The top priority of every first-term president is to become a two-term president. Since healthcare reform was Obama’s central domestic campaign promise in 2008, he must pass a healthcare reform bill of some kind before 2012. With large majorities in the House and Senate, along with the momentum of a fresh election victory, 2009 is the year in which a bill is most likely to occur. Failure to pass a healthcare bill will be seen as a major defeat and encourage members of Congress to distance themselves from a president seen throughout Washington as weak.
So, to maximize their chances of reelection the Obama administration needs to pass a healthcare reform bill and needs to do so soon, preferably before the 2010 campaign season begins. The question is: what sort of bill is most likely to aid in winning reelection? Here, there are two factors working against each other. One the one hand, health insurance companies are quite unpopular with a large majority of voters, while government-provided healthcare plans (such as Medicare, the VA, or various proposed public plans) have widespread popular support. However, while health insurers may be unpopular with the public, the money they inject into the political system could have a huge impact on the midterms in 2010 and Obama’s reelection campaign in 2012.
Clearly, the optimal outcome for the Obama administration is to pass a bill that seems to the majority of the voters likely to expand coverage, reduce costs, and reign in the excesses of the insurance industry all the while doing nothing to reduce significantly the power and wealth of the insurance companies. A bill with indivdual mandate and a public option trigger is the best way to accomplish this. It allows Obama to go before the voters and claim two major victories over the insurance companies: an end to the denial of care to people with pre-existing conditions and the threat of a public option should the insurance companies fail to reign in the growth of premiums and deductibles.
A bill with mandates and a trigger will also likely win the eventual support of the insurance industry. The trigger will almost certainly be written in such a way as to ensure it never takes effect. An individual mandate to purchase private health insurance enforced via a fine of several thousand dollars will be strong enough to guarantee a growing customer base, and loopholes can be found in the ban on discrimination based on pre-existing conditions.
If the Obama administration, with the support of the Blue Dogs, can succeed in passing a healthcare reform bill that includes a weak trigger, a strong individual mandate to buy private health insurance, and a ban on discrimination based on pre-existing conditions with sufficient loopholes in it, then they will most likely prevent the deployment of health insurance industry money against them in the 2010 and 2012 elections. There is even a strong possibility that the Democrats could surpass the Republicans in fundraising within the health insurance industry.
The simple political fact at the heart of the healthcare debate is that the interests of the Obama administration conflict with the interests of the majority of voters and especially with the desires of the Democratic base. Most Americans would benefit from a bill that expanded government provision of health care and decreased the wealth and political power of the health insurance industry. The Obama administration’s interests are best served by passing a bill that appears to do so, but, in fact, directs billions of dollars in public funding to the insurance companies while also forcing millions of struggling Americans to turn over their hard-earned money to the insurance companies as well.
The political benefits from passing a with both a strong individual mandate and a trigger will accrue to the Obama administration beginning the second Obama signs it into law. They will be able to run ads throughout the next two elections touting their great success in expanding health insurance coverage and ending discrimination based on pre-existing conditions, while at the same time enjoying parity, if not superiority, with the Republicans in insurance industry campaign donations. Any political backlash from voters who will suffer under the bill, however, can be put off until after Obama is reelected by not having the worst parts of the healthcare bill take effect until 2013.