ObamaCare and the 2010 Elections

ObamaCare and the 2010 Elections

By David Gratzer - January 12, 2010

Because of our efforts, insurers are now required to cover reconstructive surgery for children with deformities.

Is that what Democratic candidates will say on the stump in 2010? After spending a year explaining the disaster of American health care and pushing for change, they can tout, short-term, only symbolic regulations of the insurance industry - regulations, incidentally, that already exist in many states.

The biggest issue of 2009 is shaping up to be the defining issue of the coming congressional races. And while the Democrats are now poised to pass sweeping health-reform legislation, polling suggests weakness, with a majority of Americans disapproving of ObamaCare. Even more problematic: that while middle Americans are suffering through a deep recession and fretting ever-rising health costs, Democrats have practically nothing to offer right away. Republicans should take note and take advantage.

Let's be clear: Democrats are in the cusp of a major victory with final legislation likely to pass in February. Robert Dallek, the presidential historian, has described this as "a minor miracle." He compares it to other landmark legislation: "on par with Franklin Roosevelt's 1935 Social Security law, and with Lyndon Johnson's 1964 civil rights bill, and the 1965 Medicare and federal aid to education laws."

But there's a catch. What exactly are Democrats going to say on the stump in the coming months? This much is already clear: Americans dislike the cost and size of the legislation championed by the president. And as vast as the legislation is - Senator Reid's bill is nearly 50% longer than anything proposed by First Lady Hillary Clinton back in the early 1990s - Democrats have little to offer voters this year.

Promises of symbolic insurance regulations are like thin gruel to serve a public hungry for substantial change. And Democrats will not have more to offer in 2010 - or for years after.

The reason? The White House and Congressional leadership considered it a priority to fare well with the Congressional Budget Office cost estimates over ten years, showing Americans that while their ambitions were great, they were being fiscally responsible. But ObamaCare is expensive, with lavish subsidies and expansions of Medicaid.

Democrats came up with a simple fix, and one that superficially worked. ObamaCare will reduce the deficit modestly over a decade, according to CBO scoring. To achieve these handsome numbers, Democrats made a grand bargain: their plan calls for taxes and cuts almost immediately, but new programs are phased in over time, with most Americans not even having the option of participating in ObamaCare until 2013 or later.

At the risk of stating the politically obvious: 2013 is years in the future.

You might want to avoid higher premiums by signing up for, say, the co-op insurance plan that Senators proposed - but it won't be sold most likely until January 2014. Many Americans probably won't be eligible to use it until later. If you're a cash-strapped parent hoping for insurance subsidies, keep hoping: While seniors see billions in cuts to Medicare Advantage up front, subsidies for ordinary Americans don't start until 2013 (House version) or 2014 (Senate). And the health-insurance exchanges that will finally offer you some much needed choice of affordable plans? You guessed it - nothing until at least 2013.

2013 is far into the future; two congressional elections, one presidential election and three giant federal budget deficits away, to be precise. If you believe the Mayan prophecies, the world will already have ended by 2012, long before any Americans see the supposed benefits of these "historic" reforms.

Even assuming that Democrats hang on, the arrival of 2013 is a mixed blessing. By the time ObamaCare starts offering millions of Americans new options - from subsidies to Medicaid enrollment to health-insurance exchanges - its biggest taxes will kick in. The 40% tax on so-called Cadillac heath plans starts that year. It isn't indexed (at least in the Senator Reid's bill), meaning that millions of Americans will quickly get hit. New York Times columnist Bob Herbert describes it as a "middle class tax time bomb."

From a policy perspective, ObamaCare is like bleeding a patient with leeches: messy, slow, and unhelpful. The CBO projects that health-insurance premiums will grow with these reforms; several analyses, including one by a federal agency, estimates that overall health costs will rise. Remember that the whole point of the exercise was to cut health-insurance premiums and "bend the curve" of health spending. It's not surprising that even an enthusiast like economist Paul Krugman concedes the legislation is "imperfect."

But ObamaCare's undoing will be political. It asks people to suffer now and - maybe, just maybe - enjoy its benefits later. For Democrats who have spent a year talking about the "fierce urgency of now," to use one of the President's much-quoted phrases, there isn't much to talk about on the stump. The temptation will be for Republicans to simply criticize. Some - including former House Speaker Newt Gingrich and several candidates - have already suggested that Republicans call for a full repeal of ObamaCare. 2010 could then be the year of undoing the damage of 2009.

But that promise seems to repeat the tactical mistake of Democrats - promising something sweeping that has no immediate benefits (Republicans, after all, stand little chance of repealing the bill for years). The GOP needs to do more - candidates need to offer something in ObamaCare's place. Democrats may have overreached, passing (along partisan lines) a cumbersome, expensive, and sloppy plan. But they also identified a major issue: the rising cost of American health care and the unease that middle America feels about their own coverage.

Republicans should describe an alternative: finding ways for middle America to cut its insurance bill by fostering competition, allowing states to make their Medicaid programs more cost-effective and, yes, effective, and encouraging Americans to reduce health costs by improving their overall health. Democrats have made the right diagnosis, Republicans can tell voters, but they have offered up the wrong treatment. American health care needs to be reformed, yes, but not with a massive expansion of government, but rather by looking to the principles that this made country great and prosperous: individual choice and competition.

It's a good line for a candidate. It would also make a good philosophy for a future Congress.

Dr. Gratzer, a physician, is a senior fellow at the Manhattan Institute and is the author most recently of How Obama’s Government Takeover of Health Care Will Be a Disaster.

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