Reason has been covering the march toward health care reform for so long, we remember when the Affordable Care Act was just a glimmer in President Barack Obama's eye. As the package of health care laws that would eventually become known as Obamacare stumbled through debate, passage, and early implementation, our crack team of writers and reporters was there, chronicling the twists, turns, and dramatic reversals. And now, in honor of our special Obamacare issue, we have stitched together that coverage into a single handy, linktastic narrative. Enjoy!
Barack Obama campaigned on the promise of health care reform, and the moment he was elected president the push for a major overhaul began. But how to reform the system? In December 2008, Ronald Bailey took a look at "Tom Daschle's Plan for Health Care Rationing"—an unsparing assessment of the proposals of the president's initial nominee to run the Department of Health and Human Services (HHS). Daschle's big idea, a Federal Health Board, was supposed to produce health care savings by making comparative effectiveness determinations about different medical procedures. But Bailey concluded that the Fed Board "would be able to cut costs only by limiting access to care."
What might work better? In March 2009, Bailey argued that free markets can provide health security through "health status insurance"—basically, a form of life-long insurance against catastrophic changes in an individual's current health level. "Creating and selling separate health-status insurance policies would mean that medical insurance companies would no longer have an incentive to offload sick people," he wrote. "Instead, because those with pre-existing conditions would have the funds to pay higher premiums, insurers would compete for their business."
The Debate, Part 1:
Before long, the push for health care reform was consuming Washington. President Obama, now settled into the Oval Office, was making it an early top priority, and congressional staffers were beavering away on options to expand coverage, often citing the health systems of European countries as models.
In May 2009, Shikha Dalmia weighed in with evidence that "countries with universal health coverage are economically worse off than the U.S." And Ronald Bailey returned to the thorny question of what counts as health care "rationing." Peter Suderman (that's me!) looked at the political life of the public option—a controversial idea, favored by many would-be health reformers, of starting a government-run insurance plan to compete with private sector options. As the summer progressed, bills began to move through the legislative process. But Jacob Sullum argued that an early draft, passed by two House committees, "would spend much more than necessary to subsidize medical coverage for uninsured Americans while failing to deliver on Obama's commitment to control health care costs." And Shikha Dalmia called out the president for the dishonesty of his health reform promises.
The Angry Town Halls:
The public didn't think much of Congress' health care reform plans either, and in August, they let their feelings be known. When legislators returned home to conduct town hall meetings with their constituents, many of them encountered angry opposition. These events turned into what Jesse Walker called "medical mosh pits," and they stirred up plenty of controversy about whether their opposition was the product of true grassroots outrage. According to Walker, the anger was genuinely felt; there was "no evidence that any significant fraction of the protesters are poseurs."
The Debate, Part 2:
After the August town halls, the tenor of the debate changed. The reform bills weren't polling well, and activists had made the force of their opposition clear. Democrats, led by President Obama, signaled that they were determined to proceed anyway. In September, Obama gave a major primetime speech about the law in which he "embraced every bad big-government idea from both sides," wrote Shikha Dalmia. Inevitably, she said, those ideas would end up "breaking key campaign promises he had made to voters."
In particular, he had opposed the inclusion of a mandate—a requirement that individuals purchase health coverage—yet after being elected, he changed his tune and embraced the requirement. It was a broken promise. It was also legally dubious. As both Damon Root and Jacob Sullum noted, there were serious questions about the constitutionality of the provision—questions that would end up haunting the law for years to come.
Another problem? Many of the ideas in the bill had already been tried in the states—and they didn't always work so well.
As the year came to a close, the Senate took up the bill. The Congressional Budget Office (CBO) estimated the law would reduce the deficit if enacted as planned, although that didn't seem very likely. The CBO's score was based on legislative reality—not political reality. It didn't matter. A deal came together. Senate Majority Leader Harry Reid waxed on about the right to health care, and Democratic Sen. Joe Lieberman looked as if he might tank the whole thing at the last minute, but early on Christmas Eve, the legislation passed in the Senate. The law looked like a done deal.
The Massachusetts Mess:
Or was it? A little-watched election in Massachusetts threatened to upset the entire project. By the end of 2009, the House and Senate had both passed legislation, but their versions were different. Normally that would simply require merging the two bills through the reconciliation process, and then holding new votes on the merged, final bill.
