A brief history of U.S. health insurance reform

Jeff Swift
Jan 26, 2017 · 6 min read
President Obama signs Heritagecare into law. 2009. Image source.

1989 —Heritagecare is born

Conservatives propose principles of a free market alternative to a “single payer” system, including a health insurance mandate. This free market proposal is designed by the Heritage Foundation, the flagship conservative think tank that guided public policy under President Reagan (and has played a significant role in President Trump’s transition efforts). Stuart Butler, PhD, a Distinguished Fellow at the Heritage Foundation, authored Heritage’s proposal in 1989, including the following cornerstone policy:

“Mandate all households to obtain adequate insurance.”

1993 — Hillarycare loses

President Clinton tackles health insurance reform, putting Hillary Clinton in charge of reform efforts. Hillarycare has been described as “much to the left of Obamacare.” Conservative opposition to Hillarycare is fierce, with some conservative opponents offering Heritagecare as the conservative alternative. Hillarycare fails.

In 1993, in fighting “Hillarycare,” virtually every conservative saw the mandate as a less dangerous future than what Hillary was trying to do — Newt Gingrich

2000s —Heritagecare wins

Conservatives continue championing Heritagecare, complete with its insurance mandate. A Republican governor successfully passes and implements Heritagecare in a blue state, a victory proudly heralded by leading conservatives.

[K]ey parts of Romneycare were replicated by Obamacare, including some of the more controversial ones— CNBC

The core drivers of the [2009] health care act are market principles formulated by conservative economists, designed to correct structural flaws in our health insurance system — principles originally embraced by Republicans as a market alternative to the Clinton plan in the early 1990s. — J.D. Kleinke, Fellow at conservative think tank AEI

2009 — President Obama compromises

Newly-elected President Obama begins tackling health insurance reform. After tepidly supporting a single payer system during the campaign, he compromises/sells out (depending on your perspective) and proposes a hybrid plan: Heritagecare plus a “public option.”

Conservatives hate the idea of a public option. President Obama compromises (again) and abandons the public option. The final Affordable Care Act bill is essentially a nationwide implementation of Heritagecare. Conservatives hate that, too.

I would have thought — since this was an idea that had previously gotten a lot of Republican support — it would continue to get a lot of Republican support. And yet magically, the minute we said, “This is a great idea and it’s working,” the Republicans said, “This is terrible, and we don’t want to do this.” — President Obama

2015 — Heritagecare/Romneycare/Obamacare wins

Without Romneycare, I don’t think we would have Obamacare— Mitt Romney

Obamacare has done a lot of good, bit it hasn’t been perfect. Premiums have continued to rise, though studies show that they’re rising less quickly than they were previously.

According to the Kaiser/Health Research and Educational Trust studies, family premiums for employer-sponsored insurance increased by a cumulative 99 percent — basically doubling — under the eight years of Bush, while under eight years of Obama, they rose by a much more modest 59 percent (source).


In addition, while rates of Americans who are uninsured has gone down, we haven’t yet achieved universal (100%) coverage:

Source: CDC

2016 —Single payer tries again

Bernie Sanders vaguely advocates for a single payer — or “Medicare for all” — system. Donald Trump, who once supported a single payer system, promises to provide health insurance for “everybody,” and to repeal Obamacare.

2017 —Obamacare dies (?)

It’s difficult to estimate the effects of replacing Obamacare with something else because Republicans haven’t settled on a replacement yet. Proposals do exist, though. Here’s an excellent summary of five of them.

But the effects of repealing Obamacare have been fairly well documented. Here are the results:


The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate that 18,000,000 people would immediately lose health insurance coverage upon repeal, and that number would grow to 32,000,000 by 2026.


According to the CBO and JCT, premiums in the nongroup market (commonly referred to as the “individual marketplace”) would rise 20%-25% upon repeal of Obamacare. Because Obamacare has slowed premium increases in the group market (e.g. employer insurance) down (see charts above), those rates will rise even more quickly.


The CBO has estimated more than once that repealing Obamacare will result in between an increase of $353 and $474 billion in the budget deficit over the next eight years.


Because you can’t really “just keep the good parts” of Obamacare, everything would have to go. Even the popular stuff. This means insurers would be able to deny coverage to people with “pre-existing conditions.” It means insurers could decline to provide birth control (likely resulting in an increase in abortion rates). It means insurers would be allowed to enforce lifetime and annual limits, (if you cost them too much in they can just stop paying). It means insurers could drop coverage for policyholders when they get sick. There’s a whole host of other benefits and standards that would be lost, as well.


Appendix: key terms

Cost and Coverage

Our private health insurance system has two major problems: cost and coverage.

Cost: America spends more per capita on health care than any other industrialized nation. Obamacare did help slow health insurance premium increases (one part of total health costs), but hasn’t stopped them (or overall health care spending) from increasing.

Coverage: A health care system that is reliant on private health insurance will leave many people out. The exception to this is Switzerland’s private insurance system, where they have achieved universal coverage (see section on Swiss coverage halfway down the page).

Single payer

In a single payer —” Medicare for all” — system there is only one health insurance provider. It is publicly-run and has no profit motive. In other words, it’s top priority is to negotiate low rates for patients with health care providers. Proponents champion certain Medicare successes, and success from other parts of the world, as proof that single payer will work. Others disagree. Some detractors confuse the single payer insurance system with the British NHS “socialized medicine” system, in which health care providers are publicly run (e.g. hospital workers are government employees).

Private health insurance

Under Obamacare, health insurance companies are all privately run, meaning that they are all beholden to a market-based profit motive. This is why they want to restrict people with pre-existing conditions, implement lifetime caps on spending, and generally try to charge as much as possible while providing as little care as possible. They are companies, so they are required to maximize their profits. Obamacare attempts to bar them from maximizing their profits at the expense of sick people and families.

Public option

President Obama initially proposed Heritagecare with a “robust public option.” This was a compromise between single payer (where health insurance is provided by a public entity) and Heritagecare (where health insurance is provided by private entities). President Obama’s proposal called for a single publicly-run health insurance option as competition to private health insurance. The private insurers did not like this idea, and President Obama eventually compromised it away.

Jeff Swift

Written by

PhD in Communication, Rhetoric, & Digital Media. Democracy junkie. Father of three.

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