Name: Lu lianghua  Student ID：s07477

Research paper supervisor:Dr.Seku Conde

Minzu University of China

2007-2008 Academic Year

Abstract: Clinton’s medical care reform is very important in American warfare reform history. The reason why Bill Clinton wined American 1996 presidential campaign had a very close relationship with medical care reform proposed by Clinton.

Key words: Clinton’s medical care reform; background; process and content; evaluation

The Clinton’s medical care reform is very important in American warfare reform history. After researching Clinton’s medical care reform, we may know more clearly on why Clinton can be re-elected.

The background of Clinton’s medical care reform
In the mid-1990s of United States, the Social Security system had transited for 60 years .On the one hand, social welfare and security system had been rooted in the modern economy operation of the United States, and had became essential safety net for the United States’ process of modernization, on the other hand, The shortcomings of this system were also increasing.  For example, the Government, private groups and companies could not afford the medical costs, and there were a considerable part of relatively poor families and groups who lacked of the necessary health protection.

The ever-increasing health care costs

According to the Ministry of Commerce statistics, in 1991, the U.S. government's medical care and medical expenses upped to 223 billion dollars, 28.4 billion dollars more than that of 1990.At the same period, the federal budget deficit was 269.5 billion dollars, 48.1 billion dollars more than the previous year, of which 59 percent was due to the increase of health care costs.[1]

Table 1: 1950-1990, every 10 years’ situation of the rising medical costs: [2]
  The total cost (100 million dollars)  percent of the GNP  per capita costs (dollars)

1950        127                      4.4                   82
1960        269                      5.3                   146
1970        750                      7.6                   350
1980        2475                     9.4                   1049
1990        6396                     11.3                  2476

Jeremy • D • LuoSina said in his article a practical and affordable universal health care plan : "in 1970, the United States’ spending on the public and private health care was roughly equivalent to our public and private expenditure on education. In 1992, the expenses used for health care will exceed over the full cost of education - coupled with the total expenses for defense, prisons, farm subsidies, food stamps and foreign aid .The health care costs has increased twice as the rate of inflation since 1981, and has become the major expenditure of the federal government, most of the state government, many companies and millions of American families." Then he wrote:" health care spending accounted to 7 percent the output value of U.S .from 1970 to about 14 percent today, but almost no American believe that the value of health care has improved doubled. 90 percent of Americans are not satisfied with of the health-care system, which is the highest degree of dissatisfaction in developed country. Over 6000 Million Americans often do not have health insurance; 35 million Americans have no insurance. The insured families increasingly find that because of unemployed and small businesses can’t afford insurance or reduce of the welfare for company employees and retirees, their insurance are at risk. “He said." Reforming the system may be the biggest domestic initiatives for the next administration and Congress to take. The new policy which control  health insurance costs and expenditures will not only involve the most U.S. family’s health and safety, but will also affect9 million workers in a economy sector valued of 800 billion dollars.800 billion dollars is close to Britain's entire economic output. "[3]

A considerable number of families and individuals without medical insurance

According to the statistics provided by U.S. Census Bureau, , people who has no private health insurance added 1.3 million in 1990 than in 1989. Among those new people, 110 million were white, 26 percent of them were from the family with income of less than 25,000 dollars, nine percent of them lived below the poverty line; 32 percent were from families with income of more than 50,000 dollars; another 42 percent were from families with income of between 2.5-5 million dollars. All the added households without health insurance were working aged adults, a considerable number of doctors, engineers, university professors and priests did not have health insurance. It showed that many middle class would lose their medical insurance.[4] According to the statistics provided by U.S. health care Society, in 1980 ,there were 187.4 million people who had private health insurance, in 1989 dropped to 178.3 million people, 1990 reduced to 177 million people, some traditional insured people ,such as white, adult workers and high-income people, withdrew from the insured.[5]

It should be noted that among the people who did not have health insurance, many people struggled in the line of poverty .In 1991 the poor upped to 21.5 million, accounting for 1 / 5 of all those without insurance.[6] Most of them could not afford the premiums while others were unwilling to pay premiums. As to the employees and half-day workers in small shops or companies, employers were not take care of their insurance. So, as the high cost of health care circumstances, these people – who below the poverty line, or just above the poverty line became the people who had no medical insurance or lose their medical insurance, were not surprising.

