Health Care Legislation: Is It Like Social Security and Medicare?

Several more polls have come out indicating that majority of the public continues to oppose the recently passed health care legislation, a further indication that the Obama-led post-passage publicity blitz has not turned public opinion around on this issue.  Instead, it appears that public opposition has solidified at about 52%, with support hovering 5-10% below that, depending on the poll.

Despite the public opposition, supporters of the health care bill have comforted themselves by noting that previous efforts to expand the social welfare safety net, particularly with passage of the Social Security and Medicare programs, also engendered highly divisive debates but that, once enacted, both pieces of legislation developed deep bipartisan support. As John Dingell, a Democrat representative from Michigan who has long advocated for health care reform told a radio audience: “But remember, the same charges were made by the same people about Social Security and Medicare, and those have worked out to be two of the great and most popular social programs in the history of the country or anywhere else.”

The problem with this argument is that the historical analogies aren’t quite appropriate.

To begin, although debate on both Social Security legislation in 1935 and on Medicare in 1964-65 was heated, in the end both pieces of legislation passed quickly and with bipartisan congressional support. According to the Social Security website, “The Ways & Means Committee Report on the Social Security Act was introduced in the House on April 4, 1935 and debate began on April 11th. After several days of debate, the bill was passed in the House on April 19, 1935 by a vote of 372 yeas, 33 nays, 2 present, and 25 not voting. (This vote took place immediately followed a vote to recommit the bill to the Committee, which failed on a vote of Yea: 149; Nay: 253; Present: 1; and Not Voting: 29.)

The bill was reported out by the Senate Finance Committee on May 13, 1935 and introduced in the Senate on June 12th. The debate lasted until June 19th, when the Social Security Act was passed by a vote of 77 yeas, 6 nays, and 12 not voting.”  In the House 88 Republicans supported the bill while 15 opposed it – the same number of Democrats in opposition, as it turns out. In the Senate, 16 Republicans supported Social Security while only 5 opposed the bill. The conference bill reconciling the House and Senate versions of the legislation was then passed on a voice vote due to the large bipartisan support.

Moreover, the politics of health care differ from that of social security. In lobbying for the social security legislation, FDR deliberately misrepresented the program as an “insurance” plan; as he described it, workers put in a portion of their earnings into the social security program which they could then retrieve when they retired.  In fact, workers do not get their money back when they retire – the program is instead an intergenerational income transfer plan, whereby today’s workers fund current retirees. (That’s why, with a growing elderly population and dwindling workforce, the program’s current spending rate can’t continue without some modifications of revenue sources and/or eligibility requirements.) Moreover, because the program is funded through a “hidden” payroll tax, people tend not to feel the fiscal pain of contributing as acutely as they would if they paid a separate tax to fund social security.  Because the redistributive impact of the financing is hidden, and because everyone contributes to the program and receives benefits, Social Security has broad and deep support, as George Bush discovered when he tried to alter the funding mechanism in 2005.   It’s not clear to me that health care costs will be so easily disguised, nor that the legislation will be viewed as a middle-class entitlement.

Medicare had similar bipartisan support, passing the Senate by a vote of 70-24 and the House by 307 to 116.  And, as with Social Security, a majority of Republicans in the House supported the bill, by 70-68. In the Senate, opposition among Republicans was stronger, but nonetheless Medicare received 13 Republican votes in favor versus 17 against.

As with Social Security, it is funded by a somewhat hidden payroll tax, and everyone is eligible to access its benefits.

Moreover, according to the Gallup poll, 65% of the public approved of the Medicare legislation in January, 1965.  (I don’t have similar public opinion polling data on Social Security from 1935, and am not sure it even exists.)

I don’t need to remind you that the recently passed health care legislation received nary a Republican vote in favor, and that it has never achieved even 50% support among the public. The following table compares the votes on the three pieces of legislation:

More problematic, however, is that the politics of health care is likely to differ from that of Social Security or Medicare.  In fact, most Americans currently have health care insurance, and roughly 80% of them are largely satisfied with that coverage.  The worry for supporters, like Dingell, of the health care bill is that Americans will perceive it as imposing costs on them to expand health insurance coverage to an additional 30 million people, some of whom voluntarily choose not to be insured.  Moreover, the costs of health care reform depend in part on “reforming” Medicare – a program with strong public support.  If the public perceives that the price of health insurance means a reduction in Medicare services, or declining participation by hospitals and doctors, opposition to the health care plan will grow.  A similar backlash could develop when taxes on so-called “Cadillac” health insurance plans are levied to fund the health care reform program.

For all these reasons, I think that efforts to compare health care with Medicare or Social Security are not very useful historical analogies – their politics and substantive components are very different.

Instead, when we think about the possibility of repealing health care, the historical analogy that may be a better – although by no means perfect – fit is welfare reform.  In 1996, the Republican-controlled Congress passed and Democrat President Bill Clinton signed into law a bill that replaced the decades-old Aid to Families with Dependent Children (AFDC) program with a new block grant program to the states that imposed work requirements on aid recipients and made major cuts to food stamps and assistance to legal immigrants. The legislation was bitterly opposed by liberals who saw it a racially-tinged attack on the poor, but Clinton, after long internal debate, ultimately supported the welfare reform bill.  He did so in part because of Republican threats to pass a more draconian bill, but also because of public opposition to the AFDC welfare program and because the cost of the program (although actually quite small compared to Social Security or Medicare) was viewed as unacceptable in an era of budget deficits.  (Incidentally, most policy specialists now view welfare reform as largely an effective program).

To be sure, this analogy has its own flaws: health care is likely to be much more costly than welfare reform but it is also possible – if the CBO projections hold – that it will not adversely impact the deficit.  And it’s not clear to me that health insurance is viewed in the same way by the public as “welfare” – for many people, health insurance is a fundamental entitlement in a modern industrialized society, whereas “welfare” continues to be viewed by some as a government “handout” to the “undeserving” poor.

Whether health care legislation faces a fate similar to the AFDC program, I think, will depend on several factors:  its budgetary implications, the impact on Medicare, the degree to which the general public views the program as primarily benefiting a “less deserving” subset of the population as opposed to a middle-class entitlement, and whether Republicans – if they regain congressional majorities – can craft a more palatable alternative health reform proposal.  If so, we may see an effort to “mend” health care legislation, rather than to “end” it.