Dead center

Sen. Max Baucus, health care reform and the future of compromise



On the morning of Thurs., June 28, Montana Sen. Max Baucus was in his Washington, D.C., office when the U.S. Supreme Court ruled on the Patient Protection and Affordable Care Act. Baucus, the law's architect, had been too busy to walk the couple of blocks and hear the decision in person, so an aide popped in and told him the news: the law stood.

Baucus, who is 70 and has been in the Senate for 33 years, had worked for years on health care reform, Democrats for decades. Yet he didn't pump his fist or high-five anyone. He says he's learned to temper excitement and disappointment, referring to a passage in Ecclesiastes that he paraphrases this way: "It's never as good as it seems, and it's never as bad as it seems."

That's an apt credo for a man who's made a career of deftly walking the line between liberalism and conservatism, maddening and delighting the left and right, often at the same time—including, especially, on health care reform.

Baucus has been called "a corporate shill" by the left for taking money from the health insurance industry, "a socialist" by the right for ushering through Congress near-universal, government-mandated health coverage. He's neither. Rather, he's a centrist dealmaker—which makes him an endangered species in D.C. these days.

It's Aug. 7, and Baucus is paraphrasing that scripture at a table in a restaurant at the Muralt's truck stop just west of Missoula. His brow below his messy gray hair still shines after spending a hot morning wielding a nail gun at a low-income homebuilding project, one of the first stops on his tour through Montana during the Senate's August recess. He's wearing jeans and a short-sleeve, button-down Patagonia shirt, and holds a lemon-lime Gatorade he just bought from the adjacent convenience store, where the clerk didn't appear to recognize him.

In fact, Baucus looks like he could be a convenience store manager, or some variety of mid-level bureaucrat, belying that he's the chair of the Senate Finance Committee, one of the most powerful posts in the federal government. He's unassuming, in stark contrast to, say, Montana Gov. Brian Schweitzer, who is sometimes excessively folksy.

Sitting in the truck stop restaurant, I ask Baucus, who has a law degree from Stanford, about the Supreme Court's ruling on ACA.

When he listened to the oral arguments before the court in March, he says, Solicitor General Donald Verrilli mentioned him by name, telling the justices that on the Senate floor, Baucus had defended the penalty assessed on Americans who forgo health insurance as an "exercise of the taxing power."

He perked up when he heard that, he says, thinking, "Oh, that's me!"—just as though he wasn't a key figure in the debate over the law.

As it turned out, Verrilli and Baucus were onto something, if unintentionally. The Obama administration wasn't arguing that the Supreme Court should uphold the Affordable Care Act because of Congress's taxing power. Instead, it was all about the commerce clause, the constitutional power to regulate commerce among the states. Baucus "fully expected the commerce clause to be the rationale," he says. Instead, Chief Justice John Roberts wrote that penalizing those who choose to go without health insurance "is within Congress's power to tax."

"I frankly think of it as a little convoluted," Baucus says of the reasoning. "But we'll take it. In our form of government, the Constitution is what the court says it is."

Now, four years after Baucus introduced the foundation of "Obamacare," an 89-page white paper outlining how the country could cover 45 million uninsured citizens and try to rein in soaring health care costs, he's eager to move past the partisan battle that the legislation stoked.

"Congress has enacted health care reform," he says. "The president signed the bill. And the Supreme Court's upheld it. It's here. It's not going to be overturned."

The prescription

Baucus can talk at great length about ACA. At the truck stop, he doesn't pause once to sip his Gatorade over the span of 30 minutes.

A week earlier there'd been a milestone in the law's implementation. On Aug. 1, it began requiring insurance companies to cover preventative services for women at no additional cost, including annual well-woman visits, domestic violence screening and contraceptive education and counseling.

Baucus's eyes widen as he reels off numbers: About 140,000 women in Montana have insurance plans that will cover such services. Nationally, it's about 47 million women, according to the U.S. Department of Health and Human Services. Once Baucus gets going, he's like an infomercial pitchman: "And that's not all!"

