The history of health reform & your new 1095A form

Further reflections from my Peter Harbage memorial comments,

Or, How I learned to live with the individual mandate

If the debate about health reform has been electric, the debate around the “individual mandate” was the lightening rod, with all the zigs and zags of an electric bolt. Just as millions are filing their taxes, with a new tax form 1095A showing the new subsidies to afford coverage they received under the Affordable Care Act over the course of 2014, and others filing taxes realize they now are paying a penalty for being uninsured, it was noteworthy to look back at this policy, especially as we remember one of the early evangelists of the mandate.

This past Sunday I was honored to speak at the memorial of Peter Harbage, a health care policy consultant and friend. In both an earlier blog post, media quotes, and my remarks on Sunday, I made reference to the strange and surreal journey of the individual mandate, from a proposed partisan conservative concept to thwart health reform to a centrist compromise to a law supported by liberals.

Among his many other contributions to the world of health reform and health policy, Peter Harbage was an early evangelist for the notion of the individual mandate—and in that role helped shape the Affordable Care Act as it is benefitting millions today.

The individual mandate was first proposed in 1993 by Republican Senators as an alternative to the health care reform championed by the Clinton Administration. A related idea, the creation of “exchanges” to foster a market of coverage was the subject of a Heritage Foundation paper.

But when Massachusetts policymakers, faced with the loss of federal Medicaid funds and a looming health reform ballot by advocates, passed a health reform that had elements befitting a Republican Governor and a Democratic legislature.

The individual mandate was then seen as the conservative Republican way to do health reform, with the focus of “individual responsibility.” Liberals focused mostly on expanding public programs, from Medicaid for children and parents, all the way to Medicare for everyone: a single payer system.

But the inclusion of the individual mandate in the Massachusetts reform, with the endorsement of GOP Governor Mitt Romney and Democratic Senator and icon Ted Kennedy, moved it into the policy conversation.

In California, Governor Schwarzenegger made the individual mandate the centerpiece of his health reform push in 2007, as it reflected his brand of Republicanism.

Prior to this, consumer and community groups, and progressives in general, were skeptical of the individual mandate–in fact, Health Access California opposed prior mandate proposals in the state legislature. (Even today, this opposition was warranted, given the proposals’ flaws. And those flaws did color our thinking, leading one paper of mine to be entitled, “Individual Mandate: Unwanted, Unworkable, Unwise”),  It wasn’t that individual should contribute to the cost of coverage–they did so in the old system, and they would under a public program expansion or single-payer system through taxes. The issue was that such proposals seemed to blame the victim, and put the burden of the problem of uninsurance on the individual, rather than the employer who doesn’t provide health coverage to its employees; the insurer who overcharges or who denies for pre-existing condition; or on a state government that restricts Medicaid or any other financial help for coverage to the poorest of the poor, and even leaves out many of those who need help.

What was notable about the Massachusetts plan, and Schwarzenegger’s effort in California, was that the mandate was bundled as “shared responsibility” with other proposals that progressive reformers thought were essential–requirements on insurers and employers, guarantees on affordability, etc. For example, here in California, Schwarzenegger included many of these steps. Additional negotiation with the Democratic Assembly brought it further, but not far enough for some. It eventually died in the California Senate with opposition from the right and left.

Peter was one of the main consultants working with the Schwarzenegger Administration on its effort, working with the New America Foundation.

That same year, Peter continued as the senior advisor on health care to Senator John Edwards for his run for Presidencies, and in that role helped craft, in 2007-8, the first comprehensive health reform proposal by a major presidential candidate in a generation. Since the failure of the President Bill Clinton in 1993, Democrats generally did not put forward broad health reform proposals, favoring specific proposals like an HMO Patients’ Bill of Right or expansion of children’s coverage. Some minor candidates endorsed single-payer, but neither the candidates nor the proposal had significant traction.

