Obama’s healthcare law: Historic reform and signature failure


WASHINGTON — President Obama had reason to be hopeful in July 2009, as he met one afternoon in the Oval Office with Maine Sen. Olympia J. Snowe.

The new president was trying to sustain his ambitious initiative to overhaul the nation’s healthcare system. He needed Snowe, a centrist Republican, to make the effort bipartisan. Now, she was telling Obama what he wanted to hear: She would be with him.

That would precipitate a months-long scramble as the president and his team shaped the legislation to meet Snowe’s concerns. White House aides worked through a 10-point memo that Snowe’s office emailed through her favored intermediary — budget director Peter Orszag. (Orszag had dated a Greek shipping heiress; Snowe is active in Greek American circles.) On Capitol Hill, Democratic staffers on the Senate Finance Committee sent nearly every paragraph of legislative language to Snowe for review.

In the end, Obama got his bill, the most sweeping domestic legislation since the 1965 creation of Medicare. But he couldn’t win over Snowe or any other Republican.

As the president seeks reelection, the Affordable Care Act, passed in 2010, stands as a historic achievement, ending a decades-long quest by Democrats — and some Republicans — to guarantee healthcare to all Americans.

At the same time, Obama’s inability to bring the parties together represents a signature failure. The president, who promised to break Washington’s partisan stalemate, would sign the most consequential legislation in modern history passed by only one party.

Obama’s struggle to expand health coverage was equally a testament to the challenge of forging compromise while one party was growing increasingly hostile to the federal government, fueled by the tea party movement that would unseat a series of centrist GOP lawmakers.

The president repeatedly sought Republican participation. He solicited input from individual GOP lawmakers. He rejected bedrock Democratic positions that would alienate Republicans. He even surrendered authority for crafting the law to Congress, a highly unusual move for a new president.

But Obama ran up against a GOP opposed to the very idea that Washington should do something as big as guarantee health coverage. Republican congressional leaders would say that Obama’s plan amounted to a government takeover of American healthcare that would increase costs and swamp the federal budget.

Senior Republicans were unified and stalwart. Several health industry officials said they were told explicitly by GOP leaders not to work with the president.

“The Republican Party has changed,” said Dan Nickelson, a former lobbyist for the prestigious Cleveland Clinic who worked on healthcare issues in Washington for four decades. “Almost right from the get-go, their tone was so negative. I don’t know if there was ever a real chance for bipartisan cooperation.”

That left Obama with few options. “He had to rely on an old-fashioned strategy — to go where the votes were,” said former Democratic Senate Majority Leader Tom Daschle, a close advisor who helped craft Obama’s healthcare strategy.

When fully implemented, the law will for the first time ensure all Americans can get health coverage, even if they have preexisting medical conditions.

Obama and his Democratic allies designed it to allow most Americans to keep the health coverage they get through work. That makes the law’s impact largely invisible to many consumers, though a host of new regulations have put a substantial burden on employers, insurers and medical providers.

At the same time, millions of people have already seen small benefits. Adult children can now stay on their parents’ health plans until age 26. Seniors are getting discounts on prescription drugs. And all Americans with insurance get check-ups and other preventive care without a co-payment.

Starting in 2014, insurers will be forbidden from denying coverage. Americans who don’t get health benefits through an employer will be able to shop on new Internet-based markets, or exchanges, for an insurance plan that meets government-mandated standards.

Low- and moderate-income Americans will get subsidies to help them buy insurance. And the poorest Americans will gain access to the government Medicaid program, except in states that reject the Medicaid expansion.

In total, the law is expected to cover about 30 million more Americans over the next decade.

It also includes potentially transformative initiatives backed by many experts to protect consumers from poor-quality medical care. The government will penalize hospitals where patients get infections and other dangerous conditions, and reward doctors who intensely manage their patients’ care.

“These reforms are already beginning to have an impact,” said Dr. Mark McClellan, who oversaw the Medicare and Medicaid programs under President George W. Bush.

But crafting the complex law required Obama to make difficult trade-offs. That led to controversial provisions now cited by the GOP as reasons to repeal the law if the president is defeated in November.

Guaranteed health coverage was made possible by a provision that mandates Americans get health insurance starting in 2014, an unpopular requirement that almost saw the law upended in the Supreme Court this year.

