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Obama Targets Insurers in Health Reform Push

March 8, 2010 at 12:00 AM EDT
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During a Monday appearance in Philadelphia, President Barack Obama took on insurance companies and struck back at Republicans in a bid to propel his health reform proposal forward. Ray Suarez talks to two health policy experts.

JUDY WOODRUFF: Now: President Obama takes to the road on health reform and turns up the heat on insurers.

Ray Suarez has the story.

RAY SUAREZ: The president appeared outside Philadelphia today, commencing a full-bore effort this week to win final passage of health care reform.

U.S. PRESIDENT BARACK OBAMA: We can’t have a system that works better for the insurance companies than it does for the American people.

RAY SUAREZ: Mr. Obama defended his proposal as a way to rein in unfair practices by the insurance industry. At the same time, he charged Republicans did nothing when they were in power. And he said their ideas would only make things worse.

BARACK OBAMA: This is what we heard at the health care summit. They said, well, you know what? If we had fewer regulations on the insurance companies…

BARACK OBAMA: … whether it’s consumer protections or basic standards on what kind of insurance they sell, somehow, market forces will makes things better.

Well, we have tried that. I’m concerned that would only give insurance companies more leeway to raise premiums and deny care.

RAY SUAREZ: The president cited a recent report by Goldman Sachs that insurance abuses stem from a lack of competition. And Health and Human Services Secretary Kathleen Sebelius wrote to company executives today. She urged them to “post on your Web sites the justification for rate increases.”

ACTOR: Health care reform again, huh?

RAY SUAREZ: Back in 1994, the industry’s “Harry and Louise” ads helped sink President Clinton’s reform efforts.

In contrast, the Obama administration initially tried engaging the industry. At last year’s health care summit, industry spokeswoman Karen Ignagni talked of having to earn a seat at the table.

KAREN IGNAGNI, president and CEO, America’s Health Insurance Plans: We want to work with you. We want to work with the members of Congress on a bipartisan basis here. You have our commitment. We hear the American people about what is not working. We have taken that very seriously. You have our commitment to play, to contribute, and to help pass health care reform this year.

RAY SUAREZ: So far, the insurers say they still support health reform overall, but they say the real problem is out-of-control inflation in the cost of health care itself.

For a closer look at the president’s latest tack, we turn to two longtime observers of health care policy. James Morone is chair of the Political Science Department at Brown University and co-author of the book “The Heart of Power: Health and Politics in the Oval Office.” And Jonathan Oberlander, professor of social medicine, health policy and management at the University of North Carolina in Chapel Hill.

Professor Oberlander, what you heard from the president today, does that represent a new rhetorical salvo in this ongoing health care debate?

JONATHAN OBERLANDER, professor of social medicine, Health Policy and Management, University of North Carolina: Yes, it does.

Really, the Obama administration has tried during the first year of health care reform to work with the insurance industry. And I think what they have fallen back on at the end of this process is to frame this as a debate of the Obama administration against the insurance industry.

RAY SUAREZ: James Morone, is that a worthwhile target? Is that going to work?

JAMES MORONE, political science department chairman, Brown University: Yes, it certainly is what they have to do.

They have been so deep in the policy weeds that they have left the other side, again — this always happens with Democratic efforts to pass national health insurance — they have let the other side get the sound bite about the debate, death panels this time, Harry and Louise last time.

They need their own distilled version, “Here’s what we’re going to do,” for you in a quick sound bite. And that, finally, is what Obama is doing now.

RAY SUAREZ: Is that, in part, Professor Morone, because this is such a difficult subject? Today, the president was talking about really concrete things…


RAY SUAREZ: … premiums, denials of coverage, and on and on.

JAMES MORONE: Exactly, Ray. We can put the whole audience to sleep when Jon and I start talking about the details of health reform. It’s very tempting to get deeper and deeper into the details.