The prelude to Clinton’s medical care reform

On November 20, 1991, Bill Clinton gave a speech at Georgetown University, talking about medical care reform, said: "We must have courage to have insurance reform, reducing health insurance bureaucracy in the work; we have to follow the example of other countries, Control the unnecessary abuse of process technology, and stop the price rise of drugs with three times as the inflation rate level, and force people who burden to the expenses to pay for the costs no matter how much they have to take or pay. We do not have to lower health care quality, what we need is the restructuring of the system. The central government is not responsible to control prices and provide all the people with health care, none of country did such things. "He declared that" the Clinton administration, Congress and the first year I took office, I will provide all Americans with quality, Affordable health care services. "[7]

On January 1992, Clinton's campaign Reid discussed the medical care reform programme with Clinton and his wife, and then announced their <<national health insurance reform: cutting costs, benefit plan for all>>. On September 22, 1992, Clinton's campaign, discussed new plan to defeat Bush, namely relying on market forces, reduce costs, achieve "Management competition" system in universal insurance.[8]

On November 1992 , one month after the election , the progress of Policy Research Institute ,Clinton's campaign advisor, launched a book Clinton transformation strategy ,put forward proposals for reform. Jeremy • D • Luo Sina proposed the further development of medical care reform plan. The plan included: ① every American have the opportunity and the obligation to select at least two private health plans; ②provide all Americans with medical insurance; ③the competition health care plan is subject to control of the newly established National Commission’s new rules;④ provide information to consumers and providers to determine what medical procedures and technology can produce the best results; ⑤ terminate the practice that employers who provide health benefits do not pay taxes, but relief consumer’s health care tax costs; ⑥develop standards for state medical insurance development mandatory, ban discriminatory practices.[9]

On February 17, 1993, Clinton proposed the idea in his State of the Union to implement this plan during the year. Mrs. Clinton formulated workable plan by herself. The policy plan team bargained with the U.S. medical team, and other interest groups, and finally established the reform plan in the end of August 1993. According to this plan, " hold medical care organizations (HMO)" have a lot of power, patients had to join and get diagnosis and recommendation in the organization, otherwise they had to pay for their own expense; doctors and hospitals with unsuitable acts would be removed from the medical profession; the employed and unemployed could receive a medical insurance card  from the relevant departments, which provide the maximum amount of expenditure, the Government or employers prepaid certain amount of medical expenses each year, each patient in generally take 20 percent ,annual average may not be over 1500 Dollars, each family was not more than 3,000 dollars. So the White House had to pay for 4,200 dollars for each family, 188 dollars for per person.

The process and content of Clinton’s medical care reform

On October 27, 1993, Clinton submitted a new health care reform bill to Congress, after being amended, on November 20, 1993, President Clinton submitted a medical care reform bill called Health Security Act to Congress. The bill advocated the implementation of the unified national medical insurance system, each one hold a health care card, the federal, state and local governments, employers and employees jointly burden the costs, and reform the health-care system through the establishment of health Union, the combination of medical institutions, the freedom choice of consumers and the regulative intervention of the government.

Both inside and outside of the United States Congress started a debate focus on Clinton’s health care reform plan, the Controversial issues focused on:

First, should or not establish a national health insurance system, which is a old problems proposed since Truman when he did health care reform, most of people who advocate the implementation of national health insurance system were liberal abundant, their main reasons were that: ① the federal government could manage to reduce medical costs, uniform pricing, charge reasonable fees, reduce duplication and maintain a high quality health care; ② it was good for the implementation of universal health insurance, which was already proved to be effective in the Western Europe and Canada .most of people who oppose the establishment of a national medical insurance system were the conservatives, The main reason is that: ①they doubted that  this system could not only maintain the quality of health care but also reduce medical costs; ②the model of Western Europe and Canada may not be the best option, they also faced difficulties.

Second, the Government should or not and how to interfere with medical care competition in the market. Abundant to liberals advocated the needs to reduce high medical costs, and thought that the government could not allowed the laissez-faire market competition and need to strengthen the Government's intervention, because the waste of management and third-party payment system and other issues could be addressed only through government intervention. They insisted that health care was a special market, the demand controlled by the supply, so that regarding the health service equivalent to the general merchandise was very harmful, medical services relied on non-market factors. Conservatives believed that medical and health services are nearly the same with other commodity markets, without government intervention, doctors and hospitals which were not suited to the survival could be eliminated as long as the market play the competition role, which even can lower medical costs.[10]

In fact the controversy was still on whether the government could reduce spending on medical costs and in the federal budget but maintain the excellent quality.

