President-elect Barack Obama placed a heavy bet last week that the
recession-wracked country he is about to inherit has finally reached
its tipping point on health care.
It might seem counterintuitive to gamble that political and economic
forces would converge at such a low point after more than half a
century of failure. The Treasury has never been so overcommitted, and
providing “affordable, accessible health care for every single
American,” as Mr. Obama describes his goal, would require substantial
resources up front.
But Mr. Obama, like others, sees political opportunity in the
country’s economic distress, and he threw in last week with those who
argue that the financial crisis has only made it more imperative to
remake the health delivery system — that, in fact, economic recovery
depends on it.
In nominating the former Senate leader, Thomas A. Daschle, as both
director of a new White House office of health reform and secretary of
health and human services, Mr. Obama made explicit that the reeling
economy had not softened his commitment. The issue had been
crystallized, he said, by the plight of American automakers, who
assert that health care expenses add anywhere from $1,100 to $1,500 to
the price of a car.
“Year after year, our leaders offer up detailed health plans with
great fanfare and promise, only to see them fail, derailed by
Washington politics and influence peddling,” Mr. Obama said at
Thursday’s news conference in Chicago. “This simply cannot continue.
The runaway cost of health care is punishing families and businesses
across our country.”
With that sense of the battle-scarred history of health care politics,
Mr. Obama began a careful campaign to frame the issue more as a
pocketbook concern than a moral one. Given that four of five Americans
are dissatisfied with health costs, while only 15 percent lack
insurance, strategists have argued since the Clinton health care
debacle of the 1990s that success would depend on persuading the vast
middle of its economic self-interest.
It was no accident that Mr. Obama emphasized that reducing costs would
be “the starting point” of his efforts.
With health insurance premiums rising this decade at four times the
rate of inflation, and draining a growing share of personal income,
middle-class support for an overhaul would seem to be reaching
critical mass. If a broad swath of Americans feel destabilized enough
by health costs, their demands for relief could help marginalize the
kind of opposition from entrenched interests that has killed previous
“Most Americans are troubled by the lack of universal insurance, but
what really frightens them is the prospect that their own insurance
won’t protect their health or family finances,” said Jacob S. Hacker,
a political scientist at the University of California at Berkeley and
an authority on health care. “That’s a fear that more and more
Americans are facing as health costs skyrocket and job security
Mr. Obama seems to recognize that the recession, with its devastating
job losses, affords him the potential to accelerate public opinion. To
broaden support for his plan — whatever it ends up being — he insisted
last week that systematic improvements in health care would be
essential to any lasting economic recovery.
“It’s not something that we can sort of put off because we’re in an
emergency,” he said. “This is part of the emergency.”
Mr. Obama said his health plan would be “intimately woven into” his
administration’s economic blueprint. And he directly confronted those
who might ask how the country could afford a major expansion of health
coverage in times of shrinking revenues and burgeoning deficits. “I
ask a different question,” Mr. Obama said. “I ask how can we afford
Indeed, the economic consequences of the system’s inadequacies have
come into stark relief with the economy’s deterioration. Rarely have
they been felt so directly by such a broad spectrum of people.
Researchers at Georgetown University’s Center for Children and
Families estimate that 4.1 million people lost their employer-
sponsored insurance over the last year, and that two million of them
remain uninsured. Across the country, the chronically ill report they
are deferring care and splitting pills because they can no longer
afford out-of-pocket costs.
Employers are being pushed to the brink, from general stores to
General Motors, which reportedly spends more per car on health care
than on steel. States are facing unsustainable increases in demand for
public insurance programs and are cutting benefits, eligibility levels
and provider payments in order to balance budgets.
“The case for action has been compelling for a long time, but getting
our political system to act requires a widespread sense of crisis and
broad resolve among political leaders,” Mr. Hacker said. “In fostering
that sense of crisis and that resolve, the current severe downturn has
been hugely important.”
There has been pressure from Congressional Democrats for Mr. Obama to
stand strong on health care, with influential committee chairmen like
Senators Max Baucus of Montana and Edward M. Kennedy of Massachusetts
making it an unwavering priority. They are ready to take up
legislation early next year, a task made easier by Mr. Obama’s plea
for immediate action and by tentative encouragement from business,
labor and provider groups.
Those interested parties may retreat once details make clear whose ox
will be gored. Well-financed health insurers and business groups waged
a brutally successful campaign against the Clinton health care plan,
and doctors and hospitals have done much the same in state
There is a rough consensus, certainly among the Democrats who control
both houses, around many key components of the Obama plan — to expand
government subsidization of insurance for the poor, to stimulate
competition through a new government plan, to require insurers to
accept those with pre-existing medical problems and to invest in
computerization, prevention and payment incentives for better care.
Less certain, of course, is how to pay for it. During the campaign,
Mr. Obama said he would get about half of the necessary total,
estimated at more than $100 billion a year, by raising taxes on those
making more than $250,000. The rest was to come from savings generated
by various efficiencies (their value is a matter of considerable
Mr. Obama reaffirmed on Thursday that his proposal to roll back the
Bush tax cuts might be deferred because of the recession. “We’re
probably going to have to, then, find additional dollars to pay for
some investments in the short term,” he said, adding that he wants his
health plan to pay for itself over a decade.
Some of those dollars may be found by packaging health care
initiatives as stimulus measures, a recessionary opportunity presented
by the public’s acceptance of deficit spending to spur the economy.
What, after all, is $100 billion for health coverage if the government
can print $700 billion to bail out the banks?
The Obama transition and leaders in Congress are negotiating a massive
stimulus package that could include $40 billion in health care
spending over two years. Among the likely beneficiaries would be state
Medicaid programs and computerized health records, both of which Mr.
Obama had vowed to expand long before the recession.
Jonathan B. Oberlander, who teaches health politics at the University
of North Carolina at Chapel Hill, said recessionary pressures had
raised the chances for change from nil to possible. The question, he
said, is whether Mr. Obama and Mr. Daschle can harness the new urgency
and marginalize the opposition that will inevitably emerge.
“The history of health reform is replete with instances of reformers
believing this time it’s inevitable,” Mr. Oberlander said. “Those
prior tipping points all turned out to be mirages.”