform Attempts

The introduction of Obamacare’s health insurance exchanges has been an impressive debacle. Americans trying to purchase insurance through Healthcare.gov have found it practically impossible, forcing them to resort to signing up through a call center or via paper forms. Also, millions of people have lost their existing insurance plans, despite the Democrats’ promise that those who were happy with their coverage could keep it. When the numbers were released last week, it appeared the number of people who have lost the insurance they had outnumbered those who enrolled in a plan under Obamacare by a factor of about 50. For weeks, Members of Congress have been demanding answers from the Administration and the President himself had to deliver a speech addressing the poor implementation of the law.

It’s been a public-relations nightmare for supporters of the law, but that’s an old scene for healthcare reformers. There have been plenty of instances where the rollout of healthcare legislation has been marred by controversy.

1966: Medicare, the mother of all American healthcare programs, kicks off. Hospitals wishing to participate were required to comply with the Civil Rights Act of 1964; most, but not all, did so by the time the program started. Another controversy was over billing. The law gave doctors the option of billing either the government or the patient, who would then request reimbursement. Many doctors opted for the latter, arguing the time and hassle of billing the government would take away from time with patients. On the other hand, some argued that the many seniors could not afford to wait for reimbursement or would be confused by the process. “It is argued that the older men and women will be confused, befuddled and frustrated by the paper work involved in submitting their own claims to the federal government for compensation for money already paid to their physicians or surgeons in response to direct billing,” Lyle Wilson of United Press International wrote at the time.

Despite these initial hiccups, Medicare remains popular.

1988: President Reagan and congressional Democrats passed a major reform to Medicare, the Medicare Catastrophic Coverage Act. It was supposed to limit the amount senior citizens, Americans with disabilities and the impoverished were to pay for hospital and nursing home care. The legislation had two fatal flaws: Not only were more affluent seniors assessed a surtax, but many also already had insurance plans that already provided the benefits the law did. Supporters of the legislation were concerned that the seniors misunderstood the law. But that did not stop them from protesting vigorously through letter-writing campaigns, town hall meetings and the like. House Ways and Means Committee Chairman Dan Rostenkowski was even chased down the street by a group of his constituents, with one even lying across the hood of the congressman’s car. The New York Times succinctly summed up what many Members of Congress faced:

Protesters had assailed members of Congress at town hall meetings in virtually every Congressional district. Some lawmakers privately acknowledged that the intensity of the protests led them to fear defeat at the polls next year unless the measure was repealed.

The law was repealed in fall 1989, just about a year and a quarter after it was passed. It was a bitter defeat for President George H.W. Bush and Democratic leaders, all of whom supported the law but were not able to keep it in place.

Whoops. Better luck next time.

1994: Actually, next time was even worse. HillaryCare. Having failed to pass the Senate, the healthcare reform legislation never even made it off the ground.  The most memorable item were the confusing flow charts that looked like labyrinths the ancient Greeks could be proud of. The disaster contributed to the historic victory by House Republicans later that year.

2006: The next major attempt at improving healthcare coverage in the country was the Medicare Modernization Act of 2003, the biggest expansion of Medicare in its history and one of President George W. Bush’s major domestic policy initiatives. The law created Medicare Part D, which subsidized the purchase of expensive prescription drugs. Coverage was set to begin on January 1, 2006, but seniors could start enrolling in insurance plans two months before that. Six months before the beginning of the enrollment period, the Administration engaged in a heavy-duty public awareness campaign to inform the elderly about Medicare Part D.  They took out advertisements for the TV, radio and in print. Additionally, there were many public appearances by government officials, including a bus tour that stopped in more than 80 cities. Members of Congress from both parties got in on the act and held events as well, some of which included providing help for seniors who wanted to sign up for drug plans.

Although the Bush Administration was aggressive in educating senior citizens about the law, the media led the Bronx cheers with numerous reports of problems with its implementation. The Christian Science Monitor had one of the most colorful descriptions of the program: Opponents called it “a nightmarish journey into a complex world of benefit plans for seniors.” Many did indeed complain that the sheer variety of plans available was confusing. The Pittsburgh Post-Gazette carried a guide to the program called “D is for Daunting,” which was “aimed at simplifying this dizzying array of choices.”

As it turned out, the biggest problems were the abundance of choices. Premiums were lower than expectations, which was a pleasant surprise for many.   This Administration should have learned from the private sector maxim of under-promise and over-perform.

Once the new year started, many were able to receive their prescriptions, but for at least a couple weeks, some elderly were denied the drugs they anticipated receiving. Computer glitches and a lack of information on the part of beneficiaries caused some of the problems; additionally, to resolve some of the issues, some pharmacists had to spend a long time on the phone with insurance agencies. In response to the rollout problems, around 20 states stepped in to provide assistance in buying drugs. Some lawmakers called for a delay in imposing the penalties for those who did not enroll the drug coverage plans on time.

Despite early problems with initiating Medicare Part D, it remains very popular today. According to Gallup, about three weeks after coverage began, only 20 percent of seniors thought the program worked; three months after that 33 percent thought it was working. One poll sponsored by a different organization in October 2012 found that 90 percent of seniors approve of the program.

Ten years after Medicare part D was enacted, here we are at Obamacare’s rollout. This program is what the President will be remembered for, since the stimulus bill at the beginning of his term, his only other significant legislative achievement, is far more forgettable and because the healthcare reform is nearly impossible to repeal. (We would have included Dodd-Frank, but four years later, the government is still issuing regulations to implement it.) Some are comparing the introduction of Medicare Part D to what is going on today. Nobody remembers the early problems, and nearly everyone loves it, they say. That’s an open question: Despite some early glitches, Medicare D didn’t really harm the President Bush’s job approval rating , whereas President Obama’s is falling through the floor – down six points since the rollout. President Obama should hope nothing else goes wrong, since there are plenty of lawmakers who might be looking for the Medicare Catastrophic Coverage Act redux.

Mark Strand is the President of the Congressional Institute and Timothy Lang is a research assistant. The Sausage Factory blog is a Congressional Institute project dedicated to explaining parliamentary procedure, Congressional politics, and other issues pertaining to the legislative branch.

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