Bill Clinton's Presidency

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How did various interest groups, such as insurance companies and doctors, affect the success of the 1993 health care reforms and determine its failure? Please be as specific as possible.

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There is always a tendency to read political history from the perspective of a battle between the noble, well-intentioned legislator battling against the greedy for-profit special interest groups. This is a popular narrative in American history, but it does little to explain how the politicians ultimately choose to pass or not pass legislation. In the case of the Health Security Act of 1993 (or Hillarycare as its detractors called it), sufficed to say there is more than enough blame that can be equally distributed between legislators and industry advocates. Not to be lost in the battle was the fact there was a Democratic President, Democratic majority in Congress, and a Democratic majority in the Senate.

Industry interest groups from physicians to hospitals to insurance companies generally did not support the more than one-thousand-page bill. The contents of the bill were created in secret and, as such, generated a significant amount of opposition even before the bill was introduced.

The medical profession was concerned about the creation of a new board, the National Health Board that would oversee all medical care. Medical groups objected to what they believed was an overzealous expansion of oversight in the physician/patient relationships. The groups representing the medical profession were also concerned about the reduced payment structure and portions of the bill dealing with malpractice reform.

Insurance industry representatives believed the bill would lead to the eventual end of the health insurance business and would lead to a single-payer system. One component of the insurance industry that people not familiar with the industry do not understand is that many large insurers used the sale of health insurance to employers as a way to gain entry into providing other more profitable insurance products (retirement, life insurance, etc.) to the employer. They viewed the government takeover of the health insurance industry as a prelude to a possible takeover of the employee benefits industry. Insurers lined up against the bill to protect both sides of their business interests.

Business industries were suspect of the bill as well. They believed the reform would ultimately result in increased business taxes and increased costs as the government would mandate the types of coverage businesses would be required to offer. Business representatives did not want to have the cost of medical claims for unemployed or government-sponsored plans shifted to them—in the form of universal premiums or increased medical costs. The numbers added up to a tax increase, which businesses did not feel they could absorb.

Consumer groups were active in the battle as well. While many consumer groups thought universal healthcare was a definite advance in government policy, many consumer groups opposed the bill on moral grounds. Pro-choice and pro-life groups battled over the portion of the bill dealing with abortion. Groups representing elderly citizens thought the language in the bill contained provisions that would ration care. The last year of a person’s life is the most expensive medical care. Groups representing the elderly believed the payment mechanisms in the bill would result in reduced or no care. Some referred to this as a death panel that would decide based on your age who would receive life-saving care and who would not.

Within the ranks of the Democratic majorities, there was not a clear path to legislative success. With opposition mounting, politicians do what they do best and killed the bill.

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