Charles Dharapak / Associated Press

Negotiation Lessons from the Passage of the ACA

December 5, 2016

Given the outcome of the recent Presidential election, now is a good time to reflect on the lessons learned from the passage of the Affordable Care Act (ACA), aka Obamacare. President-elect Trump would be well served to review these lessons before attempting to repeal and/or replace the ACA. Likewise, supporters of universal health care can benefit from examining the successes and failures in these negotiations. Winning the battle for public opinion, much less future elections, will be difficult without understanding what went wrong during and after the bill’s passage. These negotiations contain lessons for all of us – especially the importance of letting your counterparts have input in negotiations and finding a way for them to save face.

Cursory research on this topic would give the misleading impression that were no negotiations - that Democrats simply took advantage of a small window of opportunity to push through an unfinished bill that had not been fully vetted by either party in Congress. The full story is much more nuanced. Launching the ACA in its window of opportunity was no fluke.

Obama and his team were well aware that the previous century had been littered with failed health care reform efforts led by Theodore Roosevelt, Franklin D. Roosevelt, Harry Truman, Richard Nixon, Jimmy Carter, and most recently, Bill Clinton. Despite periodic outrage over rising health care costs and the large pool of uninsured, no president from either party had been able to enact comprehensive reform. Johnathan Oberlander writes in his piece "Long Time Coming: Why Health Reform Finally Passed" for Health Affairs

Every time reformers got their hopes up, their plans ran into an array of formidable obstacles, including fierce opposition from stakeholders such as the American Medical Association, business, and the insurance industry; fragmented political institutions that made passing health care legislation, even when a president’s party controlled Congress, exceedingly difficult; and Americans’ skepticism about government, which enabled opponents to scare the public with the specter of socialized medicine and tales of horrors in foreign health systems. Only Lyndon Johnson, with the 1965 enactment of Medicare and Medicaid, successfully traversed this gauntlet. But Johnson did so by dramatically narrowing the scope of reform.

In contrast to President Clinton, Obama tried to push legislation through quickly (at least at first), and did not foist a detailed plan on Congress. Obama also sought to proactively forestall opposition from constituent groups by exempting small businesses, letting people keep their current plan if they desired, and avoiding price controls. Obama successfully appealed to industry stakeholders who feared being shut out of the process if they did not participate.

After failing to entice any Republicans to cooperate in the ACA drafting process, Obama focused his negotiation efforts within his own party. To garner support from conservative Democrats, Obama was willing to abandon the single-payer option favored by many in his party. Obamacare, in fact, closely resembles the health care plan enacted by Republican Governor Mitt Romney in Massachusetts. In short, Obama pursued an approach that was flexible, pragmatic, and inclusive of parties that were willing to engage.

Nonetheless, not all of Obama's victory can be explained by his negotiation strategies; luck played a big part. The health care bill was rescued by Senator Arlen Specter of Pennsylvania, who switched parties in April of 2009 to ensure that the Senate Democrats had the 60 filibuster-proof votes to pass the ACA.  However, fate intervened, and Democratic Senator Ted Kennedy unexpectedly died that summer. He was ultimately replaced not by a Democrat as most assumed, but by Republican Scott Brown, who ran on an anti-Obamacare platform and rode a wave of public concern about costs and fear of “death panels” to victory. Had Senate Majority Leader Harry Reid not been able to corral his diverse caucus before Senator Brown was sworn in, the ACA would never have passed the Senate.

Passage through the Senate did not assure victory. The Senate’s version was intended to be a first draft that would be revised during reconciliation with the House’s bill. Once it became clear that the Senate had lost its filibuster-proof majority, House Majority Leader Nancy Pelosi had to strong-arm her caucus into accepting the preliminary Senate version of the ACA without changes. With Obama’s support, Pelosi then used the tool of budget reconciliation to pass the final bill; under budget reconciliation, the ACA only needed only 51 votes to clear the Senate, not 60 votes.

In hindsight, Obama made several strategic errors as the ACA moved through Congress that could ultimately lead to the program’s undoing. First, he did not keep applying pressure to move the bill swiftly through Congress. Had reconciliation started earlier, perhaps the final product would have been much more polished and workable. Obama may also have erred with insufficient preparation. While it was a good idea to let Congress have substantial input, providing them with more developed options might have helped them craft a better bill earlier - perhaps Obama was too hands-off. Despite initial efforts, he did not find a way to let the other side contribute and save face. Republican anger has still not dissipated, and the Republican Party now controls both houses of Congress and the Presidency.

Contact Information

Fels Institute of Government
University of Pennsylvania
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Philadelphia, PA 19104

Phone: (215) 898-2600
Fax: (215) 746-2829

felsinstitute@sas.upenn.edu