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Obama's Axis of Evil on Health Care

Shikha Dalmia
August 16, 2009, 11:02pm

Oye Vey.

President Obama just doesn't get it. He has an op-ed in the New York Times this morning excoriating insurance companies for our allegedly crappy health care system, whose primary problem, btw, is no longer the large number of uninsured - but the crummy benefits those with the misfortune of having coverage get. That'll of course be news to the vast majority of patients who have repeatedly told pollsters that they are really quite satisfied -- thank-you, very much -- with their insurance plans. They are no doubts victims of false consciousness that the public option will have a way to cure!

There are too many internal contradictions in Obama's op-ed to get into here. But let me mention one very briefly: The administration has been claiming - and Rachel Maddow was regurgitating on Meet the Press just this morning -- that the public option, which is designed along the lines of Medicare, will keep insurance companies honest by forcing them to compete with the superior administrative efficiencies that Medicare offers. (Michael Cannon of the Cato Institute has debunked this laughable claim by pointing out that Medicare has bought these so-called "superior efficiencies" by, among other things, ignoring fraud). But the president's op-ed claims that he will pay for coverage for the millions of uninsured by "cutting hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid." So which is it? Is Medicare so efficient that it should serve as a model for the rest of the industry or so inefficient that making it more efficient can fund health coverage for all?

But I digress.

The most striking thing about the president's op-ed is the startling similarity between his approach to health care and Bush's approach to foreign policy. Bush was always on the prowl for "evil-doers" abroad. And Obama, it seems, is on the prowl for "evil-doers" at home.  First, he targeted evil Republicans who were blocking his reform. That didn't work, because, as it turns out, Republicans are not the main impediment to his government power-grab; Blue Dog Democrats are. Second, he went after Big Pharma. But Big Pharma buckled down and cut a deal with him. And now - in a calculated attempt to rile up middle-class anxieties about their insurance coverage eg its lack of portability - he is going after those Big Bad Insurance Companies. Talk about the axis-of-evil!

But this won't work any better than his previous efforts at demonization. No matter how much Dems dismiss folks at townhalls as stooges of the insurance companies, they are expressing a real fear out there that Obama's government-heavy prescriptions won't solve their real health care problems; they will make them worse by taking away the options they already have. Going after their insurance carriers only heightens that fear - not allays it.

Obama seems to be finally backing off on the public option. That's good. Robert Gibbs said on CBS's "Face the Nation" that the president "will be satisfied" if the private insurance market has "choice and competition." That would be really good - but only if Obama means what he is saying and starts examining government policies that have stymied more intense competition in the health insurance industry. These include all the laws that prohibit insurers from selling policies across state lines and the failure of Uncle Sam to give individuals buying coverage the same tax treatment that companies get.

But if he simply pushes more regulations and mandates such as "guaranteed issue" and "community rating" (the first forces insurance companies to sell coverage to everyone regardless of risk and the second tells what prices they can charge), he will drive many insurers out of business, producing more market concentration and less choice.

But the first thing he needs to do is drop his preoccupation with the enemy. It didn't serve Bush well. It is not serving him well. And it certainly won't serve the country well.


Shikha Dalmia is Senior Analyst


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