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05.15.09

The Woman Who Killed Health Care

With health care moving up on the national agenda, Betsy McCaughey, whose magazine article helped kill the Clinton plan, is back. Democrats had better be wary, warns Benjamin Sarlin.

Backed by a surprisingly cooperative health-care industry and strong Democratic majorities in the House and Senate, President Obama and Congress are mounting an aggressive push to pass a health-care-overhaul bill within months. But Democratic lawmakers are already suffering panic attacks over potential Republican criticisms. Sen. Evan Bayh told The New York Times Thursday that he felt “unease that we did not have a strategy” to combat conservatives, leading Obama adviser David Axelrod to meet with nervous Dems and explain why 2009 would not be a grisly repeat of the 1994 fiasco.

That year stands as a cautionary tale, as Republican attacks and the infamous “Harry and Louise” ads helped kill Bill Clinton’s attempt at reform. But perhaps no one was more influential in 1994 than former New York Lt. Governor Betsy McCaughey. “No Exit,” McCaughey's article in The New Republic slamming President Clinton's health-care plan, still sends out shockwaves 15 and a half years after it came out—and provides a roadmap of criticisms Obama and his allies will have to battle.

When the dust had settled in the 1993-1994 health-care wars, Newt Gingrich singled out McCaughey's article as “the first decisive breakpoint” in the plan's support.

In a recent interview with The Daily Beast, McCaughey said she was still proud of “No Exit.” “I'm not a political expert,” she said. “My training is in constitutional analysis and I applied my training to that particular piece. I said what powers are left to you and your doctor and what authority is assumed by the federal government.”

McCaughey’s piece painted the Clinton plan as a nightmare in the making that would “prevent you from going outside the system to buy basic health coverage you think is better” and leave millions of Americans with insufficient treatment thanks to government rationing.

The core arguments were quickly adopted by conservative opponents of the health-care plan. While McCaughey was a fellow at the conservative Hudson Institute and her background was in law and not health-care policy, the fact that her analysis had run in the traditionally liberal New Republic bolstered her credibility as an objective observer. The Clinton administration put out a detailed response and noted that provisions in the bill specifically said that “nothing in this act shall be construed as prohibiting... an individual from purchasing health-care services” despite McCaughey's key assertions that patients would be prevented from paying their doctors or seeking private coverage. But the meme stuck. When the dust had settled in the 1993-1994 health-care wars, Newt Gingrich singled out McCaughey's article as “the first decisive breakpoint” in the plan's support.

After bursting onto the national political scene, McCaughey has enjoyed a tumultuous political career. In 1994, she successfully ran for lieutenant governor in New York on the Republican ticket only to later break with Governor George Pataki, change her party affiliation to Democrat, and run a losing campaign for governor in 1998. In recent months, she has resurfaced in the press with a series of op-eds and TV appearances attacking President Obama's health policy with the same nitpicking approach that powered the GOP to victory against Clinton.

While Clinton's health-care plan has long disappeared, however, the debate over McCaughey's article never ended, and proponents of universal coverage have spent 15 years preparing their counterarguments for an eventual rematch.

“No Exit” ended up winning the National Magazine Award, sparking immediate attacks on McCaughey even from TNR colleagues like Mickey Kaus over its accuracy and objectivity. The controversy has refused to die, even more than a decade later. In 2006, the incoming editor of The New Republic, Franklin Foer, used his first issue at the helm to apologize to readers for running the article. The ongoing battle over “No Exit” led fellow contributor Andrew Sullivan, who edited TNR when McCaughey's piece ran, to write that while he was “aware of the piece's flaws,” he “nonetheless was comfortable running it as a provocation to debate.” And just earlier this year, James Fallows wrote in his Atlantic Monthly blog that McCaughey deserved a career-achievement award for "most destructive effect on public discourse by a single person."

McCaughey said she had not read TNR's apology, but that she assumed it was “politically motivated.”

“They asked me to write the piece and they were proud of it at the time,” McCaughey said. “I stand by 'No Exit.' It won a National Magazine Award, which is a good measure of its quality. I put the page numbers of the legislation next to each paragraph and my opponents didn't. I was inviting an open and thorough analysis of that legislation”

Since 1994, however, the problems described by President Clinton—rising health-insurance costs, a failure to cover uninsured Americans—have notably intensified. The number of uninsured stands at roughly 47 million, while family premiums have more than doubled in the last decade alone. One Harvard study found that more than 54.5 percent of personal bankruptcy cases were related to medical costs. Is it possible that the Clinton plan, however flawed, might have been preferable given what happened in the 15 years since its failure?

Not so, says McCaughey. While health-care costs have risen far above inflation, she says they are still in line with other Western countries' rates regardless of their health-care plans.

“Even though there's a claim now that the increases in health spending have reached a crisis point, the data doesn't support that,” she said. “In fact it's increasing the same as previous decades and slower than Europe.”

But Americans still easily spend the highest percentage of their national income on health care compared to other Western countries. McCaughey acknowledged that rising costs remain problematic for some demographics.

“What is true is that the increase in health-care costs for the lowest income groups is a burden,” McCaughey said. “I'd like to help relieve that. You know what my philosophy is—fix what’s broken and leave the rest alone.”

To this end, McCaughey suggests that lower-middle-class Americans who don't qualify for Medicaid but can't afford health care be issued government debit cards to be used to purchase private insurance.

“They can buy whatever products they want, just like with food stamps,” she said. “Consumers in the marketplace but getting help from the government to buy what they need. That's a good model for purchasing—especially temporary coverage.”

But such a massive infusion of cash into the system, besides exploding the deficit, would surely send prices shooting through the roof even further. It is here that some faith is required, according to McCaughey, who predicts that health-care spending will slow in the coming decades as newer, more cost-efficient technologies arise.

“They will become more cost-effective,” she said. “Let's not be short-sighted.”

Today, McCaughey runs the Committee to Reduce Infection Deaths, an advocacy group she founded in 2005. But as an ascendant Democratic majority and a popular president launch a renewed push at far-reaching health reform, McCaughey says she will not stay on the sidelines. Recently she made headlines by attacking a provision in Obama's stimulus plan that she said would lead to rationed health care. While Factcheck.org concluded that her fears were mostly either already in place under President Bush or based on speculation, McCaughey said she stood by her words and would continue to challenge the administration on health care without hesitation. Republican or Democrat, politician or journalist, her one-woman battle continues, striking terror in hearts of traumatized reformers everywhere.

Benjamin Sarlin is a reporter for The Daily Beast. He previously covered New York City politics for The New York Sun and has worked for talkingpointsmemo.com.