Socialized Medicine in 10 Easy Steps

Socialized Medicine in 10 Easy Steps
June 1, 2001


Republicans have never been big fans of reforming the health insurance system, nor have many of them ever taken the time to learn much about it. Of course, that won’t be a surprise to anyone who has watched Republicans pass one bad piece of health care legislation after another over the past several years.

Actually, there’s a good reason for their apathy and ignorance about health care matters: Republican constituencies tend to be middle- or upper-middle-income working Americans. Most of them get health insurance through their employers (if they aren’t seniors on Medicare) or earn enough income to purchase their own policies in the individual market. These people or more concerned about tax cuts and IRA expansions than they are about the government taking over the health insurance system.

Thus when Democrats begin to talk about health insurance reform legislation, the Republicans’ first instinct is to oppose it strongly and vocally—right up until the time they claim credit for it and pass it as a Republican bill.

We’ve seen this scenario several times since former President Bill Clinton put health care on the political map in 1992. The drama goes something like this:

1. Democrats, whose real motive is to get a government-run health care system, complain the current system has a deplorable flaw that must be fixed immediately.

2. They find a prominent Republican, especially in the Senate—Nancy Kassebaum, Orin Hatch, Pete Domenici, and Al D’Amato in the past; probably Lincoln Chaffee, Jim Jeffords, Olympia Snowe, or Susan Collins in the future—who is willing to put the Republican imprimatur on the Democrats’ preferred fix.

3. The Democrats stand back while the issue divides the Republicans.

4. Democrats start wooing moderate Republicans to the Democratic bill, which proves to be no difficult task.

5. The Republican leadership, realizing moderate Republicans are considering the Democratic legislation, decide not to whip the defectors into shape, but to craft a bill similar to the Democrats’.

6. Republicans then throw in a few provisions intended to assuage the conservative wing of the party in hopes of preventing open rebellion.

7. Democrats then demand provisions and restrictions that will ensure the legislation, and especially the conservative provisions, won’t work.

8. Republicans concede to their demands because they have already gone too far to back down now. The bill is passed, to much fanfare and backslapping.

9. Democrats protest the legislation doesn’t go nearly far enough because the tight-fisted Republicans don’t care about the poor and uninsured.

10. Finally, when the Republican bill doesn’t work, the Democrats say "I told you so" and call for a government-run health care system.

And, of course, Republicans lose seats come the election and are never quite sure if it’s because they didn’t do enough or they did too much. And that’s perfectly understandable: When you stand on the fence, it’s never clear to which side you belong.

The evidence for this pattern is clear, at least since 1996.


Case Study #1: HIPAA

In 1995, only one Republican supported what eventually passed as the Health Insurance Portability and Accountability Act of 1996 (HIPAA). That was the legislation’s GOP cosponsor, Nancy Kassebaum of Kansas. (Senator Edward M. Kennedy (Massachusetts) was the Democratic cosponsor). Kassebaum was leaving office and wanted a legacy.

The other senator from Kansas was Bob Dole, Senate majority leader. Kassebaum said please and Dole said yes, meaning he would lean on Republican senators until they acquiesced.

It was up to the House to save Republicans from themselves, if anyone was going to. As it turned out, no one was.

House leadership staff called me in February 1996 and told me the leadership had decided it had no choice but to cave on Kassebaum-Kennedy. They planned to create a "me-too" House Republican bill that would include Medical Savings Accounts (MSAs) and demand they be part of any final package. They wanted to know if conservatives would support them.

I warned them if the Democrats pushed too hard, the Republicans would likely cave on the MSA provision. Impossible, they replied.

As it turned out, Kennedy fought the MSA provision so hard and demanded so many restrictions on them that Republicans were ready to drop the provision . . . but Kennedy relented and let the Republicans pass a very problematic health insurance reform bill with a mutilated MSA provision. They patted themselves on the back all the way to the 1996 Republican convention.

Health insurance premiums in the small-group market, which Kassebaum-Kennedy was trying to fix, have been rising ever since. Indeed, HIPAA is largely responsible for reversing the long-held notion that if you wanted affordable health insurance you needed to be in a group policy. Today, the most affordable policies are in the individual market.

And, of course, the MSAs have never worked well. Kennedy has had the great pleasure of saying "I told you so," and Republicans have spent four years trying to reform the reforms.


Case Study #2: S-CHIP

A similar pattern emerged with the 1997 legislation to expand health insurance coverage for low-income children, usually referred to as "S-CHIP."

Senator Kennedy, who has always longed for national health insurance, was once again the driving force behind it. He shopped his legislation around until Utah Republican Orin Hatch was persuaded to cosponsor it. Republican opposition in the House effectively vanished. You just can’t call it socialized medicine, they reasoned, if Hatch’s name is attached to the bill.

Then came the bidding war over how much money to throw at it. Kennedy initially wanted $18 billion. Rep. Bill Thomas (R-California) said the Republicans were willing to spend $24 billion, and Kennedy responded he was shocked at how uncaring the Republicans were.

The two sides worked out their differences. We got S-CHIP . . . and we still have millions of uninsured children.


Different Characters, Same Ending

Not long after S-CHIP, the Democrats raised a new cry of outrage, this time on mental health parity. They demanded insurers be forced to cover mental health expenses at the same level they cover physical illnesses. Senator Pete Domenici (R-New Mexico) came to the Democrats’ rescue this time.

Fortunately, Senator Phil Gramm (R-Texas) slipped in a provision that negated the mandate if it would raise a company’s premiums more than 1 percent. Since mental health parity is one of the most expensive mandates, Gramm’s measure minimized the damage the legislation could do.

Congress turned to managed care reform, pushed by Democrats (and a few Republicans) until the House and Senate leadership wrote Republican versions and passed them in their respective chambers.


A New Story Being Written

But the momentum on managed care reform has stalled. The Democrats have identified a new "villain": the pharmaceutical industry.

The Democrats have successfully conveyed the notion that if only seniors on Medicare had a prescription drug benefit, many of our nation’s health care problems would be solved. Republicans bucked for a while, but several of them are already jockeying for the "me too" position.

We are somewhere between steps No. 4 and No. 5 outlined above. In about a year we should know if the pattern will be repeated yet again . . . and if our nation’s health care system has taken (or been pushed) one more step down the road to socialized medicine.


Dr. Merrill Matthews Jr. is a visiting scholar with the Institute for Policy Innovation and policy director for the American Conservative Network, a project of the American Conservative Union. He is also an assistant editor for Health Care News.