Obama healthcare drive looking sick

June 22, 2009

James Pethokoukis – James Pethokoukis is a Reuters columnist. The views expressed are his own –

What just happened to American healthcare reform?

The political prospects for major U.S. healthcare reform have taken a decided turn for the worse in recent days (at least from the point of view of many Democrats). And you don’t need to be some totally plugged-in Washington insider to understand that.

Just take a look-see at the stock market performance of industry players such as Aetna Inc, Cigna, UnitedHealth Group, and WellPoint. Shares have been trending higher of late. What’s been slowly dawning on Wall Street is that the legislative process in Washington is unlikely to produce a national public health insurance option that could eventually squeeze out the private sector.

Fact is, the prospects for any sort of bill that would produce major changes are in as much doubt as at any time since President Obama took office. Worried that the plan was growing too expensive, the critical Senate Finance Committee appears to have jettisoned any idea of a public plan option and is also cutting back on subsidies to help fully insure the nearly 50 million Americans who don’t have health insurance for one reason or another.

So what just happened? How is it possible that Democrats cruised to a huge victory on Election Day in November 2008 and are yet again unable to make good on their top legislative priority? Why are the ghosts of Bill Clinton’s 1994 healthcare reform debacle suddenly flitting about Capitol Hill?

What happened was the Great Recession, the political impact of which the Obamacrats completely misunderstood. Oh, they knew the financial and economic crisis helped sweep them to office. That part they got just fine.

But they also assumed that the downturn would create such a sense of economic insecurity that time would be ripe for the sort of expansive, government-led healthcare changes that the party has been dreaming of for two generations.

Instead, the Great Recession made healthcare less of a priority for voters than economic recovery — as fast as possible, please — and job creation. A recent spate of polls shows concern about healthcare (and climate change and pretty much everything else) lagging concern about unemployment.

Healthcare lags concern about the shocking enlargement of the federal budget deficit, which has grown partly due to government actions — such as the $800 billion Obama stimulus package — to deal with the recession, as well as by the decline in tax revenue caused by the downturn itself.

And then this week, the Congressional Budget Office, the respected arbiter of what new government programs might cost, calculated that the Senate Finance Committee’s health reform bill would cost more than $1.6 trillion over 10 years. That was determined to be a political no-go by Senate Democrats– a smart conclusion given the recent polling — and the committee moved on to a still evolving plan B.

It is also ironic that the Obama administration, so aware of the latest research in behavioral economics, would forget about a phenomenon called “loss aversion”, which suggests people feel the pain of financial losses more acutely than comparable gains. Seems the whole healthcare plan was built up on the theory of losing something now — such as tax-free, employer-provided health benefits — for something later, like lower costs and a more sustainable government fiscal situation. To recession-shocked voters, that probably doesn’t seem like a more economically secure situation at all.

(Editing by Martin Langfield)

14 comments

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It really is about the economy, even with the LAPD.

You know, the only thing keeping people with money here is the courts and justice system.

But, in LA, the LAPD is violating the rights of individuals by circumventing due process.

After all, crime is way down in LA, so the officers have to show something for their salary.

Well, if the police are allowed to rear their ugly rights violation head…..then other countries start sounding better dont they.

We are on the verge of scaring a lot of productive people out of this country.

Posted by LAObserver | Report as abusive

I think the Health care bill should go by the way side. They should be working on tort reform to reduce the medical cost to Doctors and in turn us.
They should be training more medical people. My step daughter cannot even get into medical school for nursing.
Let’s work on the basic problems first.
What about the President down to the last Congressman taking a 50% pay cut until all these problems are resolved?

Posted by Evan | Report as abusive

Now a big government agreement with large drug companies that will supposedly reduce the cost of Rx drugs for the elderly has been announced…much whining is already taking place on this issue. Perhaps if the big pharmacutical companies would stop flooding the TV airwaves with massive advertising campaigns for drugs that can only be obtained through a Rx written by a doctor, they could afford to lower the cost of all drugs without loosing any profits. These companies must spend massive amounts of advertising dollars trying to get the public to pressure their individual doctors to write prescrptions for their products. This practice is almost criminal in light of the excessive costs of health care today. Let the doctors, who are trained in this area, decide, without outside pressure, what is appropriate of his or her patients.

Posted by Rege Fechter | Report as abusive

How can a 1.6 trillion cost to insure approximatetly 15 million people and a per person cost of $50-60,000, be a good deal? These are the CBOs numbers.

Posted by Ron Means | Report as abusive

The fall back plan is to tax one out of every eight Americans combined with benefit cutbacks in Medicare and Medicaid. That sounds rational until you look at the overly optimistic numbers put out by the administration. That one in eight will quickly turn into one in six to, you guessed it, they’ll have their hands in every workers pockets to pay for socialized medicine. So at the end of the day what are you going to have? A bloated federal bureuacracy administering a program that is not sustainable even with the rationing of health care. Don’t try and sell us a terrible bill of goods.