The program has a more than $1-trillion price tag. To prevent added deficit spending, as Obama demanded, the law is financed by tax increases on upper-income Americans and healthcare industries, as well as by cuts to future Medicare spending that critics say threaten seniors’ access to care.

It also remains unclear whether the law will actually control costs, a central promise the president made but has not fulfilled. If Obama wins a second term, that will be a major challenge.

For now, the law remains intensely polarizing.

The partisan outcome reflects some of the president’s own shortcomings.

After just four years in the Senate, Obama had a thin record of working with Republicans. The aloof president showed little interest in making the personal connections that can smooth the way to compromise.

Nor did Obama surround himself with many bridge-builders. His first chief of staff, Rahm Emanuel, was one of Washington’s fiercest partisan warriors.

Obama also came into office with huge Democratic congressional majorities, raising expectations on the left that he would advance a long-stymied liberal agenda — with or without GOP votes. That stoked suspicion among many Republicans.

“They were not interested in real bipartisanship,” said Senate Minority Leader Mitch McConnell (R-Ky.). “The only thing they wanted was a patina of bipartisanship they could get by picking off a few Republicans.”

Seven months after the healthcare law passed, McConnell said making Obama a one-term president was “the single most important thing we want to achieve.”

The president had not envisioned his healthcare overhaul as a one-party exercise, according to current and former senior aides, and congressional and healthcare officials who worked with the White House.

“His instructions to us were to do everything possible to get broad consensus,” said Daschle, who advised in a Dec. 10, 2008, memo that it would be essential to win centrist Democrats and Republicans. “And he was willing to sacrifice many of the core parts of his own philosophy on healthcare to get there.”

The president made clear that a single-payer government system, a liberal dream, was off the table. He further frustrated Democrats by refusing to demand the left’s second choice: a new government program — or “public option” — to compete with commercial insurers.

Instead, Obama backed many ideas long supported by conservatives, including the insurance mandate.

He endorsed a basic structure for expanding coverage that relied on the private sector, not government.

Similar proposals had been the building blocks of a health reform plan that nearly half of the Senate’s Republicans backed in the mid-1990s. GOP elder statesmen, including former Senate leaders Bob Dole and Howard Baker, embraced the approach.

And in 2006, Massachusetts Gov. Mitt Romney, now the Republican presidential nominee, implemented an insurance mandate and exchange in his state.

“His [Obama’s] one condition was a healthcare plan that would protect Americans and could pass,” said Neera Tanden, a former senior White House health advisor.

Several Republican lawmakers signaled interest in working with Obama. But almost at the outset, the GOP leadership was dug in.

“There were legitimate policy disagreements,” said John McDonough, a former aide to the late Sen. Edward M. Kennedy (D-Mass.), “but the clear message we heard from the GOP staffers was they couldn’t move without a signal from McConnell.”

The Republican Senate leader pressured GOP senators to stop negotiating with Obama. “It was intense and it was constant,” said one former Republican aide, who asked not to be identified discussing internal party tensions.

Healthcare leaders got a similar message. One executive said he received several calls from senior GOP lawmakers warning that he would regret participating in the process. Another said he was told that Republicans would not do anything to make the legislation better. “Republicans were going to vote against the law, no matter what,” a third executive said.

All three declined to speak publicly for fear of angering GOP congressional leaders.

Despite the hostility, Obama spent most of 2009 pursuing Republican votes.

Most significantly, he put his faith in the Senate Finance Committee, where Chairman Max Baucus, a centrist Democrat from Montana, and Iowa’s Charles E. Grassley, the senior Republican, had long worked together. Obama asked Baucus and Grassley to come up with a bipartisan healthcare bill that could win GOP support.

While negotiations in the committee dragged through 2009 and GOP lawmakers and activists intensified their attacks, many of Obama’s advisors pleaded with him to acknowledge that Republicans would never compromise. “Everyone was saying, ‘Shut Baucus down,’” recalled Emanuel. “The president was more willing to see if he could do it.”

He couldn’t. When the Finance Committee finally produced a healthcare bill in September 2009, every Republican except Snowe rejected it. Three months later, Snowe changed positions and voted against the law on the Senate floor.

One in a series of stories on the Obama record