At one point during his health care
speech to a joint session of Congress, President Obama drew
cackles for remarking that “there remain some significant details
to be ironed out.”
In a much-hyped speech aimed at rejuvenating his health care
push, Obama delivered a message that was strikingly similar to
the one that has failed to resonate with the American people thus
far. The reason is that while Obama can paper over political and
policy realities by speaking in broad strokes, it’s always the
specifics that have caused him problems.
As he has done before, Obama pledged to veto any bill that added
to the deficit. But despite that commitment, the Congressional
Budget Office has ruled that the House Democrats’ health care
legislation would create $230
billion in deficits over ten years.
Obama again touted the cost-saving potential of preventive care
and an independent Medicare commission, but the CBO has
determined that preventive measures would
actually increase health care costs and that a commission
would have a negligible impact on government spending.
Back in May, President Obama went before the American Medical
Association and
declared, “no matter how we reform health care, we will keep
this promise to the American people: If you like your doctor, you
will be able to keep your doctor, period. If you like your health
care plan, you’ll be able to keep your health care plan, period.
No one will take it away, no matter what.” Last night, Obama
offered a more nuanced pledge that “nothing in this plan will
require you or your employer to change the coverage or the doctor
you have.” While his revised statement may be more accurate, it
is no less disingenuous.
Regardless of whether legislation specifically requires
that Americans give up their coverage, there are still many
changes to the system that could cause some people to lose it
anyway. For instance, one provision Obama backed last night — to
tax expensive health plans — is explicitly aimed at encouraging
employers to drop benefit-rich policies in hopes that it would
help rein in medical spending.
At one point last night, Obama said that, “The middle-class will
realize greater security, not higher taxes.” But at another point
of his speech, Obama gave an unwavering endorsement of a
requirement that individuals either purchase health insurance, or
pay a tax.
Under the version of the mandate proposed by Senate Finance
Committee Chairman Max Baucus, individuals would face a tax of at
least $750 if they do not purchase health coverage. And while his
proposal would provide subsidies to lower-income Americans, those
subsidies would stop at 300 percent of the federal poverty level.
What that means is that a family of four with a household income
above $66,150 would face a tax of $3,800 if they do not obtain
health insurance, while an individual with income above $32,490
would face a tax of $950.
This is a problem that Obama himself noted when he was
campaigning against Hillary Clinton back when he opposed
mandates. “In some cases, there are people who are paying fines
and still can’t afford it, so now they’re worse off than they
were,” candidate Obama
said during a February 2008 debate, referring to conditions
under a similar mandate in Massachusetts. “They don’t have health
insurance and they’re paying a fine.”
During his speech, Obama advocated the creation of a plan to be
offered on a government-run insurance exchange that would be
“administered by the government just like Medicaid or
Medicare.” He said that the reason we need such an option
is that, “by avoiding some of the overhead that gets eaten up at
private companies by profits, excessive administrative costs and
executive salaries, it could provide a good deal for consumers.”
Yet later in the same speech, he argued that he could pay for
most of his proposal with cuts to Medicare that would not have
any impact on benefits to seniors. The reason, he explained, is
that we could save money by reducing “the hundreds of billions of
dollars in waste and fraud…” in Medicare — the very
government-run program he touts as a model for the creation of a
new government-run program.
While acknowledging that the new plan would be run by the
government, Obama tried to argue that it wouldn’t be subsidized
by taxpayers, but only funded by the premiums it collects.
However, any new government plan would require taxpayer money to
fund start-up costs, and should it run into financial trouble,
it’s hard to believe that the lawmakers would allow it to fail
without pumping taxpayer money into it, just as they did in the
cases of Fannie Mae and Freddie Mac (and those were allegedly
private companies).
Though he made the case for the government plan, he also laid the
groundwork for an eventual retreat. “It is only one part of my
plan,” Obama said of the government option. “To my progressive
friends, I would remind you that for decades, the driving idea
behind reform has been to end insurance company abuses and make
coverage affordable for those without it. The public option is
only a means to that end — and we should remain open to other
ideas that accomplish our ultimate goal.” He thus began the task
of selling liberals on the idea of accepting alternatives such as
the creation of nonprofit co-ops, but to this point the left has
been firmly opposed to such compromises. The success of Obama’s
health care effort will likely hinge on his ability to convince
his ideological allies to accept less.
While last night’s address may earn Obama a few days of positive
media coverage and boost the spirits of Democrats on Capitol Hill
in the short-term, these pesky details will continue to weigh on
his chances of passing major health care legislation.