He ticks of a list of the law's benefits—its requirement that insurance companies cover preexisting conditions, its prohibition of lifetime benefit limits, its clause that allows parents to keep their children on their policies until the children turn 26. "Add to that the seniors who are finding they're getting a better break on prescriptions drugs than before," he says. "That's in this bill."

Baucus's staff calculates that as of July, more than 13,000 Montana seniors on Medicare were able to cut their brand-name prescription drug costs in half, saving them an average of $621 apiece.

Then Baucus explains a critical measure in the law called the "minimum medical loss ratio." If there's one problem this law has had since its passage, it's that its many parts are hard to grasp.

"Basically," Baucus says, "insurance companies have been taking too many of their premium dollars and spending it on themselves and not enough on health care benefits."

The law requires that insurance companies spend 80 percent of customers' premiums on patient care or give them a rebate. As of Aug. 1, more than 25,000 Montanans were due a check averaging $194, a total of $2.6 million. "That's a pretty big deal, when they send you a check, not a bill," he says.

Yet the law is still meeting stiff opposition in some states. Take its state-based health insurance exchanges, which will be operational by 2014. Baucus likens them to online marketplaces such as Orbitz and Travelocity.

Last year when the Montana Legislature was in session, the Republican-dominated House Business and Labor Committee killed a bill that would have created a Montana health insurance exchange. Rep. Edward Greef, a Republican from Florence and committee member, chalked that up to an "overriding sense of confusion." The committee, Greef said, figured that "if the act gets repealed or is unconstitutional, we won't have to deal with this."

Now the U.S. Department of Health and Human Services will implement Montana's exchange, assuring more federal intervention in the state's health insurance market than if the legislature had passed the bill—the very thing, it appeared, that many Republican lawmakers wished to avoid.

"We lose a lot of decision-making authority over the exchange," said Lucas Hamilton, spokesperson for Montana insurance commissioner Monica Lindeen, shortly after the Supreme Court ruling. "We know our market better, we live here, we actually purchase these policies ourselves."

As of Aug. 24, only 14 states and the District of Columbia had moved to establish state-based health insurance exchanges, according to the Center on Budget and Policy Priorities. Exchange legislation had failed in 27 states and bills were pending in six.

ACA's Medicaid expansion has been a tough sell, too. The law originally required that states expand Medicaid to cover everyone who earns up to 133 percent of the federal poverty level. In return, the feds guaranteed full reimbursement from 2014 through 2016, then gradually stepping down its share to 90 percent and remaining at that level thereafter. But the Supreme Court ruled that the federal government can't force states to participate in Medicaid expansion.

Gov. Schweitzer, for one, has been critical of the Medicaid expansion, worried that it could cost the state tens of millions of dollars a year. "Unlike the federal government, Montana can't just print money," he's said. But it will be Montana's next governor and its next legislature that decide.

Baucus insists that the Medicaid expansion is "wise" and "a good deal." As it happens, his view is echoed in a recent report by The Harvard Law School Center for Health Law and Policy Innovation, which argues that expanding Medicaid up to 133 percent of the federal poverty level "is in every state's interest," a position based on "strong empirical evidence that 'opting out' of expansion will have many negative implications" for health outcomes and state fiscal stability.

The report gauged where each state stands, finding that, as of mid July, 20 state governors had made public statements that were supportive or "seemingly supportive" of Medicaid expansion, with Montana being among the 12 undecideds.

Baucus laments that many of the Affordable Care Act's measures are not well understood or lack broad support. The measures' complexities haven't helped, but the greatest challenge has been overcoming Republicans characterizing the law as socialistic, even though the party's past proposals embraced key elements in the law. When Obama backed these centrist ideas—such as the state-based exchanges and insurance mandate—Republicans turned against them.

Political scientist Thomas Mann, a senior fellow at the Brookings Institution, said in a recent Columbia Journalism Review Q&A that the media "failed to inform the public of the disingenuousness of the Republican opposition and the inaccuracy of much of the rhetoric leveled against the Affordable Care Act. It was safer to cover the politics of health reform and avoid making judgments that were tougher on one party than the other."

