Health Care Reform and the State of the Union

Just some quick thoughts on health care reform and President Barack Obama’s State of the Union address.

Bottom line: he intends to move forward with health care reform, but, given the changed political context after the Massachusetts special election, has no specifics as to how he’ll move forward and what he’ll try to accomplish. Yet.

The President’s addressed health care reform roughly half way through his speech. That alone indicates that the White House has gotten the message: the American people are focused on jobs and the economy. Health care reform in and of itself is simply less critical now than it was even two weeks ago. This is not to say it’s unimportant. The status quo is unsustainable and if reform doesn’t occur sooner rather than later there will be a heavy price to pay. Nor is it any less critical for President Obama to sign some form of comprehensive health care reform into law. He’s staked a great deal of his credibility and political capital on achieving reform. He has to deliver something.

Not surprisingly then, the President made it clear he’s not giving up on health care reform. “(W)e must also address the crushing cost of health care,” President Obama said. “This is a cost that now causes a bankruptcy in America every thirty seconds.  By the end of the year, it could cause 1.5 million Americans to lose their homes.  In the last eight years, premiums have grown four times faster than wages.  And in each of these years, one million more Americans have lost their health insurance.  It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.  And it’s one of the largest and fastest-growing parts of our budget. Given these facts, we can no longer afford to put health care reform on hold.”

President Obama then noted how close Democrats had come to passing health care reform (until the results of the Massachusetts election denied Democrats of the ability to overcome a unified Republican filibuster on their current legislation) and touched on some of the benefits Americans could expect from the legislation.

But instead of insisting on passage of the Senate version of reform through the reconciliation process or promising to vigorously pursue any specific reform package, President Obama struck a more conciliatory, bi-partisan tone. “Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week,” he said.

Next the President again reminded Americans of the importance of achieving health care reform. “I suffer no illusions that this will be an easy process.  It will be hard.  But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.  So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.“

Then it was on to education issues.

What to make of President Obama’s quick and relatively non-substantive reference to the most critical issue of the first year of his presidency? My take is it reflects the reality that the White House and the Democratic leadership don’t know how to proceed yet – they don’t know what they can get passed or how to go about it. Yes, some members of Congress talk about passing much of the existing Senate version of reform a legislative process known as reconciliation. (what’s significant about reconciliation is that it allows the Senate to pass legislation with a simple majority – 51 votes – instead of 60). But there’s very little political upside in pursuing this course – even if there are enough moderate Democrats in the House and Senate to enable it to happen in the first place.

One of the key messages independent voters have been consistently telling Washington is that they’re tired of the political games that pass a business as usual in the nation’s capitol. Yes, Democrats can claim Republicans are playing games by filibustering health care reform. But circumventing such a filibuster through reconciliation will look like chicanery to many voters. And that’s an appearance Democrats simply can’t afford. Not after all the backroom deals they’ve cut during the health care reform process to date.

At the end of the day, I expect Congress to pass health care reform that is far more modest than what Democrats initially hoped to accomplish. And that there will be some Republican votes for a more moderate bill. But to get this done, progressives will need to come to grips with the reality that Democratic majorities are not synonymous with liberal majorities. My guess is that while President Obama meets publicly with his group of “businesses and workers, doctors and health care providers, Democrats and Republicans,” he’ll be calling a lot of liberal lawmakers and explaining basic math. Then he’ll talk about the worthiness of half-a-loaf. And about the need to offer Republicans wins on some issues (think malpractice reform or selling policies across state lines) if there’s any hope of getting support from any GOP lawmakers.

The State of the Union address is not the place for announcing scaled back ambitions. By acknowledging that there was a need to “begin work” on pulling together a reform package, President Obama was signaling that the reform bills before Congress is not going to be the legislation that winds up on his desk (certainly legislation that has been a year in the making is not something on which one “begins working” upon). But health care reform will be coming. We just don’t know what it looks like yet.

5 thoughts on “Health Care Reform and the State of the Union

  1. Politics aside, I do believe that there is a need for reform, but I believe the best start to reform is to take care of the fraud and waste issues inside of Medicare, Medicaid, SS. I believe by doing that all of our rates would go down, and believe it would make SS, Medicare, Medicaid viable again.

  2. At this point all we can hope for with health reform is that Medicaid might be expanded, thanks America! It seems crazy that the voters in Massachusetts who all had health care and insurance were able to change the course of history for the rest of the country where more and more people don’t have insurance.

  3. Obama spent 5 minutes of a 1.5 hour speech on health care, so while his words stressed the importance of, the fact that he glossed over it in his biggest speech of the year is telling. He didn’t want to spend time talking about a reform that’s unlikely to happen any time soon.

  4. Do you seriously believe that a healthcare plan will pass in any manner other than through the reconciliation process. This is a Congress that could not even agree to a bi-partisan commission on deficit reduction. This one lost because it only received 53 votes in favor; can our government become any more dysfunctional.
    Further, if anyone has any doubts about how inept or corrupt our government is, all you had to was watch yesterday’s hearings on the AIG bailout. According to the Chief Counsel for the NY Fed we could not negotiate better terms with AIG’s counterparty’s because the counterparty’s knew that the bankruptcy of AIG was not an option and the government was negotiating from a weak position.
    What was even more incredible was that Paulson testified that he did not know who the counterparty’s were or how much was at risk and not one Congressman asked him how then did he arrive at a bailout number ( I missed Geithner).
    The other specific question that was not asked was, under what government mechanism or specific legislation was AIG allowed to accumulate this massive amount of liability without any oversight. I believe the correct answer is the Commodity Futures Modernization Act, which preempted State Insurance Authorities from examining the derivatives market.

  5. Personally, I was a bit upset that Obama did not try to connect the dots better between strong healthcare reform and a stronger country because of it, from a stronger economy, healthier labor force, etc. He said himself he was upset he did not communicate things clear enough with the citizens…this was his chance.

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