Just when health care reform appeared to be dead in the face of Democrats’ recent electoral losses, and just when the Obama administration seemed to refocus its attention on job creation, the White House revived the debate by publishing a new proposal for health reform, to be unveiled and discussed in a bipartisan health summit this week.
Far from being the scaled-back version that opponents expected after his Democratic Party lost a key Senate seat in Massachusetts and governorships in Virginia and New Jersey, the “new” proposal retains most of the elements of the plan previously approved by the Senate—although it includes certain changes to assuage fears of political retribution against Democrats during this year’s electoral campaign.
The proposal closely resembles the version the Senate passed on Dec. 24 in that it includes an insurance requirement, with fines or income-based subsidies for those who cannot afford it; expansion of Medicaid; founding of a marketplace for health insurance for those who are unable to obtain insurance at work, or do not qualify for any federal insurance programs; and a prohibition on insurance companies denying coverage based on preexisting conditions (like diabetes).
Some of the new amendments include expanding Medicaid subsidies for new enrollees to all states (not just to Nebraska), and eliminating Medicare’s so-called “doughnut hole”, in which recipients must pay out-of-pocket expenses for medications unless they reach an extremely high amount of spending. The Obama administration is also proposing the creation of a new watchdog agency that would review insurance rates increases—possibly a direct response to the 39% insurance-rate hike proposed by Anthem Blue Cross of California.
With the re-launch of the proposal, the Obama administration has calculated that it can peel away support from some Republicans while assuring nervous Democrats of political cover. The Medicaid provision is meant for the nation’s governors, who were weary of an unfunded Medicaid expansion that might affect their cash-strapped governments. And by financing the proposal with an increase in the Medicare taxes for the wealthy, as opposed to taxing high cost insurance plans (the so-called “Cadillac plan”), the administration aims to secure the support of labor unions.
When the President decided to make health reform the centerpiece of his legislative agenda, the initial momentum gained from his election quickly faded as he left the majority of the work for enacting the legislation to the Congress. Now, it is up to him to reevaluate the prospects of reform and give his proposal a much needed momentum.
Will Republicans—emboldened by their gains in the ballot box—continue their objection to the plan and insist on starting the debate all over? Will liberal Democrats continue to support a bill that does not go far enough in their view to provide insurance to all Americans? And what about undocumented workers? Will they be able to buy insurance in the market exchange?
A week ago, it seemed these questions would not be answered; that debate on health appeared dead on arrival. With this latest proposal, the President is trying to salvage some elements of his proposal. In the coming weeks, we will see if the President’s efforts are good medicine to his ailing patient.