So it was a really big deal for Senator Edwards, a serious candidate as the former vice-presidential nominee of the Democratic party, to spell out a plan that would get close to universal care. Other candidates might have laid out broad principles, or had a more piecemeal approach. Having a comprehensive plan certainly was not a given: Senator Clinton had her health care reform credibility (or baggage, depending on your viewpoint) from her past efforts, and may not have seen an advantage. Senator Obama had a good history on health care in the state legislature, but his initial speeches and comments were cautious.

Columnist Paul Krugman praised the proposal in a op-ed called “Edwards Gets It Right”: “At first glance, the Edwards health care plan looks similar to several other proposals out there, including one recently unveiled by Arnold Schwarzenegger in California. But a closer look reveals extra features in the Edwards plan that take it a lot closer to what the country really needs.” And he noted that it prodded the other major candidates as well: “This is a smart, serious proposal. It addresses both the problem of the uninsured and the waste and inefficiency of our fragmented insurance system. And every candidate should be pressed to come up with something comparable. Yes, that includes Barack Obama and Hillary Clinton.” Krugman called out the candidates, including the one who would be President. By having Senator Edwards propose this comprehensive plan, it prompted and gave political space for Senator Clinton and Senator Obama to follow suit with similar proposals–which they did.

With Peter’s urging and crafting, Senator Edwards included the individual mandate in his plan, and suddenly, the individual mandate became a conservative idea, to a benchmark of universality. The candidate staking out the left flank was calling for an individual mandate–and all the other policy changes that logically flow from it–if you want to ensure that people must have coverage, suddenly you have to heavily regulate and negotiate with insurers, to stop denials for pre-existing conditions, and to set standards for coverage, and to subsidize it for the many who can’t afford it. If you subsidize it, you have to define what kind of coverage you are talking about, in terms of benefits and cost-sharing. You have to ensure employers just don’t dump coverage, so you need some requirement on them. At the end of the day, the mandate was much more an expectation of government ensuring access and affordability, than on individuals who generally already need coverage in today’s modern world of expensive medicine where one emergency can otherwise mean financial ruin.

And that is why although the individual mandate has Republican roots, it is disingenuous to call it a Republican proposal. The Democrats, in adopting it and making it workable, also made it their own. They set standards and subsidies for coverage. You could see it in the comments of the Republican Senators like Chuck Grassley and others that Senator Max Baucus was attempting to bring along in negotiations during the summer of 2009–they like the idea of individual responsibility, but then got cold feet when they recognized the implications of what that would mean would also have to be changed. Few Republicans shared the ideological flexibility (or inconsistency) of Mitt Romney and Arnold Schwarzenegger–who to their credit, followed the logic of their policy, at least to a point.

The focus of the policy went from a mandate on individuals to get the coverage they want and need anyway, and more a mandate on government to guarantee that  such coverage is available, affordable, adequate, and administratively simple.

In a world without Peter’s influence, perhaps Senator Edwards doesn’t offer a such a comprehensive proposal, and that the Senators Clinton and Obama don’t either. Or they offer such varied and different ideas that there isn’t the consensus in the Democratic Party that allows the eventual President Obama to move a proposal through Congress. Having the progressive candidate endorse the individual mandate was a key moment in having progressives adopt it as a plank–so much so it was only a small deal when President Obama included it in his proposal, even if it wasn’t in his proposal as a candidate.

Health reform wasn’t won in the 2007-08 campaign, but the opportunity could have been lost without many factors coming together. Peter Harbage was one of many people who made health reform his life’s work, and together history was made, and millions now benefit from coverage. I was happy to help spotlight the specific and tangible way he helped thread the needle to put the United State on the path to reform.

And it gives an opportunity to remark about the evolution of a health policy idea, one that people are seeing evidence now as they see the subsidies or penalties on their tax filings. The policy’s dramatic story continued through contentious Congressional debates and even threatening to undo the entire project at the Supreme Court, being upheld by a narrow 5-4 vote. The rest, as they say, is history.