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Universal Health Care Promised by Democrats Initially Will Be Modest, Observers Predict

September 3, 2008
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Amid the soaring rhetoric at the Democratic National Convention last week, in which presidential nominee Sen. Barack Obama, D-Illinois, promised to fight for universal health care coverage if elected, observers expect his initial health care agenda to be much more modest.

In his acceptance speech, Obama said, "Now is the time to finally keep the promise of affordable, accessible health care for every single American."

That pledge made to a huge crowd in Denver came after the adoption of a party platform saying that Democrats are "united behind a commitment" of universal coverage.

The platform also said health care was a shared responsibility between employers, employees, insurers, providers and the government. Indeed, the platform decisively rejected a single-payer health care system, adding that employers should have incentives to offer coverage.

But, echoing what Obama already had endorsed, the platform calls for a public health care plan. Details on how such a plan would work weren't provided, but Obama has said such a plan, funded by employers that don't make a meaningful contribution toward their own health care plans, would be available to individuals not covered by employer plans.

Additionally and following an idea Obama has advocated, the platform backs a new federal health reinsurance program in which the government would assume liability for catastrophic health care claims, an idea that surfaced 15 years ago as part of a sweeping health care reform package then pushed by the Clinton administration.

While the promise of universal coverage makes for a good sound bite, political observers say the health care reform goals of Obama, if elected, would be much more modest, at least in his first year or two in office.

"Rhetoric is easy. Policies are much harder to implement," said Grace-Marie Turner, president of the Galen Institute, an Alexandria, Virginia-based health policy organization.

"Don't expect big, broad changes in the first year. Comprehensive health care reform takes time and education," said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington.

In fact, Obama and many members of Congress haven't forgotten the last time a Democrat—Bill Clinton—was elected president and promised to quickly enact a universal health care program.

"Congress has the memory of an elephant. The experience of 1993-94 looms large," McArdle said, referring to the collapse of the Clinton health care reform plan.

The plan's failure was widely attributed to the political naiveté and arrogance of then-first lady Hillary Rodham Clinton, now a Democratic senator from New York. As chairwoman of the task force that put the plan together, she largely shut out key legislators in drafting the plan and in trying to build support for it. The plan overreached, largely knocking out employers and insurers in favor of regional public health care cooperatives.

Rather than quickly seeking enactment of a universal health care reform plan—a costly and difficult venture, an Obama administration's first steps in the health care arena are likely to focus on expanding coverage through existing popular public programs.

These include the State's Children Health Insurance Program and possible expansion of the federal Medicare program to early retirees, who often find it tough and expensive to obtain coverage in the individual market if they are not covered by their former employers.

"You may see additional options for early retirees—perhaps, some kind of Medicare buy-in," McArdle said.

Whatever direction Obama, if elected, chooses to go in the health care reform arena, his approach in trying to get such legislation passed will be very different than that of the Clintons, especially Sen. Clinton, who excluded legislators in the drafting process and later bashed critics rather than trying to work with them.

"Politicians have learned a valuable lesson since 1993. You don't give Congress a finished product. You don't work behind closed doors and you don't ignore major stakeholders," said James Gelfand, senior health policy manager at the U.S. Chamber of Commerce in Washington.

"The Clinton way was, do it ‘our way or the highway.’ Democratic strategists know that isn't going to work," the Galen Institute’s Turner said.

The approach taken by an Obama administration would be to "set the policy objectives and let Congress fill in the details. As a senator, Sen. Obama has a much better sense of the normal give and take between the legislative and executive branch and that will be a plus" in drafting and trying to get legislation passed, McArdle said.

With the Clinton plan failure as a lesson, an Obama administration would be careful not to alienate key stakeholders, observers say. In fact, the Clinton plan to kick out commercial health insurers from the health care delivery system led the industry to launch an advertising campaign against the plan. Ultimately, that campaign proved extraordinarily effective in undermining public support, especially among those satisfied with their current coverage.

Obama's aides "have learned. Don't threaten the coverage people currently have," Gelfand said.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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