Finally, ObamaCare Arrives

By Marc Ambinder

For a year, critics of the Democratic health care plans have been applying the label "ObamaCare" to whatever the current draft was. That was inaccurate -- because, as Democrats were eager to say, it was never quite clear to them what President Obama actually wanted out of a health care bill.  Today, the questions end. The President has unveiled his own comprehensive health care bill. It borrows heavily from the Senate's bill, adds some White House ideas, throws in some Republican-sponsored amendments, and pronounces itself ready for inspection.

The topline highlights:

-- Proposes to cover 31 million Americans who don't have health insurance;

-- Creates a new federal facility to help states crack down on insurance industry abuses and unfair rate increases;

-- Includes significantly ramped up efforts to crack down on waste and fraud within the Medicare/Medicaid systems -- this is a nod to Republicans (Peter Roskam and Mark Kirk are behind proposals to do just this);

-- Adds a Medicare tax of 2.9% on unearned income -- hitting the wealthy; it immediately closes the Medicare Part D doughnut hole gap -- something seniors should notice before the November 2010 elections if this gets through Congress;

-- Increases tax credits to families to help them buy insurance; it spends $11 billion on community health care centers;

-- Endorses but adds consumer protections to the Senate's proposal to grandfather in insurance plans that people want to keep; it adopts the Senate proposal to require that Americans who don't buy insurance pay a flat fee -- but lowers the fee;

-- Provides $40 billion to small businesses to help them defray the costs of providing health benefits if taxpayers pay for the coverage; the president delays by five years the Senate's excise tax on so-called Cadillac insurance plans;

-- Increases fees for brand name (as opposed to generic) drugs, depriving the pharmaceutical industry of an extra source of profits;

-- Eliminates the Nebraska exemption for Medicare payments and adopts a universal, phased-in approach to help states pay for the increased costs of expanding the Medicare program. 100% of the increased costs would be paid for three years; the bill turns the fee on medical equipment providers in the Senate bill into an excise tax and delays its implementation; it also delays by three years the tax on insurance companies; 

-- Finally, the bill gives the executive branch $1 billion to help efficiently implement the plan.

The political highlights: there's plenty in this bill for Democrats to like. But there's no public option. It'll be easier to get unions on board because the excise tax will be delayed and watered down a bit; the bill delays implementation of several provisions, which will annoy Democrats; it spends quite a bit of time focusing on trying to rid Medicare of waste, fraud and abuse. There's no nod to tort reform, so far as I can see.

So -- this is just a bill. How does it become a reality?  It relies on the idea that Democrats now really want to get something done. There is no public option or a national exchange; the bill is still expensive and fairly complicated; there are some carrots for those concerned about the expensive of the House bill. It's hard to see how any Republicans will support the bill, although the White House is framing it in a way so as to force Republicans to defend their opposition to it during Thursday's Blair House health care summit.  Since the first House vote, Democrats are down at least three votes.

The way forward: either rank-and-file Democrats accept this bill -- Obama's bill -- or they don't.  Republicans could suddenly discover an upside in supporting it, which is doubtful, but if they could also reduce the number of procedural delays to help the Democrats speed its passage. If not, we might be faced with the spectacle of Republicans trying to drag the votes out through the midterms. This could benefit either party; it depends on whether Americans view this bill, which is basically a product of the bills they don't like, as something new. The reason why they might do this is because they never really opposed the provisions in the bills or the goals of the bills; it was the process that alienated them so profoundly, making health care in 2009 unlovable. 

Another arrow in the White House quiver is the decision by insurers -- Anthem in California being the best example -- that decided to raise rates precisely at this moment, allowing the White House to trump them with its new insurance rate increase mitigation authority, a populist proposal that may -- or may not work, but which would be hard to oppose politically, particularly if it's seen as the centerpiece of the plan. That's why the White House, which governs through the New York Times, provided the Times with that aspect of the plan.

This article available online at:

http://www.theatlantic.com/politics/archive/2010/02/finally-obamacare-arrives/36332/