President Obama can’t afford to let insurance companies win in the health care fight for reasons related to the pure crass politics of power. Like it or not (and I strongly do not like it), Obama’s health care strategy was to cut secret sweetheart deals with all the industry players in exchange for their active political support, pushing for reform. He reached an understanding with PhRMA, the hospital associations, and doctors’ lobbying groups, but reporting indicates that Obama, after spending nearly a year negotiating with health insurance companies to keep them at the table, was never able to reach a formal understanding (although this was not for a lack of trying).
AHIP chose a different path, which went around Obama. They actively whipped up opposition to reform and leaned on a handful of insurance industry-freindly senators to push for the changes they wanted. The insurance industry’s strategy in the Senate proved very effective–they killed the public option, which was their top goal. Equally important, they made sure regulator enforcement had no federal oversight and was left to the state insurance commissioners, which AHIP knows they can buy off or out-gun. The lobbyists were even able to preserve the insurance industry’s anti-trust exemption. They also managed many smaller, but still important, victories, like selling insurance outside the exchanges, multiple exchanges within a state, a stronger individual mandate, maintaining a rather large age rating 1:3, and making sure the CO-OP idea was crippled with restrictions. From a cold, calculating strategic point of view, AHIP made a smart move not cutting a deal with Obama.
Obama may let the insurance companies keep their victories because he is desperate to sign any bill, regardless how bad, “labeled health care reform.” But if Obama does let the insurers win, it will spell serious trouble for the next three (or seven) years he is in office. Letting AHIP get away with short circuiting his administration will dramatically undercut his raw power in Washington. Why would any industry try to cut a deal directly with Obama when they know they can get all they want by just buying off a few senators for a fraction of the cost? As big a giveaway as the PhRMA deal was, I bet they are currently asking themselves if they could have done much better going around Obama.
Politically, Obama and the Democrats would be smart to really stick it to the insurance companies. They are very unpopular–43% of Americans don’t think reform goes far enough in regulating insurance companies. Striking back at insurers would be very popular with the base. More importantly for Obama, on a political level, he needs to punish those industries that did not cut a deal with him directly. His power is in jeopardy if industries come to the conclusion it is a better investment to deal directly with a handful of senators while ignoring the president. Getting tough on the insurance companies is not just good politics, but important to maintaining Obama’s long-term power. The question is, will the desire to get a “win” at any cost result in serious and lasting negative consequences for Obama.



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I just don’t understand this president. With over 70% voters supported healthcare yet he chose to ignore their will and his campaign promises. For what? More money for campaign? That’s not going to help when his own fervent supporters have turned away from him. Ma be they think where are they gonna go? not to the repubs. But people will simply not get involved, not vote. May be he thought his popularity is such that people will accept anything.
Is he getting bad advice? You don’t have a leg to stand on because there are so many avenues for him to find out what his supporters really think.
May be he just doesn’t know how, what to do to lead, govern so he’s relying on his circle who’ve sold out.
A bad bill will turn people against the president, dems and health reform which is what the insurance industry is banking on.
May be we should be sending letters directly to the president. He reads 10 letter everyday. On how this will affect people with real life examples. This is a real life and death issue.
He must be concerned about his legacy. If this fails or is set up to fail then the president’s legacy is in jeapordy. Just look at the remaining Clinton years. He has a greater burden of legacy than other presidents. Some just don’t care about their legacy.
Jon, very nice post.
I agree that, pass or fail, the healthcare bill as it sits today has emasculated Obama. I can’t imagine how anyone in Washington can take him very seriously in any upcoming climate legislation or financial reform battles.
And as for the voters, he’s betrayed and lost his most informed and passionate supporters, i.e., the ones who got him elected.
Perhaps if he made a hard left turn and took on the insurance companies, as you suggest, or similarly took on the banks in a real way (not superficially), even if and maybe especially if he lost these battles, it would be enough to win back some of his base in time for Nov 2010. But I don’t see it happening.
Thanks for the info.
Your coverage of the healthcare debacle has been so consistently excellent that I can’t think of enough superlatives. But this is one case where I differ with your conclusions. I doubt that Mr. Obama is really aware of the power issues that you cite. They would never occur to him. Because, if Obama really had the kind of political savvy that his reputation indicates, he would never have gotten into this position.
Cutting the deals with moneyed interests that you describe is not an example of political savvy. It is classic, petty political corruption–Rod Blagojevich on an only slightly broader stage. When the healthcare fiasco was imploding, I didn’t see Mr. Obama operating independently from “a handful of senators.” I saw those senators setting a pick to screen him when he went in to score (he is a basketball player, so I’ll use a basketball metaphor). The score just wasn’t healthcare reform–it was campaign cash for the Party and its incumbents. He probably got what he wanted, even from AHIP and even though they chose to embarrass him. He’ll give them what they paid for.
The sale of Mr. Obama’s reforms to the highest bidder was not an example of power politics, because Mr. Obama cut deals for campaign cash that he didn’t need and did so more or less in full public view. He seems to have confused winning a narrow tactical advantage in the fundraising sphere for the overall political victory that campaign funds are meant to buy. He already had the overwhelming support of the electorate. He had majorities in both house of Congress and the electoral momentum to bully those majorities into whatever policies he wanted. He didn’t need money.
