Politico got it just about right. “In the end,” wrote Carrie Budoff Brown, “a speech meant to reset the health care debate ended up sounding in large parts like speeches Obama gave before, raising the question of whether the public heard anything Wednesday night to calm their nerves.” While the pollsters will do their best to answer that question over the next couple days, it’s clear to us that the president did not change the discourse or the terms of the debate, and apparently has no plan for doing that. The same chess pieces are in play, and the president is moving them around to capture different groups of worried constituents.
For months, we on Campaign Desk have urged the president to define his goals for reform, and last night he came closer to doing that when he said his plan would meet three basic goals: provide more security and stability to those who have health insurance; provide insurance to those who don’t have it; and slow the growth of health care costs. But the rhetoric, however lofty and strong, obscured some of the answers to the “what’s in it for me” question the electorate has been asking. So herewith is our takeaway for the press and the public to ponder as the debate rolls on.
For those with coverage: Obama reassured the millions of Americans with employer or government coverage that the plan would not require anyone to change coverage or doctors, saying that his plan would “make the insurance you have work better for you.” But employers change plans all the time to get cheaper premiums, and sometimes those changes do require people to find new doctors. Certainly the president is not going to prevent businesses from doing that.
Then he seemed to be telling the currently insured group that “it will be against the law for insurance companies to deny you coverage because of a preexisting condition.” But this isn’t an issue for people in employer plans or on Medicare. It’s an issue for people in the individual market, where one sick person on a single policy can cost the company a bundle. He ticked off his already-announced consumer protections—limits on the amount you can pay for out-of-pocket expenses, caps on lifetime coverage. Some of those with employer coverage might benefit, but, as we’ve noted, whether such protections will really protect depends on how much lobbying mischief goes on when the final deal is struck.
But the real takeaway for people with coverage came when the president said that a public plan option, whatever form it takes, would not be available to them:
Let me be clear—it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance.
The Congressional Budget Office, he explained, has estimated that less than five percent of Americans would sign up. But what if someone doesn’t like their boss’s insurance and prefers the public option? Sorry, the president seemed to be saying, you can’t have it. The reason for that, of course, is to prevent people from leaving private coverage for what some had hoped would be a cheaper and more comprehensive option, thus “crowding out” business that would have otherwise gone to private carriers.
So, then, why the hullabaloo about the public option in the first place? For me, the president made clear that it is the bargaining chip it always has been. He indicated that a public plan helps keep the insurance companies honest (and, he might have said, safe from real competition), but it isn’t a make-or-break issue—just a means to the end of eliminating insurance company abuses and making coverage affordable. “Its impact shouldn’t be exaggerated,” he said. “It is only one part of my plan.”
For those without coverage: The president finally articulated the individual mandate—that those without coverage from another source will have to buy it. That was something he did not support when he was running for president. Remember, he was going to require coverage only for kids? But as part of a bargain with insurers, everyone has to buy coverage or the carriers won’t agree to clean up their act. Basically it boils down to this: everyone, sick or well, has to be in the individual market’s risk pool in order for insurers to agree to cover those who are ill.
But last night the president did not talk about the fines and potentially steep tax penalties that will be assessed on those who don’t purchase coverage. Nor did he talk about the taxpayer-funded subsidies that some people will get to help them buy this insurance. (Who will get help and who won’t is still a very big missing detail.) Instead, he said that the cost of the subsidies would only amount to $900 billion over the next ten years—less than the cost of the wars in Iraq and Afghanistan and the tax cuts to the wealthy. That apparently was still a lot for some of the people whom The Wall Street Journal interviewed. One man told reporters: “I’m all for coverage for everybody. But as a small business owner I don’t want to pay for it.”
The president more or less explained the new insurance exchange, a kind of glorified insurance brokerage service offering an assortment of policies to facilitate shopping—restricted, of course, to individuals and small businesses. He said that “these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable coverage.” Did he really mean that these loosely connected shoppers were going to have the clout to bargain with the likes of Partners HealthCare system in Boston and Blue Cross?
What he didn’t say was that these individual market policies are likely to be age-rated, meaning that an older person will pay much more than someone younger. The Senate Finance Committee draft bill would have them pay as much as five times more.
For those on Medicare: The key things he told elders were that he would not privatize Medicare and turn it into a voucher system—“that will never happen on my watch” –and that cuts in overpayments to Medicare Advantage plans were still on the table. He said that not one dollar from the Medicare trust fund would be used to subsidize the uninsured—a bit of inside-the-beltway jargon that probably doesn’t mean much to most beneficiaries. What he was saying was that he was not going to rob Peter to pay Paul, and that his plan would eliminate the “hundreds of billions of dollars in waste and fraud as well as unwarranted subsidies in Medicare that go to insurance companies.”
Aside from setting up a commission to find waste and fraud, he didn’t say how this would be eliminated. Cutting payments to Medicare Advantage plans is easier, and an issue on which Obama has shown consistency. Cutting the overpayments is likely to stop insurers from offering these plans that many consumers like because they may offer extra benefits and cheaper premiums. It’s fair to expect a big debate before this thing is settled; no doubt insurers are already mobilizing their grassroots on this one.
Obama reassured seniors that the government had no plan to set up “panels of bureaucrats with the power to kill off senior citizens.” “Such a charge would be laughable if it weren’t so cynical and irresponsible,” the president told them. “It’s a lie, plain and simple.” That line then led to his assurances that his plan would not cover illegal immigrants and to the statement from South Carolina congressman Joe Wilson that the president was lying. That was a media-ready remark made in heaven.
We expect tons of coverage over this, which reminds me of another media distraction and another man named Joe—Joe the Plumber, whom John McCain referenced during the waning days of his campaign. For days, Joe the Plumber was the media’s star attraction, diverting coverage from the real issues. This time, we hope leveler heads will prevail, and assignment editors will be more interested in having their reporters explain and answer for their audiences the “what’s in it for me” question, using some of our observations as a guide.