Health Care: Obama Hints At Strategy

The first 100 days of the Obama administration will be and have been consumed with the economy and the budget; the second 100 days will feature, among other things, a significant and detailed negotiation with Congress on health care reform. To start the process, the White House has two major options. Either they could push for a significant expansion of government-run programs, or they could ask Congress to use money from the health care reserve fund to pay for the premiums of Americans who don't currently have insurance.  The former would represent a departure from the employer-based system; the latter, which would include significant new restrictions on the insurance industry, would preserve, for the time being, the system's status quo.  Politically, the target is moderate Democrats and independents. Legislatively, the goal is to get insurance companies and business lobbies on board, early.

Thursday, in response to a question about health care, President Obama outlined the principles first developed during his presidential campaign.  But then he said this (emphasis is my own.)

The problem is, is that we have what's called a legacy, a set of institutions that aren't that easily transformed.  Let me just see a show of hands:  How many people here have health insurance through your employer?  Okay, so the majority of Americans, sort of -- partly for historical accident.  I won't go into -- FDR had imposed wage controls during war time in World War II.  People were -- companies were trying to figure out how to attract workers.  And they said, well, maybe we'll provide health care as a benefit. 

And so what evolved in America was an employer-based system.  It may not be the best system if we were designing it from scratch.  But that's what everybody is accustomed to.  That's what everybody is used to.  It works for a lot of Americans.  And so I don't think the best way to fix our health care system is to suddenly completely scrap what everybody is accustomed to and the vast majority of people already have.  Rather, what I think we should do is to build on the system that we have and fill some of these gaps

Obama's plan will ultimately contain both elements. But my sense is that Obama has decided to start slowly.