Obama’s Speech: Reviving Health Reform

Henry J. Aaron
Henry J. Aaron The Bruce and Virginia MacLaury Chair, Senior Fellow Emeritus - Economic Studies

September 10, 2009

After the August congressional recess, health care reform was on life support. In a speech of remarkable force and eloquence on Wednesday night to a congressional joint session, President Obama made clear that he would use every resource available to him to assure that health reform survives to become law.

The August recess had left hopes for successful reform hanging by a thread.  The public had become confused and frightened by the prospect of fundamental reform.  Members of Congress were badgered by worried constituents, fearful that reform might jeopardize the relatively good insurance that most enjoy and fear to lose.  The president’s earlier message had been that fundamental change was necessary to preserve that coverage.  Without reform, he said, rising costs would make health insurance unaffordable.  The number of uninsured, which has increased for years, would continue to grow.

But the president had not offered a detailed plan.  Instead, he left the job of writing a bill to Congress.  Various committees came up with not one, but several.  None was complete.  None was fully paid for.  Critics subjected those plans to withering attacks.  Some criticism was substantive.  Much, however, consisted of distortion and misrepresentation—attacks on provisions not actually present in any bill and actively opposed by the president.  Although the bills explicitly excluded illegal aliens from public subsidy, critics falsely said they would be covered.  Where the bills proposed to provide information to the terminally ill, critics conjured up the bogeyman of death panels.  Critics alleged that the president planned a government takeover of health insurance, although he had made clear that his goal was to assure that people could choose among several competing plans and that no more than one would be a government-organized plan.  And at least one Republican opponent said the primary goal was to defeat reform of any sort because beating the president on this issue would cripple his presidency.

Twin Goals: Laying Down Specifics And Appealing To Moderates

President Obama had been curiously restrained in the face of these attacks.  That restraint ended Wednesday night.  His speech had two broad goals.  The first was to lay out specific elements of a reform plan.  The second was to secure a majority by reaching out to the moderates in both parties who had not yet decided whether to support or oppose broad reform.

The specifics in the president’s proposal were clear and easy to understand.  If people have insurance, they can keep it.  If they don’t have it, they will have to buy basic coverage.  Subsidies will be provided to make insurance affordable.  Insurers will not be able to turn people away or drop them if they become ill.  Insurance companies will be prohibited from setting limits on annual or lifetime benefits.  Exchanges will regulate the sale of health insurance to enforce these rules.  Drug benefits for seniors would be increased.

As important as clarifying his legislative goals was the need for the president to reach out to Republicans and Democrats who have not yet made up their minds about health reform.  Toward that end, he assured those concerned about burgeoning deficits that he would not sign a bill unless it was fully paid for.  Most of the added cost for subsidies to make insurance affordable would be offset by reductions in the cost of current programs, and if those savings were not realized, he endorsed automatic spending cuts.  To those concerned about costly malpractice litigation, mostly Republicans, he backed reform of medical liability law.  For those moderates of both parties who deplore how the tax system subsidizes the purchase of exorbitant insurance plans, he endorsed a tax on insurance companies that sell high-cost plans.  He reminded Republicans with whom Ted Kennedy had worked on other health care reforms that bi-partisanship should not be a dirty word.

The president explicitly couched health reform in moral terms, harkening back to the small-town values of an America in which neighbors help each other when in need.  But he also raised even higher the already huge political stakes of the health reform debate.  During the presidential campaign and even after, some doubted whether President Obama was serious about health care reform and willing to fight for it.  After his Wednesday night speech, no doubt can remain.  He pushed every political chip to the center of the table and called his opponents to show their hands.