But in January 2010, Republican Scott Brown came from behind to beat Democrat Martha Coakley, who ran an incredibly incompetent campaign, for a Massachusetts Senate seat. The result was that Democrats no longer had a filibuster-proof 60-vote majority in the Senate, meaning the House would have to pass the Senate's version with essentially no changes. The vote would be tough and would come on the heels of an unexpected Democratic loss fueled by opposition to the health law. House Democrats were more than a little skittish, and there were worries that Brown's election had doomed the health law.
Despite Democratic jitters, the health care overhaul didn't die. President Obama and Republican leaders in Congress held a public confab to talk about the plan, and not everyone got their facts right. The GOP was deeply opposed, and Rep. Paul Ryan (R-Wis.) gave a viral mini-speech about the smoke and mirrors used to sell the bill, although Republicans didn't seem to have many clear ideas of their own. Debate about the constitutionality of the law continued.
Meanwhile, Democrats glommed onto the notion that, despite its consistently low polling, the law would became popular after it passed—an idea that never really made sense. But in late March, after Democrats had finally rounded up enough votes, the law passed in the House. Its claims of fiscal responsibility remained dubious, its mandate remained controversial, and there was growing skepticism about its constitutionality, but it was finally set to become the law of the land.
Implementation, Part 1:
We had to pass the law to find out what was in it. And as soon as Obamacare became law, we started to get an idea. The law would likely have "significant unintended consequences" for legislators and staff, a Congressional Research Service memo said. And they weren't the only ones. Huge taxes and fees were on their way. The law would likely cost more than expected, and the administration may have known that in advance. Bad news started to appear on the horizon, as companies took write-downs associated with the law, and employers broached the possibility of dropping coverage for workers—potentially invalidating Obama's promise that those who liked their plans could keep them under the law. After just a month, the law already looked like it was failing. Before long, liberal activist groups were quietly advising their own members not to tout the law's alleged cost reductions.
Citizen opposition continued, only now it focused on repeal—and defeat of the Democrats who voted for the law. "The perpetrators of ObamaCare must be defeated in November and 2012," wrote Shikha Dalmia the week after the law passed. Supporters of the law kept trying to convince themselves that, actually, the law was popular. It wasn't.
Much of the implementation responsibility fell to the states, which were expected to set up health insurance exchanges and expand Medicaid under the law, as well as manage features like the newly created high-risk pools. But the states balked at potentially budget-busting requirements and coercive federal mandates. The high-risk pools could easily be overloaded and go over budget. The exchanges would be technically complex, and the Medicaid expansion would further strain state resources. "Fast, accurate income verification presents a particularly serious difficulty," wrote Peter Suderman in 2010's "Rogue States." Even amongst supporters of the law, the realization was growing: Passing Obamacare had been tough. Making it work would be more difficult still.
In addition to the implementation problems, there were also multiple budding legal challenges. Across the country, legal critics of the law began the process of bringing their constitutional concerns about the law and its mandate to the attention of the courts. A consortium of states, led by Florida, launched the biggest effort to challenge the law on the grounds that it exceeded the bounds of congressional power under the U.S. Constitution's commerce clause and that its Medicaid expansion was illegally coercive of state governments.
But even the challengers initially assumed that their chances were slim. "When the idea for the challenge was created," conservative George Washington University law professor Orin Kerr told Damon Root in 2012, "it was understood to be a long shot." And yet, to the surprise of the legal establishment, once the case hit the courts, the challengers actually started winning.
Part of the argument was about policy, and the law's defenders relied on a host of dubious assumptions about how the law might play out. But mostly the challenge was driven by arguments that came out of the world of libertarian legal scholarship, and it involved a complex history of court precedents dating back to the early part of the 20th century.
Perhaps the simplest way to explain the debate, however, was contained in the odd-sounding question: Can Congress compel individuals to eat broccoli? In the Reason TV video "Wheat, Weed, and Obamacare: How the Commerce Clause Made Congress All Powerful," that question was put to a pair of legal scholars—and their answers ended up influencing the Supreme Court's decision.