But what you have to have is a narrative that connects — that connects all these details to a story the people can buy. And any narrative has to have a problem, a solution and a villain. And, finally, Obama has found just those three things.

RAY SUAREZ: Professor Oberlander, is there a risk involved in an industry that you have been courting for almost a year now, trying to make them into an enemy?

JONATHAN OBERLANDER: Yes, I think there is a political risk here. The insurance industry has shown in the past that they can fund campaigns against health reform that are quite effective.

But, from the Obama administration’s perspective, it’s probably worth the risk. And I think there is one other thing it’s important to realize is going on here. To the extent that this health reform debate is about the uninsured, I think the Obama administration and the Democrats lose it.

Their big failure in the past year has not been reaching insured Americans, who, after all, represent 84 percent of the country.

JAMES MORONE: Yes. Good point.

JONATHAN OBERLANDER: And by reframing the debate about insurance regulation, it’s a way of bringing the insured into the health reform tent.

RAY SUAREZ: Ah, but isn’t there a difficulty, because people have ambivalent feelings about their insurers? Public opinion researchers ask them, and two-thirds say they like their coverage, and two-thirds say the system is broken.

Professor Morone?

JAMES MORONE: Yes, exactly.

What you have to remember about health insurance polls is that people feel lots of anxiety, and the numbers are always quicksilver. They dart hither and yon, so that anybody who reads a poll on national health care and takes it as serious, fixed numbers is only going to get blown away the next time you get a exchange in the debates.

People are anxious. They’re often satisfied with their own health care, as you just said, Ray, but fearful about what could happen. And, so, public opinion has to be shaped and formed, rather than taken as a given.

RAY SUAREZ: Professor Oberlander, same question.

JONATHAN OBERLANDER: Well, you know, I think it’s important to realize that most people don’t use a lot of medical care in a given year.

So, when we hear these surveys…

JAMES MORONE: Yes. Good point.

JONATHAN OBERLANDER: … that 70 percent of Americans are satisfied with their coverage, well, they’re satisfied because their employer is paying most of the bill, and they’re not using medical care very often.

If you look a little bit below the surface and you look at people who are chronically ill and use a lot of medical care, they’re much less satisfied with insurers. In addition, while people are satisfied overall with their coverage, the same survey showed that they’re worried about the cost of care and they’re worried about the prospect of losing their coverage.

And, frankly, they should be.

RAY SUAREZ: As you look at the long trajectory of this debate, Professor Oberlander, was the administration late in getting to this kind of concrete example of why people — or why they would suggest people should be for health care reform?

JONATHAN OBERLANDER: Well, there’s no script that tells you how to pass health care reform, because lots of presidents have tried, and lots of presidents have failed.

And I think what the Obama administration did is, they took the last script that was used, the strategy that Bill Clinton used in 1993 and 1994, where they really vilified the insurance industry, and they made them an enemy.

And they proved to be a very effective adversary. And they helped sink reform. And so what the Obama administration did is say, let’s do the opposite of what Clinton did. Let’s bring them in the tent.

And, so, I’m not sure it was a mistake. The fact is, there’s no perfect way to do this.

RAY SUAREZ: Professor Morone?

JAMES MORONE: It would not — we have been working on this since 1915. If it were easy, if as Jon says, there were a script to succeed, we would have figured it out long ago.

We ought to note that the Obama people have gotten this through both House and Senate for the first time since we have been seriously arguing about it in Congress. And that would be 1938. So, they have played the inside game really quite brilliantly.

As to the outside game, remember, this is a bill that actually helps the insurance industry. It’s like Franklin Roosevelt saving the banks. It’s like lots of other examples in American history where the industry is actually helped and protected from some of the more outraged critics, in this case, people demanding a single payer.

I think the insurance industry will not roar back when they think about what some of the alternatives are to the Obama plan, which leaves them a very large role in American health care.

RAY SUAREZ: Professor Morone, Professor Oberlander, gentlemen, thank you both.


JAMES MORONE: Thank you, Ray.