Making the situation more difficult, Baucus says, are partisan conservative bloggers and other pundits—"paid political hacks," he calls them—who he contends are propagating "a lot of negative misinformation," such as that the law will add trillions of dollars to the deficit, when the Congeressional Budget Office has projected that it will reduce the deficit.

But now that the Supreme Court has upheld the law, he says, "Americans are going to start taking another look, and saying, 'Gee, there may be a lot more here than we realized.'"

Polls conducted after the ruling suggest the law is becoming slightly more popular, but they still show a country fairly evenly split over President Obama's signature domestic achievement.

"Regrettably, there's going to be some background noise" from the law's opponents "up through the election," Baucus says. "But once the election's over, I think a lot of these attacks on Obamacare are going to dissipate because those who are making them, in my judgment, are motivated by political purposes, not by substance. There's a lot of misinformation being disseminated."

And come next year?

"Those who are working so hard against it will find that the wind is starting to come out of their sail," he says. "That's my hope. It's also my expectation."

Breaking new ground

The students at Missoula's Lowell Elementary School, on the Westside, surely would shrug at the mention of Medicaid expansion or medical loss ratios, but this fall they'll watch out their classroom windows as a new health clinic rises on a patch of ground between the school and playground. It will be Missoula's most concrete benefit of federal health care reform—a school-based clinic that will provide primary care and dental and behavioral health services to Lowell students and their families.

Max Baucus, chairman of the Senate Finance Committee, sought bipartisan support for the Affordable Care Act, but ultimately couldn’t wrangle a single Republican vote. - PHOTO COURTESY OF SEN. MAX BAUCUS
  • Photo courtesy of Sen. Max Baucus
  • Max Baucus, chairman of the Senate Finance Committee, sought bipartisan support for the Affordable Care Act, but ultimately couldn’t wrangle a single Republican vote.

A program of the Affordable Care Act gave Missoula's Partnership Health Center $500,000 last year to build the one-story, 2,500-square-foot clinic, the first of its kind in Montana. It's designed to look like neighboring bungalows. Building crews will break ground any day.

Lowell School is in the center of one of Missoula's poorest neighborhoods. More than a quarter of its students qualify for free or discounted lunch, and dozens are classified as homeless. That demographic is largely why Partnership Health Center chose to build the clinic there. As with all of PHC's services, it will provide health care on an income-based sliding scale.

According to the National Assembly on School-Based Health Care, school-based clinics have been found to significantly increase student access to health care, reducing emergency room visits and Medicaid expenditures while lowering rates of student absenteeism and tardiness. Students are more likely to use the mental health services, leading to fewer disciplinary problems. All of that helps foster academic success. PHC Executive Director Kim Mansch calls it "a model that has demonstrated good health outcomes, but also good education outcomes."

You probably won't find any Affordable Care Act critics inside Partnership Health Center, which is a non-profit, quasi-governmental community health center in downtown Missoula, on Alder Street. Mansch uses the word "enormous" several times as she describes the effect the law's already had on it. The Lowell School clinic, which will be staffed by PHC providers, is just the beginning, she says.

Before the school grant, PHC received $570,000 through the health care act to begin renovating downtown Missoula's historic Creamery building on Railroad Street, which the center now occupies. That resulted in the doubling of the center's dental service capacity.

But the big boon came in the form of a $5.5 million ACA grant in May, which is allowing PHC to finish remodeling the Creamery building and add an entirely new wing. That building will also house a new medical residency program.

Montana ranks last in the country in the number of resident medical students trained in primary care, Mansch points out. The state doesn't have a medical school and its only residency program is in Billings. PHC is partnering with the University of Montana, St. Patrick Hospital, Community Medical Center and the Kalispell Regional Medical Center to add a second.

Beginning next summer, the three-year program will bring in 10 residents each year. Mansch cites studies showing that physicians tend to remain in the state they train in. "To help address Montana's primary care shortage," she says, "those residency programs are really important."

Because of the act, PHC will be able to serve roughly 22,000 patients, up from the 12,000 it has now. The growth is clearly needed, as evidenced by the six- to seven-week waiting period new patients currently face.