On February 23, 1995, Clinton submitted the "Economic Report of the President" to Congress and realized his campaign promises, that was, the nine missions launched in 1995, the seventh mission insist to realized the medical care and welfare reform. On May 17, 1995, the Senate passed the legislation and agreed Health Maintenance Organizations, HMOs expanded to 50 states. The bill named medical care choice and expand.[11]

In the mid-October 1995, the Representatives Republican leaders prepared to cut medical care items from a single omnibus bill to reduce the deficit, Clinton bargained for the health insurance for the poor and the disabled which were the provision of federal and state Funds.[12] On December 6, 1995, President Clinton rejected the budget deficit reduction omnibus bill.[13] There was still a great distance between Clinton and the Republican motion, so that health care reform plan came into difficulties.[14]

As running into snags everywhere in the circumstances, Clinton's social security reform gradually moved from health care reform to family welfare reform. Domestic reform programme get opposition from a number of governors and the Republican Party's members, many of them advocated to delete the federal project for the poor because it would reduce welfare costs rose. During the debate, the welfare plan proposed by the Republican were different from Democrats, it put the people's welfare needs first, and did not support the young pregnant woman receiving welfare, the Republicans also rejected the recommendations of the minor children family without father assistance plan, and stoped additional child benefit, the purpose was to enable the federal government's policy to promote family responsibility.

On January 25, 1994, Clinton addressed in his State of the Union that his package of welfare reform plan temporarily could not give unmarried pregnant girls subsidies. On February 1995, Clinton submitted his view on the existing welfare system in the Economic Report of the President to Congress, he thought that some people enjoyed a long-term benefits, of which 1 / 3 of women have relief of minor children of family welfare no less than two years, 1 / 4 people have custody relief of minor children without a family more than 10 years. The Reported said, the government policies’ basic starting point was to stimulate the welfare beneficiaries to work not let them live under the poverty level, for which the Government was prepared to put welfare reform legislation, that was, work and Accountability Act.[15]

On welfare reform, both within and outside the Congress launched a fierce debate and bargaining, a number of Republican governors and Representatives proposed that combined the 125 billion dollars of social welfare Expenditure mainly for low-income families each year, into eight federal grant project, when they considered the Clinton's welfare reform plan, gradually shifted to federal welfare state. These proposed welfare projects changes were as follows:[16]

eight federal grant project    the current number of projects    the current costs (1 billion dollars)
Food and nutrition (including food stamps, etc.)      10                 38.0
Cash benefits (including minor child rearing families)   7              17.2
Child care (including advanced training programme)     45              11.8
Social services (including volunteers)                 33              6.6
Child welfare and change the bad habits of children (including child support) 38  4.3
Hiring and training                               154              24.8
Housing                                        27               17.5
Medical and health                               22                5.1

Controversial issues focused on how to reduce the huge expenditure on welfare.[17]

 The debate Related to the welfare reform also involved the welfare control transferring to the states. In 1988, when Congress passed the family assistance scheme, the governor of the National Association has adopted to promote the passing of the Bill.[18] On January 31, 1996, on the National Association of governors meeting, the governors agreed that states should be more controlled over the welfare plan.[19]

 As to the impact of The welfare reform programme on the states, there were opposing ideas. Sunshine Belt senators made their opposition to welfare reform programme, they insist not determining subsidy scheme on the basis of the original plan, but on the actual needs. On August 8, the majority leader of the Congress, from the Kansas Republican Senator Bob Dole • (Bob Dole) proposed an amendment on let ting the authority had the right to limit federal welfare spending , the welfare beneficiaries had to find work within two years, And welfare benefits were restricted  to five years. This motion would save 43.5 billion dollars in five years, save 70 billion dollars in seven years. Most of them were saved from the custody of minor children family assistance, food coupons and supplementary security income, and cash for low-income elderly, blind and persons with disabilities, these projects would be cut off 10 percent.[20] On Categories grants, the state's welfare fund, family welfare income, unmarried mothers’ welfare benefits, child care, supplementary social security, non-US citizens, re-examine issues such as saving the motion, the Representatives and the Senate's motion had differences opinions. [21]

