The Public Eye: Obama’s Two-Step Healthcare Strategy

By Bob Burnett
Thursday June 25, 2009 - 06:29:00 PM

After five months, President Barack Obama’s managerial style has become obvious. He’s focused on his top priorities and he is collaborative and pragmatic; his operating instructions are “never let the perfect be the enemy of the good.” This summer, Obama’s leadership will put to the test as he struggles to get Congress to pass comprehensive healthcare legislation. 

America’s 44th president outlined his healthcare proposals in a speech to the American Medical Association. His plan guarantees access to healthcare for every American. It mandates health insurance for children and guarantees affordable care to adults—with a “hardship waiver” for the poor. 

While the Obama plan makes affordable health insurance widely available, it lets individuals decide whether or not they want to keep their current plan and doctor. Featuring a “one-stop shop for a health care plan”—the Health Insurance Exchange—Americans “will have [a] choice of a number of plans” including a public option. 

While conservative Republicans have complained about all aspects of the Obama plan—some going so far as to deny that the United States has a healthcare crisis—there are two primary areas of conflict. One is cost. Obama estimates “Making health care affordable for all Americans will cost somewhere on the order of one trillion dollars over the next 10 years.” While that’s a lot of money, the president notes: “Failing to reform our health care system in a way that genuinely reduces cost growth will us trillions of dollars more in lost economic growth and lower wages.” He plans to raise the trillion dollars through a combination of tax increases for wealthy Americans and cost reductions achieved by making existing services more efficient. 

But having a healthcare plan that includes everyone may cost a lot more than $1 trillion. An analysis from the Congressional Budget Office indicates that covering everyone will cost $1.6 trillion. 

The other area of conflict is the provision of a public option. Republicans rail against this—even though the well-regarded Medicare program is an example of a public option—and accuse Obama of laying the groundwork for a single-payer plan. Nonetheless, most Democrats believe that a public option is necessary to provide real competition in the health insurance marketplace. 

In May, conservative pollster Frank Luntz wrote a memo to Republicans advising them how to defeat Obama’s healthcare initiative. Luntz suggested the GOP argue: “President Obama wants to put the Washington bureaucrats in charge of healthcare... It could lead to the government setting standards of care, instead of doctors who really know what’s best... It could lead to the government rationing care, making people stand in line and denying treatment like they do in other countries with national healthcare.” 

Recognizing that it’s politically unwise to totally oppose the Obama health care initiative, Republicans unveiled a health care plan featuring a combination of tax credits and changes to existing programs. It does not deal with several of the major concerns about the current system, such as failure to provide universal coverage and the nagging problem of exclusion because of pre-existing conditions. 

On the other hand, many observers feel the Obama health care plan does not go far enough. Writing in the New York Review, Harvard Medical School Professor Emeritus Arnold Relman observes, “[Obama’s plan] will expand insurance coverage in the short term, which is certainly needed, but... will create a system even less affordable than at present.” “In seeking a consensus, Obama’s health reform policies do not address the central causes of rising costs, and propose nothing likely to have much effect on them. He does not mention the ways that investor ownership and the fee-for-service payment system provide incentives for increasing costs...” Relman concludes that a singer-payer plan that eliminates private employment-based insurance isn’t politically feasible. 

Most liberal Democrats favor a single-payer plan. Faced with a pragmatic Obama administration determined to push through less-than-optimal health care reform, liberals are faced with a tough decision. They can go down fighting for single-payer—probably combine with conservatives to deny Obama support for the passage of his incremental plan—or they can hold their noses and pass healthcare legislation that solves many but not all of the problems with the current system. 

There appear to be two critical components of the current Obama plan: universal access to health insurance and the public option. So long as these stay in the legislation, Democrats should support it. 

Because Obama is pragmatic, many of his initiatives will have to go through several stages. That was true of the stimulus bill; it solved some but not all problems and a further bill will be necessary. The same two-step approach will have to happen with healthcare. Obama’s first step deals with the most egregious problems with the current system, but doesn’t adequately contain costs. Those will have to be dealt with by future legislation that proposes a workable solution: a single-payer plan. 


Bob Burnett is a Berkeley writer. He can be reached at