Charles Tasnadi/Associated Press
In 1988, President Ronald Reagan had grown wary of the Medicare Catastrophic Coverage Act, but his vice president, George Bush, saw political advantage in it.
WASHINGTON — Angry Americans voice outrage at being asked to pay more for health coverage. Lawmakers and the White House say the public just doesn't appreciate the benefits of the new health law. Opponents clamor for repeal before the program fully kicks in.
The Times would like to hear from Americans who have begun to sign up for health care under the Affordable Care Act.
CBS
Angry older voters stormed a car carrying Representative Dan Rostenkowski.
The year was 1989, and the law was the Medicare Catastrophic Coverage Act, which was supposed to protect older Americans from bankruptcy due to medical bills. Instead it became a catastrophe for Democratic and Republican lawmakers, who learned the hard way that many older Americans did not want to be helped in that particular way.
Seventeen months after President Ronald Reagan signed the measure with Rose Garden fanfare, a series of miscalculations and missteps in passing the law became painfully evident, and it was unceremoniously stricken from the books by lawmakers who could not see its demise come quickly enough.
The tortured history of the catastrophic-care law is a cautionary tale in the context of the struggle over the new health law, the Affordable Care Act. It illustrates the political and policy hazards of presenting sweeping health system changes to consumers who might not be prepared for them. And it provides a rare example of lawmakers who were willing to jettison a big piece of social policy legislation when the political risks became too grave.
"It has often been said that if you get an entitlement on the books, you can never get rid of it," said Bill Archer, who pushed to repeal the 1988 law as a senior Republican, from Texas, on the House Ways and Means Committee. "That is an example of a time we did get rid of it."
Backers of the Affordable Care Act say comparisons to the catastrophic-care debacle are flawed. They say that the new law fills a major health insurance void and that despite its current problems it will never meet the same fate as that undertaking in 1988.
"It is enormously different," said Ron Pollack, the executive director of Families USA, a liberal consumer advocacy group, who supported both the new health law and the catastrophic-care program. "You had a benefit totally paid for by 40 percent of the Medicare beneficiaries, who overwhelmingly thought there was not a benefit there for them. It is understandable they were upset."
Others involved with the passage and repeal of the Medicare Catastrophic Coverage Act see clear parallels with the current situation, in which a very vocal segment that views itself as harmed by the new law has joined with highly organized political operations to rally opposition to it.
"When I saw this massive thing, I said, 'Boy, if this is anything like catastrophic, they are going to be in trouble,' " said Brian J. Donnelly, who led the 1989 repeal effort as a Massachusetts Democrat on the Ways and Means Committee. "It is a very good analogy."
The concept of expanding Medicare originated in the Reagan administration in 1986 under Otis R. Bowen, the secretary of health and human services, who proposed a modest change to add an annual premium while capping annual out-of-pocket costs for co-payments and hospitalization at $2,000. Politically, Republicans were looking for a way to offset damage from a proposal to delay Social Security increases.
Democrats, who controlled Congress, were not about to be outbid by Reagan when it came to a core constituency like retirees. As the Bowen plan moved through the House and the Senate, new benefits were tacked on, including premium protection for low-income Americans, help for spouses of nursing home residents and some limited prescription drug coverage, driving up the cost of the program.
With the White House insisting that Medicare recipients pay the tab, the sponsors devised a sliding payment scale based on income that the Internal Revenue Service would collect. That approach shares some DNA with the current law, since the I.R.S. is responsible for imposing penalties against people who do not buy insurance and for administering other aspects of the Affordable Care Act.
Wary of being accused of instituting a new tax, backers of the catastrophic-care bill chose to call the payment of up to $800 for individuals and $1,600 for couples a supplemental premium.
Aides to Reagan grew wary of the final product — approved 328 to 72 in the House and 86 to 11 in the Senate in the summer of 1988 — and pondered a veto. But Vice President George Bush, running for the top job that year, saw the measure as a potential political advantage, and it became law.
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