On November 13, 1995, the Republicans addressed to solve welfare reform legislation differences, and agreed to reduce 81.5 billion dollars on the project associated with the benefits in seven years .On December 21, 1995, Clinton declared: "This welfare bill includes the reduction on the cost of child welfare substantially and have a long distance from my objectives l from the warfare to work." On January 9, 1996, President Clinton rejected the "the welfare consideration Bill" (HR 4). On January 23, 1996, President Clinton delivered his State of the Union, the domestic policy emphasized on reducing the scale of government and controlling government expenditure, not focused on health care reform and welfare reform. But the National Assembly Republican leader Bob Dole condemned Clinton using the veto to protect the welfare system "every day in attacks on self-reliance and family values". In view of the general election approaching, the amendment and adoption of the welfare reform also caste a deep political overtones, in this case, everything is subject to the "needs of the general election" ,many things changed quietly, sometimes changed suddenly. On February 3, 1996, the two sides sought through the National Conference.[22] On February 6, 1996, at annual meeting in Washington, the two parties of the National Association of the governor proposed an amendment welfare bill, governors sent hope on the national welfare and medical benefits plan; it was neither Clinton nor Dole’s plan. On February 19, 1996, the government held a hearing on the recommendations of the governor. [23]On February 28, 1996, the U.S. Minister of Health and Human Services Donna E. Shalala has indicated some of the Clinton administration's view.

On April 1996, it was time for Clinton to achieve his promises to end the current welfare system. The Government had stepped up compromise not only in line with the Government, but also met the aspirations of the two parties. The two parties had agreed that welfare system needed to be amended, but on how much funds did the federal government commitment need to pay, there were controversies.

The Democratic Party had also made the greatest efforts to compromise and seek cash pay way to end the payments of poor families’ welfare beneficiaries.[24]On April 17, 1996, the Senate agreed to re-examine welfare reform bill, and the hearing continued until June 14, 1996, and proposed a final report On June 17. [25] On April 25, 1996, Wisconsin passed legislation of requiring a welfare, on May 18, President Clinton appreciated the Republican governor of Wisconsin Tommy Thomson’s plan in the radio speech. On May 19, Clinton tried to ease the Dole’s hard-line attitude on welfare reform.[26] On May 20, 1996, six state governors wrote to President Clinton, support the president’s attitude of Wisconsin, asked the president to state mandatory work requirements and time limits for welfare beneficiaries by considerable flexibility way. [27]Bill Clinton and Dole had expressed to discuss welfare reform. [28]

On July 13, 1996, Clinton gave a speech in radio and television, and said: "I decide to make the motion welfare reform into law," objectives included: ended the qualifications to receive federal welfare payments from 61 years ago, gave the states the right to determine their own plans; restrict on welfare payments for a period of five years, states had the right to repeal warfare in the earlier time and decided the new work requirements. Reduce 53 billion dollars in six years, most of them cut from the welfare cash, some food stamp benefits and legal Immigrant welfare costs received from federal assistance.[29]On July 18, 1996, the Representatives passed welfare reform motion, then, on July 23 the Senate also passed this motion.

On August 22, 1996, President Bill Clinton approval of the "welfare reform bill," in the general election eve, the formal of the bill upped to 800,000 computer characters (According to full text the author get through the Internet ). The bill ended the unlimited welfare benefits on the poor by the federal government since 1935. The time of welfare benefits provided to the majority of poor families was not exceeding five years; adults with the ability to work should participate in the work within two years when receiving welfare benefits of subsidies. Made clear restrictions on food stamps for the poor, people who had the ability to work and not bring up children could only receive food stamps in the three years; new immigrants were not eligible for food stamps in the first five years, and they were not eligible for disability benefits, either.

Evaluation on Clinton’s medical care reform
There were different opinions on the Clinton’s medical care reform.

Some political analysts believe that President Clinton changed the approach that focused on the so-called "cultural issues" but neglect of social problems as Democratic Party did. After the signing of the bill, the Democratic Party, destroyed the “culture of dependency ", and re-established an active government. They believed that Clinton was the first Democratic President who found a common affinity between white workers and black workers since President Kennedy.

