The Un-Obama Health Care Bill

Barack Obama's goal is to pass a massive health care reform bill this year. If he succeeds at achieving this long sought -after Democratic goal, it will become the foundation for his legacy. It may be the single most important achievement that he is remembered for. Ironically, the health care bill he will likely sign will be very different than the health reform plan he campaigned on.

Barack Obama decided to use a hands-off approach in pursuing health care reform. He gave Congress a very basic set of principles and told them to write the bill. This approach has two major advantages. First, it does not repeat the mistakes of the Clinton health care reform effort. Second, it allows Obama to support a bill that may likely break several of his campaign promises.

There appears to be a growing consensus about two issues in health care reform. It seems there is an agreement on all sides that in exchange for mandating all individuals acquire health care, health insurance companies will not be allowed to turn down applicants and must cover pre-existing conditions. The issue of a mandate was the key difference between Barack Obama's and Hillary Clinton's health care plans during the primary. Obama campaigned on not forcing people to acquire health insurance, but the plan he eventually signs will likely contain just that.

Obama originally proposed to pay for health care reform by reducing the rate of deduction for high income individuals. This idea appears dead on arrival. While the consensus is not yet as strong as the consensus for the mandate, indications are that health care reform will be paid for by changing the law governing taxation on employee health insurance. This was an issue in the general election. John McCain supported taxing employee health insurance, and Obama attacked him for it. Like with mandates, here is another issue which Obama campaigned against but will possibly be part of the eventual bill.

The biggest fight over health care reform will probably center on whether to give people the choice of buying a public plan similar to Medicare. Barack Obama, Senator Baucus, and most Democrats have supported offering a public plan. The for-profit insurance companies along with several powerful Republican senators are dead set against it. It was part of Obama's campaign plan and part of a white paper published by Baucus just after the election. Interestingly, the idea for a public plan can't be found on WhiteHouse.gov, HealthReform.gov, or Baucus' senate website. The public plan may eventually be dropped to get a bill passed with broad bipartisan support. If so, the “Obama health care reform bill” that is passed this year will be a very Un-Obama plan.

Stupid or Playing Dumb?

President Obama's new budget creates a very rough outline of how he plans to make a substantial “down payment” on universal health care. The only details given are that the plan would set aside $634 billion over 10 years for health care reform, and some of that money would come from a change to tax deduction rates for families making over $250,000 a year. Obama's administration is using the estimate that universal health care reform would cost $1 trillion over ten years. (I strongly dispute this often cited figure, but that is a separate article.)

His plan for health care reform in his budget outline appears a first glance, frankly, stupid. Why make a huge “down payment” and just not go for universal reform? Why cover only 36 of the 45 million uninsured? Why link a popular plan to this specific tax increase? The Democrats have the numbers and the momentum to finally achieve a goal they have sought for decades. If they pass the first step now, there is no guarantee they will have the political power to finish the job later. Technically, there is a big difference between $635 billion and $1 trillion, but to the American people, they are both just really big numbers. Not making the health care plan universal will in the long run only make it more expensive.

It is possible that the White House is stupid, but its more likely they are a dozen steps ahead. Obama's budget for health care is probably an elaborate rouse. By giving basically no details about what a plan should look like, he can act like he is blameless while Congress is forced to make the tough choices.

The health care reform bill is probably already written by Senator Baucus and/or Senator Kennedy. While it will be changed around the edges, it is likely Obama already knows its basic shape. The bill will be more expensive than planned and probably contains a mandate even though, during the campaign, Obama laid out a health care plan without a mandate. It is even possible the deduction change to pay for it will drop. He will be able to act like he is being forced to compromise instead of breaking campaign promises he doesn't care to keep.