Posted by Jim | Report as abusive

The reality is, some democrats are blue dogs, moderates who believe in fiscal responsibility. They are highly unlikely to vote to burden taxpayers with such a debt, unless it led to savings down the road. With such a high price tag, even for a 10 year estimate, they are of course dragging feet. We’ve gained plenty of debt in the last 8 years, the last thing we need is more.

Posted by Chris | Report as abusive

Why would Americans want another Government healthcare program?

Medicare & Medicaid are classic failures in US government intervention.

After visiting the US Post Office, one can only imagine how long the lines would be at Govt healthcare facility.

Just say “No”. — JLH

Posted by J L Harris | Report as abusive

Health care reform will not get far because Obama has failed to address the reluctance of Americans to pay for something we don’t use. Americans are willing to pay for emergency care for illegal aliens, but not their health insurance premiums too. Young American men under 30 don’t often get sick and resent having to pay for health insurance they seldom use, unless it is provided by their employers. Tax that benefit, and everyone will be against the overhaul plan. Obama asked every health care professional and pharmaceutical company to reduce prices, but he didn’t ask lawyers to cap the awards they are seeking in malpractice suits, so somehow we know that any overhaul plan put forth by Democrats will reward those trial lawyers at the expense of everyone else. Last but not least, Obama cavalierly spent trillions of dollars to stimulate the economy as if money grew on trees, so we Americans logically ask why Obama can’t go back to that magic tree and print more money to spend on reforming health care?

Posted by Greg | Report as abusive

As long as everything we as a society do is subject to cost benefit analysis, we will never come to reasonable solutions to fixing our failed healthcare system. That is because at some point one persons benefit will become another’s cost. At some point a moral imperative must prevail. One needs only to read Deuteronomy and Leviticus.

We should ask ourselves some questions. Is it right that Congressmen get excellent healthcare and pensions and the citizens they serve do not? Why did they cut funding for education and highways prior to the Stimulus? Veterans affairs and the EPA have suffered similar fates.

I would submit that the war and banking interests are paramount in the view of many legislators. There is no moral imperative for war and the profits garnered by industries involved. There is however a moral imperative to attend those in need. Healthcare is a need.

Posted by Anubis | Report as abusive

The blue dogs have received 6.4 million dollars in campaign contributions from health insurance companies.

The U.S. payed 2.5 trillion for health care last year. 47 million were uninsured and another 40 million could not afford co-pays. Either they went bankrupt or did not seek medical attention.

The U.S. Spent 6,500 dollars per capita for health care last year. We rank with third world nations for infant mortality, morbidity and life expectancy.

Germany, England, France, Japan, Canada spend between 3,000 and 3,800 dollars per capita last year for health care. Their infant mortality, morbidity and life expectancy all rank in the top ten world wide. They also cover all of their citizens.

Inflation for health care runs between 8% and 12% a year. President Obama is correct when he states health care will double in the next decade. Future prognosis is worse if we don not change this system.

The AMA has opposed Universal taxpayer paid healthcare since FDR. They still do. When I was in High School in the 1970s all the students with the best grades wanted to go to medical school or law school. They all stated “That’s where the big bucks are at”. I doubt little has changed from generation to generation.

Clearly we as a society we pay to much and receive to little for our health care dollars. Equally as clear greed is the motivating factor for those in the health industry who resist change.

Posted by Anubis | Report as abusive

I am so disappointed in my country when it comes to the health insurance issue. I know it’s a huge undertaking, but eliminate the health insurance industry – health care should not be a commodity it should be a right for all Americans. The comments by “Anubis” are exactly right on.

Posted by DManning | Report as abusive

I do not feel that mandatory universal healthcare is to the benefit of Americans right now.
We need to fix the mess we call the US Healthcare System.
1. There needs to be an absolute emphasis on prevention first. This includes diet, exercise, and other behavior which is conducive to good health.
2. Reform the system by eliminating so many middlemen. We have too many hands in the pot right now. Major operations and surgery are preposterously expensive. The insurance industry and lawyers make things more complicated and expensive as well.
3. It would be okay to have mandatory healthcare IF the first two conditions were met. (Right now, I am not willing to pay for healthcare personally because I am healthy and I feel that I won’t get anything for my dollars anyway.)

Posted by Don | Report as abusive

Why they don´t stop that wars in middle east, and give us more health benefits, our taxes, are using just for make war, and give more powers for this goverment of richest. This nation was the best, for us, for the masses. America need to restart, we need a new goverment, obama its a clear deception.

What is going to happen to critically ill newborns and infants? I will probably not live beyond 65 because the government feels I should learn to live with my problems rather that receive treatment and watch my kids grow up. From what I understand, our once great nation was based on “LIFE, Liberty, and the pursuit of happiness”. Well, now our life will be determined by the government’s version of Darwin’s “survival of the fittest theory”, our liberties will be based on Socialism, hence I am not very happy right now. All I know I will NOT vote for Obama, I am sure he will not be re-elected. We need to take care of the citizens of the United States first. If you choose to come to this country, earn citizenship legally.

Posted by Patti | Report as abusive