Democratic Senator Daniel Patrick Moynihan, did poverty research in all his life ,believed that the test forcing welfare mothers to give up relying on welfare but to work showed that the reduction of the number of people depending on welfare was minimal. He believes that the key lied in the investment in vocational training, counseling, child care facilities and implementation of transport subsidies. From a historical point of view, vocational training programmes had failed; the number of people who had training and get jobs was extremely limited. This welfare reform may also face the same fate. The bill only talked about the reasons for the poor to work, but did not provide the poor with education, training and other necessary measures. According to the Congressional Budget Office's accounting, in the next six years, the government should provide at least 12 billion dollars in order to practice the bill.[30] Only New York City needed to spend 72 billion dollars in 2002 for this purpose, California would spend 3 billion dollars. [31]As the Bills regulated, if the state government failed to let at least half of the poor depending on welfare to work in 2002, the federal government would cut government funding to the states, so that the state government would be more difficult to maintain providing vocational training for the poor. The state government would likely prefer to accept the punishment from the federal government to actively implement the programme of letting the poor to work.

Some people believed that the government should spend more money to force welfare mothers to work to, perhaps more than the cash grant to them. The Republican welfare reform bill had an impact on the "immigrant" group. Under this bill, states had the right not to give the children of illegal immigrants’ welfare and education benefits. Over 75 years old and disabled legal immigrants would not be care in the first five years. Legal immigrants would no longer receiving food stamps, only this cost accounted for 2 / 5 of the cost-saving benefits. According to the Congressional Budget Office statistics, the elderly and the disabled against by the welfare reform bill would reach 500,000, legal immigrants will hit 900,000. 5% of people benefit from the welfare had to bear 40 per cent reduction in costs.[32] According to the research of the Urban Institute, the welfare bill would increase 2.6 million poor people, of which 1.1 million were children.[33]

Political analysts John Ralston Saul described this portrayed as such a prospect: "There is a widespread feeling that our civilization seems to be in a long-term crisis. We drift into a Cold, unfriendly, confusing sea .Those people on the water and in power are convinced that (the crisis) is the only way to reduce saving things. "[34]The welfare reform bill was against not only legal immigrants, but also the United States’ fundamental attributes.

American sociologist, pointed out that forced people relying on welfare system to engage in an occupation, in addition to the necessary training, to help people lift out of drug addiction (for many people, this was the root of poverty and single) was a very critical work. According to statistics, at least 20 percent of women relying on the welfare system were drug addicts or alcoholics. New York City spent 77.5 billion dollars annually for resettling homeless people, 77 percent for the adoption of drug addicts and alcoholic.[35] However, forcing these drug addicts to shake off drug addiction is easier said than done.

Nevertheless, Clinton signed the bill was good for the Democratic Party into the U.S. political center, and helped him win a large number of swing voters between Dole and, which was conducive to his re-election.

Bill Clinton defeated Robert Dole and wined American 1996 presidential campaign with 49 percent of the vote[36], which was sharp contrast with his public support rate of 10% in 1994.In 1994 spring, public polls showed that Clinton's support rate fell to the lowest point, only 36%[37].The rose of Clinton's support rate had a very close relationship with the Republican welfare reform proposed by Clinton on the August 22, 1996.

From a social and cultural point of view, Clinton had been able to win re-election, depended largely on all the following points:

As economic grown steadily, and the inflation rate kept stable, the domestic welfare issues became the most dissatisfied issue. Clinton seized this key issue.

Afro-Americans and Latinos who support Clinton were increasing. In the 1992 election, 82 percent of the black voters, 62 percent of Latino voters support Clinton[38], and in 1996, in the presidential election, the support rate rose to 84% and 73%[39]. In all these voters who supported Clinton, black and Latino Americans accounted for 24 percent. [40] The growth rate of Ethnic minorities’ support on Clinton could not say unrelated to Clinton’s efforts to amend the harsh Republican welfare reform plan.

President Clinton made a compromise in the crucial issue of the welfare with the Republican Party, which enabled him to win swing voters, especially women (Clinton's voter support, women accounted for 58 percent of voters)[41], and those so-called white Reagan Democrats with decline economic status.