The White House Creates An Enemy Out Of A Friend

Goal number one for the White House this August: create an enemy, a foil, that will reframe the health care reform battle as one between the forces of progress (the Democrats) and the forces of the status quo (the Republicans and the insurance industry).

Based on interviews with White House officials, DNC officials and a party strategist who advises the White House, here's the how and the why.

The White House is now incorporating the cost argument into a larger umbrella that covers "consumer protection." Two weeks ago, in the Rose Garden, Obama began to use the "health insurance reform" phrase. The phrase comes directly from David Axelrod, looking at DNC and Senate race and other private polling. The quality argument is the strongest, qualitatively: under the Democratic health care plan, the insurance companies will never be able to deny you coverage because of pre-existing conditions ever again. Democrats are being urged to talk about consumer protections. It defines, in very easily palatable terms, what people will get out of health insurance reform. (a leveled playing field...protect the doctor-patient relationships--i.e., it's the insurance industry who wants to get between you and your doctor....slower growth of your premiums, etc.)

This tactic could rally the base, in that it would help distract Democrats from the parts of the bill they don't like (no robust public plan).
The industry is easy to demonize. Most insurers are motivated by profit, which they accrue by making decisions about who and what to cover. Their incentive is to try and deny as much coverage as possible without risking a wholesale hemorrhage of companies who purchase their coverage. (Individuals purchasing insurance on their own have it much worse.) The practice of recession, whereby companies deny claims to sick people who allegedly failed to report a pre-existing condition, is perhaps the most public manifestation of these perverse incentives. That said, there are good insurance companies and bad ones. Some companies do great work with certain diseases, like cancer, and drop the ball with, say, preventative medicine.

The industry concluded that reform was inevitable. In order to save their industry, they decided to partner with the White House from day one. They've accommodated the demands of Democrats to scrap discriminatory policies against people with pre-existing conditions, have  agreed to various premium caps, have agreed to accept various different types of basic coverage plans. In exchange, the industry gets to exist; it gets millions of more Americans with a mandate to buy coverage; it gets some flexibility in terms of risk pools; it doesn't accept onerous restrictions on its profit-to-loss ratios. So far, the White House hasn't gotten any votes out of this arrangement, but they've gotten the industry to hold its fire.

No longer. By creating an enemy out of the insurance industry, the White House is risking a real turn-about. The hedge is that there's no way, having invested so much in crafting a pro-reform image, the insurers will begin to oppose it.  On the other hand, if the industry did suddenly decide that the reform project ought to be killed, the White House would have a real enemy -- and would be able to frame the debate much more clearly as a choice between progress and obstruction.

In the DNC's polling, more than 90% of Democrats support Barack Obama's plans, but a growing number of Democrats are skittish about the health reform project. August will be used to energize the base -- get them back into the them -- get them fighting again. How? By giving them an enemy. Polling shows that Americans distrust health insurers. The White House's new rhetoric will link insurers to Republicans. They're the "bad guys." The status quo versus the people who are battling every day.

Given an OK by the White House, Nancy Pelosi previewed how tough the Dems will be, suggesting that the insurance industry is "carpetbombing" the country with opposition to a "public option" in the health exchanges. (The industry has run one, completely positive ad; they're not doing public plan-related grassroots stuff either. In fact, the biggest opponents of the public plan, at least in terms of relevance to getting the votes, have been Democrats. The industry opposes a public plan, but they've opposed one from the beginning, and quite openly.)