All Mr. Obama needed to do was to play out the part that the 2008 election had written for him, much as FDR did. The momentum was there. He just had to demand that Congress act quickly on his campaign promises, starting with a single-payer healthcare system. Congress could not have resisted, not with an eloquent President in front and 60-80% of the electorate behind them.
Had he so acted, Mr. Obama would, at a stroke, have secured his power and that of his party for a generation at least. He would have broken the back of the moneyed interests that have controlled politics in this country for 30+ years and left them in complete disarray. The main antagonists–PhRMA and AHIP–would have completely ceased to exist when he was done. The leadership of AMA would probably have been replaced by one that better reflected the membership. After that, very few industry consortiums would have wanted to stand up and fight in the old way, particularly if he used the momentum to humble the banks, tax the wealthy, and bring employers to heel.
But unfortunately, Mr. Obama is not, it seems, politically savvy. He’s good at backroom gambits and playing with lobbyists. When it comes to taking up the voters’ mandate and wielding the power it gives, though, he is out of his depth–weighed in the balance and found wanting.
The best way to get the insurance companies is for the President to start supporting HR 676, and lean on every other Democrat to do so. If he strats campaigning for it, he can get it done within 6 months and go into the election with a big, big win for the CDemocartic Party. It will also teach every other industry that whn he offers a deal, they ought to take it. I think this President hasn’t read enough Machiavelli.
He’s afraid of populism. When he got elected, he turned it off.
I think even that you are being a little too generous. I doubt that Mr. Obama considers the people remotely relevant to the political process. Was Rod Blogojevich afraid of populism? No! To Mr. Blogojevich, politics was selling something valuable that had fallen into his hands, and thereby getting himself the best deal. The people had nothing to do with it. Mr. Obama appears to be cut from the same cloth. He just has better hair and a better tailor and knows that he shouldn’t stare into the camera.
robspierre, this is so eloquent, and so right on. I hope you’ll consider other ways to broadcast it far and wide, starting with e-mails/letters to the White House, OFA or his other crap outlets.
I’d also suggest letters to the editors of whatever papers/other publications you can reach, and postings on various blogs. The MSM aren’t carrying this message; we need to figure out ways to get it out.
I have emailed the White House endlessly. I don’t even get a robo-reply anymore.
Almost 30 years ago, I wrote my then Congressman, the Hon. J.J. “Jake” Pickle, a somewhat conservative, old-style Texas Democrat, to advocate for a conservation cause. Many of his constituents wrote him, and he did change his vote. But what impressed me was that he replied to me with a hand-written note that addressed my points specifically, rebutting some, agreeing with some, and saying he’d have to think about some of the others. Needless to say, he had my vote from then on, even though his positions on issues were often not my own. I trusted “Jake” Pickle the way I’d trust my doctor: his interests weren’t entirely my interests, but mine were at least one of his concerns and I could count on him to make reasonable decisions.
I mention Mr. Pickle not because he was the kind of person that we need but because he was the kind of politician that we need. I actually don’t know if he was a good person (I might have said that Tiger Woods was a good person a few weeks ago, and I still think that Mr. Obama is a good person at heart). I mention Mr. Pickle because he was politically savvy. He knew that he didn’t have to pander to constituents. But he also knew that nothing was to be gained by ignoring them and that a lot might be gained by paying special attention to those with opposing views. He knew that too close or obvious relationships with moneyed interests were bad politics. He knew that, as important as money was in politics, votes were the bottom line.
Jake Pickle was a professional politician, not a professional fundraiser who did politics on the side. He understood power: how to get it and how to use it. In that, he wasn’t particularly exceptional a generation ago. But now we have politicians who can’t handle power and are content to let the corporations, the corporate lobbyists, and the corporately owned party leaders do it for them.
We need real politicians.
I’ve said it before and I’ll say it again. If the Obama administration or Congress or anyone really wanted HCR, they would have simply passed a law that opened Medicare to anyone who wants it and reorganized Medicaid under Medicare. It would make insurance reform completely irrelevant and this could have been passed under reconciliation rules if necessary.
A simple and elegant plan. An opportunity missed which proves our overlords are playing with us like a cat plays with a mouse. How long until we are all dead and lined up in a row on the front porch?
We need campaign finance reform, outlawing ‘donations’ from so-called ‘non-profits’ and corporations and setting limits on the amount a private citizen can donate. We need this badly.
A simple and elegant plan. An opportunity
missedignored which proves our overlords are playing with us like a cat plays with a mouse.– Fixed
Unfortunately, you cannot get campaign reform while there are rich people. To the Supreme Court, money is speech, and it is now considering granting of every right up to the actual ballot to corporations.
So, to get campaign funding reform, you need to reduce the number and wealthiness of the wealthy classes. That can only be achieved by tax reform: top income tax brackets at or above the historical highs of 90+%, capital gains treated as ordinary income, and all but confiscatory inheritance taxes.
But if we had taxation like that, we probably wouldn’t need campaign finance reform. The rich just wouldn’t have the excess money that real corruption requires.
Unfortunately, tax reform is almost as tall an order as campaign reform. The pseudo-Democrats we have now are actually in the process of doing away with what remains of inheritance taxes now, and even a measely, healthcare-related surcharge on the uberwealthy is “controversial”.
Ugh.