Ultimately, Obamacare's legal challengers lost in a sort of Bizarro-world ruling that was exactly the opposite of what was expected: The High Court said that Congress had exceeded its power under the Commerce Clause, but that the mandate was nevertheless permissible as a tax, despite the administration's repeated claims that it was not a tax. The Court's decision saved Congress the step of making the change on its own, which, as Jacob Sullum noted in Reason's July 2012 issue, would likely have made the provision technically legal, thanks to a string of precedents expanding the congressional tax power. The ruling also gave the challengers a victory that even critics of the law didn't expect, ruling that states could opt out of Medicaid without risking their existing federal Medicaid funding.
Implementation, Part 2:
The Supreme Court's decision helped created a unique federalist opportunity, in which states could choose whether to build their own exchanges or expand Medicaid under the law. And after much political fighting, the result was that many state governments chose to opt out of one or both. With Medicaid, that meant about half the states didn't expand the program at all. With the exchanges, that meant that the federal government would build and run Obamacare's online insurance in 36 states. The other 14 states would be managing the exchanges themselves, with the help of federal funding and supervision.
Obamacare's insurance exchanges were set to open in October of 2013. But long before then, signs of trouble were apparent. The high risk pools that states had worried about turned out to be under-enrolled and more expensive than expected. The political and legal hurdles got more attention, but as early as summer 2012, reports were circulating that the exchanges were more technically challenging than anticipated. Obamacare's biggest problem might not end up being Congress or the courts, but computers.
As the opening day crept closer, congressional legislators grew nervous. They had reason to be. Administration officials delayed multiple components of the law even before the exchanges opened. Oregon announced that its state-run exchange would not open on time. Other states appeared to be struggling as well.
And federal officials didn't exactly seem confident. "It's only prudent to not assume everything is going to work perfectly on day one," one senior federal health official said about the exchanges in March 2013. "Let's just make sure it's not a third-world experience," said another.
"Will Obamacare's federally run health insurance exchanges be ready on time?" Peter Suderman wondered in June 2013. The Government Accountability Office (GAO) issued a report that looked at the multiple missed deadlines so far, and warned that further delays could mean missing the scheduled October opening. "In other words," Suderman wrote, "there's still a lot of work to be done, and the conclusion one ought to draw from the GAO report is that it's not entirely clear that federal officials can complete it all on time."
The Botched Launch:
As it turned out, they couldn't. The Obama administration never ran a complete, end-to-end test of the federal exchange system—and the system failed some of the tests that were run. So when the exchanges launched on October 1, almost no one was able to sign up in the 36 states covered by the federal exchange. Indeed, the first person reported to have signed up through the federal system, a young man from Georgia named Chad Henderson, whose name was circulated through the press and even inside the White House, turned out not to have signed up at all. The administration promised that it would all be fixed in short order, but a month after launch, almost nothing about the federal exchange was working.
At the same time, millions of people across the country were receiving notices that their individual health plans were being cancelled because they did not meet Obamacare's coverage requirements—despite President Obama's repeated promises that anyone who liked his or her plan could keep it. Reports suggested that the White House knew the promise could not be kept, but made it anyway. In short, they lied—and they did it over and over again.
The White House's response was to propose a "fix" that allowed some people to keep their plans. Yet as Shikha Dalmia wrote in November 2013, it was a fix that undermined the foundation of the law, one that could lead to disaster. Was the tweak even legal? Did it matter? "The only prayer the administration had of avoiding this eventuality was by fixing the exchange and getting more healthy people to sign up."
By December, the administration's website fixes had kicked in. The exchange was working better, and while sign-ups were still lower than expected, it appeared to have escaped death. "What Obamacare has proven this year is not that it can work, but that it can survive," wrote Peter Suderman.
Obamacare survived and, in the last days of its first open enrollment period, saw a surge of activity that resulted in some 8 million people signing up for coverage. But even as the law settled into place, much about its future remained uncertain. How would Republicans react to the expansion of coverage? How would Democrats deal with the law's consistently poor polling? Would the administration's unusual efforts to market the law continue? How much would premiums continue to rise? How many people might actually pay for the coverage they had signed up for? How many of those who got coverage were previously uninsured? And what would happen to the state-run exchanges that had stumbled or failed? In the new issue, Reason takes a look at these unanswered questions and more.