Health care reform is in the eye of the beholder

They say that beauty is in the eye of the beholder – perhaps, the same can be said for health care reform.

Barack Obama’s health care reform which goes under the title – H.R. 4872, The Health Care & Education Affordability Reconciliation Act of 2010 -‏ is now law. To describe it as “reform” is a misnomer. The positives accomplished are to provide health coverage to 32 million Americans who are either uninsured or under-insured. It has also made illegal the use of pre-existing condtions as grounds for denying coverage.

But the other side of the coin is that Obama essentially gave away the store to the insurance industry. Despite all the hoopla regarding insurance industry opposition, in essence the insurance industry wanted the Obama plan to become law as long as there was no public option or attempt to remove the anti-trust exemption that the industry enjoys.

At a basic business level, the simple reality is that Obama’s plan will provide a windfall for the insurance industry. One does not need to be a rocket scientist to figure that out. Their customer base is being increased by approximately 32 million customers with no effective cost contols and no new competition. The only real downside for the insurance industry is the change in the law regarding pre-exisiting conditons which has minimal penalties for non-compliance. Would any business ever turn down an opportunity of getting tens of millions of new customers – and mandated by law to boot?

Yes, the industry wanted no change in the law regarding pre-existing conditions. They did not get their way but what was passed was watered down in that the penalty for breaking the law is $100 per day which is inconsequential to an insurance company that might otherwise have to pay several hundred thousand dollars for certain health care claims. An insurance company might be better off incurring the penalty and avoiding paying the claims for coverage for a terminally ill patient.

Since Obama’s minimal requirement whenever he spelled out his vision of health care reform was effective competition and creating an environment for cost effective health care, what there is in these reforms that would accomplish these goals? Yes, the CBO estimates substantial savings in the future but when the federal government is not able to project its expenditures a year out what possible credibility does an estimate for this decade have – let alone the trillion dollars that the CBO projects will be saved in the next decade? This is not a knock on the CBO which has no control over changes in legislation down the line which could affect the estimated savings.

To put it another way: if Obama had proposed a year ago that his vision of health care was what has now become law, what would the reaction of his supporters have been?

What this bill has done is to provide Obama a much needed victory even if the moniker of “reform” is misplaced. It is not without merit in that 32 million uninsured will have coverage and denials on account of pre-existing conditions are prohibited on penalty of fines – albeit nominal fines.

I blame the Republicans for their obstructionist tactics – they would not have settled for anything other than an emasculated piece of legislation. I blame Obama for focusing on what, at best, would have been nominal bi-partisanship – with perhaps one or two Republican senators voting for the legislation.

Obama took a hands-off attitude when it came to passing health care reform leaving it to the leaders in the Senate and the House for much of the past year – except to the extent that he said he wanted it to be bi-partisan. There has never been major social legislation in the past century when a president does not take a leadership role in the effort. This hands-off attitude combined with a futile attempt to obtain nominal bi-partisanship, resulted in delays that enabled the opponents of the legislation to engage in a campaign of disinformation and outright lies to create a public backlash – a public that was supportive of Obama’s aims until the summer of 2009.

When Lyndon Johnson passed the civil rights legislation, he literally cajoled, threatened, charmed and pressured members of the Senate and the House. The opposition Johnson faced was greater than Obama encountered on health care reform including from members of his own party – especially the Southern Democrats (then called the boll-weevils). He was undoing centuries of discrimination against a segment of the population and Johnson forced it through with some Republican support.

Can you imagine if Johnson had used the Obama approach to get civil rights legislation passed what the end result would have been?

So, in short, I am disappointed in the end result. I commend Obama and the Democrats for having passed legislation that provides coverage for tens of millions of Americans but it seems that a historic opportunity was lost in the process to pass meaningful reform.

Tags: CBO estimates of savings, Civil Rights Act, H.R. 4872, insurance industry give-away, Lyndon Johnson, misguided focus on nominal bi-partisanship, pre-existing conditions, Republican obstructionist tactics, The Health Care & Education Affordability Reconciliation Act of 2010, uninsured patients