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Executive Memorandum #379 on Social Security

May 16, 1994

Why Americans Should Beware Health Reform 'Triggers'

By


(Archived document, may contain errors)

5/1&94 379

WHY AMERICANS SHOULD BEWARE HEALTH REFORM "TRIGGERS"

Having apparently lost the battle to persuade Americans to support job-killing employer mandates as a way of paying for a government-run national health care system, some lawmakers have conjured up a legislative de- vice to achieve their goal. Their ploy i s something called a "hard trigger." This means that if some other ap- proach enacted in legislation does not work exactly as planned, a mandate on employers to provide government- designed insurance automatically would go into effect on some future date- w ithout further congressional ap- proval. Among the supporters of a hard trigger are some members of the Senate Finance Committee, as well as the Jackson Hole Group-the architects of "managed competition." The trigger idea is said to be a compromise. It is not. It is simply a legislative trick to allow a minority in Congress who have failed to make a convincing case to prevail anyway within in a few years. This is how the hard trigger would work. Congress would enact a health care reform that would command a majority in both houses and among the American people, say a package of modest voluntary insurance reforms to improve insurance access and to make policies more portable. But the legislation also would include a provi- sion that would set a specific outc o me that must be achieved by an exact date, say 95 percent of the population having comprehensive insurance by the year 2000. If the goal was not met by that date, then the hard trigger in- cluded in the law would require that other, standby provisions wou l d be implemented by executive action with- out any further action by Congress. What proponents of hard triggers have in mind is that a sweeping system of employer mandates, price controls, standardized benefits packages, and other changes automatically wo u ld go into effect if some other approach had not convincingly succeeded by a certain deadline. The hard trigger idea, which is like putting Congress on autopilot, would be bad health care reform and an ab- rogation of legislative responsibility by Congres s . Among the many problems with the idea: X A hard trigger invites legislative and regulatory "sabotage." Supporters of an employer mandate and other features of the Clinton Administration's health plan believe this is the right solution to the shortcoming s of the current health care system. Not surprisingly, they have little faith in other ap- proaches. What, then, if they do succeed in gaining legislation which would automatically implement employer mandates should some other approach fail? They would hav e no incentive to help write legisla- tion or regulations to give that other approach the chance to show some early success. Indeed, they would reason that an early success for what they consider an ultimately flawed system would be mislead- ing and only d e lay the day when a trigger would deliver the "bettee, solution. So they would have a strong incentive to weaken legislation and regulations setting up the competing system, so that the trig- ger would be sure to take effect. X A hard trigger allows a dete r mined minority of lawmakers to prevail over the majority. The mi- nority who support the core elements of the Clinton Administration's health plan would vote with other members for an weakened, ineffective alternative with an unrealistic timetable. To ach ieve the automatic. implementation of the Clinton plan, all the minority would then have to do is block any future move to repeal the trigger through parliamentary tactics or a Senate filibuster.

X A hard trigger locks in only one, perhaps outdated, opti on for later reform. After some years of experience with one reform approach, Congress and the American people will have learned a great deal more about health reform. If the preferred reform, enacted in 1994, does not meet its targets, lawmakers may no l o nger consider employer mandates as the second-best approach to try. For example, there may be strong support at that future time for simply modifying the 1994 measure, switching to a system based more on individual choice, or perhaps introducing some othe r approach not even on today's menu of legislative choices. But a trigger provision would make it much harder for Congress to make any modifications or reforms other than to implement a mandate system already rejected in 1994. X The hard trigger allows law m akers to hide their vote from constituents. A hard trigger attached to legislation establishing, say, voluntary coverage by employers, allows lawmakers to tell constituents that they have not voted for a mandatory system. But these lawmakers know that the end result of their vote in reality will be an employer mandate. The hard trigger idea thus effectively locks a future Congress and Administration into the automatic introduc- tion of an employer mandate plan that cannot muster a majority of votes today. B ut if lawmakers are not willing to vote for a particular plan today, it would be an abrogation of their responsibilities as legislators to vote for a trigger that automatically would implement that plan in the future. Another version of the trigger idea, h owever, is quite reasonable. Indeed it arguably should be a feature of all legislation. This is the so-called soft trigger. A soft trigger provision does not mean that a specific plan automat- ically replaces other legislation if the first approach does n o t achieve its goals. Instead, it requires Congress for- mally to reconsider the legislation if it should fail to meet its stated objectives. That type of trigger should be a feature of every bill. All new programs should have explicit objectives to be ach i eved within a certain timetable, and a future Congress should be legally obligated to reassess the program at a later date and scrap it, modify it, or replace it if the legislation has not worked. That requirement should have been included, for instance, i n the legislation setting up America's welfare programs. Clear targets and a future reassessment should also be included in any health cam legislation. But if a 1994 health care reform fails, it is the future Congress assessing the program that should det ermine the best action to take. Future lawmakers should not be forced by a hard trigger to stand by while a plan that was unpopular and considered unworkable in 1994 automatically goes into place.

Stuart M. Butler Vice President and Director of Domestic Policy Studies

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