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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Obama’s Health Plan: The Best of Incrementalism

As you probably know if you’ve been following the presidential campaign news, Barack Obama released his long-awaited health care reform proposal earlier this week, and it’s getting decidedly mixed reviews from the chattering classes. Two progressive blogger/journalists with pretty good street cred on health care issues, Ezra Klein and Jon Cohn, have published quite similar takes, praising many of the details of the plan but decrying its timidity in challenging the health care status quo–most particularly its failure to provide universal coverage (other than for children). On the positive side, it does indeed seem that Obama’s plan represents sort of a greatest hits collection of incremental health care reform ideas. It picks up John Kerry’s underappreciated 2004 proposal for federal reinsurance of catastrophic health costs, which could have a big impact on rising insurance premiums. It adopts the federal employee health plan model for a national insurance purchasing pool, which makes abundant good sense substantively and politically. It calls for a federally-driven shift towards prevention and chronic disease management, along with IT investments to help control costs and improve quality, which ought to be a point of agreement among those who may disagree on financing mechanisms and/or the role of public and private sectors. It includes a direct assault on health care industry abuses through federal regulation, instead of treating such abuses as an unavoidable byproduct of for-profit involvement in health care. It does cover all kids, which makes sense if you aren’t going to cover everybody. And it provides very robust subsidies to make voluntary health insurance affordable to as broad a segment of the uninsured as possible, along with an employer mandate to avoid erosion of existing coverage. Those are a heap o’ positives, but the negatives, most especially the plan’s failure to include a universal individual mandate for health insurance, and its complexity, are likely to get more attention, on both substantive and political grounds. Substantively, the plan obviously fails to fundamentally overhaul the current system, with its patchwork of public and private programs, its heavy reliance on economically damaging and arguably regressive employer-based coverage, and its failure to cover everyone. And politically, the plan will reinforce claims that Obama isn’t quite the transformative, great-leap-forward progressive so many have seen in him. One particular problem for Obama is that his plan superficially resembles the Massachusetts initiative signed by Republican presidential candidate Mitt Romney, with the crucial exception that Massachusetts did include a universal individual mandate for coverage (underfunded, to be sure, but still in place). Another is that Obama’s plan achieves less than universal coverage at a pretty steep price tag, given its lavish subsidies to tempt rather than force individuals into obtaining insurance. Beyond the initial reactions, perceptions of Obama’s plan will be crucially influenced by his rivals for the Democratic presidential nomination. John Edwards is already in a position to exploit Obama’s incrementalism on health care, given his own comprehensive universal plan, which not only embraces an individual mandate for coverage but also provides a stronger Medicare-style public option attractive to Democrats who favor a single-payer system. Given Edwards’ competition with Obama for the support of left-leaning Democrats, this could become an important point of distinction between the two candidates, at least among activists. But the other shoe that will soon drop is Hillary Clinton’s; she’s slowly rolling out a very thorough and comprehensive health care reform proposal, building on her unquestioned expertise in this field. Still under wraps is what she would do to achieve expanded coverage. If she goes for a universal plan (which is quite likely), then Obama will begin to look like an incrementalist outlier among those who care about policy details.

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