Media reports that Obamacare is near death are premature. And, if the past is any guide, flat out wrong. It is possible for the Administration to lose politically in pushing its federal takeover of health care, and yet win the policy battle.

Consider the fate of Clintoncare bill of the 1990s. This similarity is not at all a good thing for conservatives. In fact, President Clinton, on an incremental basis, quietly and effectively beat the tar out of hapless congressional Republicans on health care. Unnoticed by a public hostile to the Clinton bill, and possibly even many members of Congress who should have known better, several provisions of President Bill Clinton’s health care reform package were passed by a Republican Congress. It was proof that on health policy Congressional Republicans often did not know what they were doing in the years following the collapse of the Clinton health bill on the floor of the Senate in the fall of 1994. Likewise, Obamacare policies could still become law through this same incremental approach, buried in different bills or legislative vehicles.

A Heritage Foundation paper(pdf) written by Carrie Gavora, a very perceptive analyst, in 1998 outlined the several ways in which Congress later moved the country closer to President Clinton’s vision of greater federal control over health care:

  • Federally-Mandated Benefits. The Clinton plan sought to federally mandate benefits packages and their frequency of use through a newly created National Health Board to oversee changes. Congress later mandated benefits, first in 1996 by setting requirements for maternity stay benefits and mental health parity, and then again in the Balanced Budget Act of 1997 by increasing the requirements of the Medicare basic benefits package.
  • Centralized Purchasing Authority. The Clinton plan would have created regional health alliances, eerily similar to the heavily federally-regulated health insurance exchanges proposed by Obama and congressional leaders today. In implementing KidCare, a program to extend insurance to low income children, the federal government provided funds to the states, rather than directly to families. Thus the states, not families, were given purchasing power of health insurance, with federal oversight. The end result was the State Children’s Health Insurance Program, SCHIP, now greatly expanded and crowding out the private health insurance coverage of children in working families. Some legacy.
  • Federal Regulation of Insurance. Clintoncare would have mandated guaranteed issue (insurance companies can’t deny coverage), community rating (everyone pays the same, regardless of age or health status), and would have prohibited insurers from canceling policies under any circumstance. Many states implemented these policies after the quiet death of Clintoncare on the Senate floor in 1994. In addition, the Health Insurance Portability and Accountability Act ( HIPAA) created guaranteed issue, guarantee renewal, and limits on pre-existing conditions for group-to-group and group-to-individual changes in coverage. The aim was to create “portability” in health insurance, but real portability only exists when persons can own and control their health insurance coverage and take it with them from job to job, like other types of insurance. That didn’t happen, of course; it was never intended to happen.
  • Regulation of Doctor-Patient Relationship. Clintoncare would have solidified third party control over payment for medical services. A doctor would have been able to enter into a private contract with a patient, but the doctor would not have been able to do so as a participant in the federally created regional alliances where health insurance (mostly managed care), which effectively would cancel any private contracting possibility between doctors and patients. With the enactment of Section 4507 of the Balanced Budget Act of 1997, however, the Clinton Administration won a major policy victory, after threatening to veto the entire bill if it did not get its way on Medicare private contracting. The new law provided that a doctor could contract privately with a Medicare patient if and only if the doctor gave up the rest of his Medicare practice for two years, signing an affidavit to that effect and sending it to the Secretary of HHS. It was the first time in American history that Congress imposed a statutory obstacle on the doctor-patient relationship. It happened only because of Republican congressional cooperation, and the surrender of the Republican congressional leadership to the veto threats of the Clinton Administration.
  • Federal Data Collection. Clintoncare would have allowed federal agencies to collect and use health records, from clinical encounters to financial transactions, for a broad array of usages. Republicans in Congress strongly opposed such provisions at the time of the debate on the Clinton Plan. But, with the enactment of HIPAA in 1966, Congress gave the federal government the ability to set standards for health information transactions and the use of personally identifiable health care information.
  • Expansion of Federal Audits and Investigations of Doctors and Hospitals. Clintoncare would have increased federal oversight and control of medical practices by expanding the range of auditing and federal investigations of health programs and doctors and hospitals. As a general matter, the Clinton bill was a vehicle for federal coercion, and chock full of fines, penalties and jail terms for persons who would not comply with its provisions. But, once again, the provisions enacted through HIPAA with regards to this were practically identical to those in the Clinton bill. HIPAA, of course, created a fraud and abuse control program and established new fines and penalties for doctors.
  • Federal Regulation of Quality and Consumer Protections. Clintoncare would have created a new federal program to evaluate quality and effectiveness of health care plans and services. During the late nineties, several types of programs were proposed by lawmakers to set federal health plan quality standards. The most ambitious was the ill fated Patients Bill of Rights bills, which went well beyond rectifying abuses of managed care and became vehicles to centralize federal control over the insurance markets

Clintoncare was a political failure, but incrementally it became a policy success. Even though President Clinton was politically defeated in the first midterm elections, he still controlled the policy agenda over health care. During the 1990s, the Congressional Republicans continued to cede the health policy initiative to the Administration that they had soundly defeated in the 1994 elections.

American taxpayers should understand that President Obama has already secured much more of his health policy agenda than President Clinton achieved in 1994 during the early stage of the first national health care debate. Obama’s major expansion of the State Children’s Health Insurance Program(SCHIP) was enacted almost immediately last year. And his proposals for major Medicaid expansion, a federal council for comparative research effectiveness and a federal infrastructure for health information technology were also embodied in last year’s big Stimulus bill. That’s lightning speed by conventional Washington standards.

The lesson is simple. If conservatives do not frame the debate and seize the offensive, outlining a compelling and consequential health policy agenda, they can and will reap the result: a repeat of the incremental policy losses of the 1990s, which have contributed to the situation America finds itself in today. The fact that Obamacare, in its House and Senate versions, is hugely unpopular is satisfying, but it is not enough. Political power abhors a vacuum. As Gavora writes, “The acid test for any proposal…should be whether it would allow individuals and families—not government or employers—to make their own health care decisions. Health care policies that strengthen the power of government…create new levels of bureaucratic control and help accomplish the visions of the original Clinton health plan.”  Congress must start over again. It should take a step by step approach on the road to expanding personal freedom, choice and real competition in the health care sector of the economy. Stopping and waiting for an incremental federal takeover of health care is not an option.

Co-authored by Kathryn Nix.