"You can see how things are all coming together to increase the access for our community," Mansch says.

"It's huge."

Partisan paralysis

It seems a wonder that the law passed at all.

At the truck stop, Baucus talks about the political dynamics that shaped the debate while he and fellow lawmakers drafted it.

Baucus's centrism and cross-aisle relationships made him well suited to drum up support. That was central to the Obama administration's strategy: use moderate ideas that they hoped would appeal to conservatives, such as the health insurance mandate, which goes into effect in 2014. It was an idea that many Republicans and conservatives championed during Congress's last fight over health care reform, in 1993. A mandate with a tax penalty, akin to the Affordable Care Act, was central to the health care reform passed in Massachusetts when Mitt Romney, the Republican nominee for president, was governor there. In pursuit of middle ground, centrist Democrats jettisoned proposals coming from more progressive members of their party, most notably a public health insurance option, but Baucus and fellow Democrats couldn't wrangle a single Republican vote.

I ask Baucus if it seems to him as though Democrats took a step to the middle and Republicans took two steps to the right.

"That's accurate," he says.

Does he feel betrayed?

"Not so much. Because many of those who supported the individual mandate are no longer there. Richard Nixon even proposed it, as did [former Republican senator from Rhode Island] John Chaffee, and he's gone. Bob Dole—he's gone. There are a lot of members of Congress on the Republican side who proposed mandates who are no longer there."

Was he surprised?

"The other side—and they'd say the same about us, I suppose—is so political; it's not surprising in that sense. They'll find some things to drive a wedge between Democrats and the public. They used this bill to do it."

Such partisanship has only worsened since ACA's passage, which leaves Baucus as one of Congress's few moderate lawmakers. Others are opting out or getting pushed out.

During the Senate’s August recess, Max Baucus lends a hand at a low-income housing project at Missoula’s Running W Ranch. - PHOTO BY CHAD HARDER
  • Photo by Chad Harder
  • During the Senate’s August recess, Max Baucus lends a hand at a low-income housing project at Missoula’s Running W Ranch.

Sen. Dick Lugar, a Republican from Indiana who's served since 1977, voted for the bank bailout, the auto industry bailout, an arms-control treaty with Russia and for the confirmations of Obama-picked Supreme Court Justices Sonia Sotomayor and Elena Kagan. Tea Party Republican Richard Mourdock used those votes to frame Lugar as out of step with his party—and beat him by 20 percentage points in Indiana's Republican primary in May.

After Lugar's loss, he wrote a letter addressing the widening political fault lines. Mourdock's "embrace of an unrelenting partisan mindset is irreconcilable with my philosophy of governance," Lugar wrote. "In effect, what he has promised in this campaign is reflexive votes for a rejectionist orthodoxy and rigid opposition to the actions and proposals of the other party. His answer to the inevitable roadblocks he will encounter in Congress is merely to campaign for more Republicans who embrace the same partisan outlook... This is not conducive to problem solving and governance. And he will find that unless he modifies his approach, he will achieve little as a legislator. Worse, he will help delay solutions that are totally beyond the capacity of partisan majorities to achieve."

The Senate's centrist exodus at the end of the year will also include Republicans Olympia Snowe of Maine and Kay Bailey Hutchison of Texas, Connecticut Independent Joe Lieberman and Democrats Kent Conrad of North Dakota, Ben Nelson of Nebraska and Virgina's Jim Webb.

In Snowe's announcement in late February that she wouldn't seek another term, she wrote that the Senate "serially legislates by political brinkmanship... Only by finding that common ground can we achieve results for the common good... That is not happening today and, frankly, I do not see it happening in the near future."

Baucus, who's up for reelection in 2014, sees the trend. Yet he has a more positive outlook.

"Fundamentally, I believe you've just got to keep working to try to build bridges," he says. "Congress is more polarized. It's true... But what's the alternative? Bail out? Whine and complain?

"The alternative is to keep looking for people you can work with to get responsible, principled legislation passed."

Then he offers another proverb.

"This too shall pass. I'm not exactly sure when, but it's going to pass."

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