By Yuval Levin
Friday, November 15, 2013
The most important thing about the policy move announced
by President Obama on Thursday is not its practical significance—which is
frankly very hard to predict—but rather what it tells us about the mindset of
the president and his top lieutenants. In that respect, I think the past few
days have marked a significant change, and signaled a new and unprecedented
level of panic and chaos.
The immediate purpose of the step the administration
announced was, ironically, pretty much the same one that moved the president to
falsely claim for three years that anyone who liked his insurance plan would be
able to keep it: to calm down congressional Democrats and keep them unified.
The president moved to permit insurers to renew plans that do not comply with
Obamacare’s requirements because it looked like legislative proposals to do
that were going to win the votes of large numbers of Democrats in both houses,
and so effectively fracture the gritted-teeth Democratic unity that has been
the only thing sustaining the cause of Obamacare in our politics since before
the law was enacted.
If many dozens of House Democrats broke with the
leadership and the president to vote for the Upton bill (which would allow
insurers to keep selling any 2013 plans they wanted to all comers next year),
they might well never come back to the Obamacare fold, and the inevitable
fights to come would be all the more painful for the president. If the Senate
Democrats championing the Landrieu bill (which would impose a
guaranteed-renewability requirement on all 2013 plans, overriding Obamacare’s
qualified-coverage mandates) got their way, they would expose deep divisions in
the Democratic caucus that Harry Reid has worked for years to hide (mostly by
avoiding difficult votes) and put the president in the position of seeming to
be reprimanded by his own party. If both bills passed, the result of a
conference committee between them could well be unbearable for the president in
both political and policy terms. Obama evidently decided he should do whatever
it took to avoid those immediate undesirable consequences, regardless of the
longer-term cost. This was the same sort of thinking that led him to repeatedly
promise people they could keep any plan they liked in order to keep the
extremely precarious Obamacare coalition of Democrats together in 2010 and
after. The idea is to get past the immediate political problem and worry about
the bigger problems you create later.
The move also shared some means in common with previous
instances of such expediency—like the delay of the employer mandate in July,
for instance, which was a huge and early sign of implementation problems. The
administration yesterday basically said that, although all the rules that have
required the cancellations of millions of insurance policies technically remain
in effect, the government will refrain from enforcing them against insurers who
allow current customers to keep their existing plans for another year.
Presumably (although I don’t think they have made this clear), they will also
not enforce the individual-mandate penalty against people who stay in such
plans. They aren’t working with Congress to change the law—in fact the whole
point is to avoid that. And they aren’t changing the regulations they
themselves have promulgated to enforce it. They’re just telling insurers and
consumers that it’s ok to violate the law next year. And they’re asking state
insurance commissioners to do the same.
The callous disregard for the very idea of law inherent
in this manner of governing is matched by the overt cynicism of the move
itself: After having created the circumstances in which millions of people lose
their health coverage, the administration imagines this latest move can allow
Democrats to say that the president and his health reform are not at fault but
insurers and state insurance commissioners are because, after all, although
they have had to prepare to follow the law for three years they now have thirty
days to prepare to ignore it. The president was incredibly explicit about this
in his press conference on Thursday, saying “the key point is, is that it
allows us to be able to say to the folks who’ve received these notices, look,
you know, I, the president of the United States, and the insurance model of the
Affordable Care Act is not going to be getting in the way of you shopping in
the individual market that you used to have.” I guess they’ve got reason to
think people will believe anything they say, but it’s still hard to imagine
that argument working.
Even though the White House has done this sort of thing
before, however, I think this particular exercise in imprudent expedience will
carry particularly high costs, and those costs will not be all that far in the
future. To address his very near-term political problem, the president has
thrown the nation’s health insurers under the bus, even though he desperately
needs their cooperation and support to mitigate the immense problems that the
implementation of Obamacare now confronts. The response of the insurers, in the
form of a statement put out by their industry group Thursday afternoon, was
harsher than anything they have had to say about Obamacare since its inception,
and it seems pretty clear that their basic disposition toward the
administration and the law will now be changing for the worse. The insurers
have no one to blame but themselves—they made a deal with Obamacare’s champions
early on, knowing it was a gamble. But of course, they won’t be blaming
themselves, and by turning them into scapegoats at this point the White House puts
its effort to salvage something of Obamacare’s launch in even greater peril.
Perhaps even more importantly, today’s move could put the
exchange system itself in significantly greater peril too. It is very hard to
know how many people will actually be keeping their 2013 plans as a result of
this new policy, and of course it is also still possible that Congress will
pass legislation. But by allowing insurers to keep current customers in
pre-Obamacare plans outside the exchanges, and by letting the insurers choose
which plans to keep, the administration makes it more likely that the exchanges
will not be able to achieve the volume and the risk-balance necessary for them
to function. The White House understands that, of course, and the decision to
take this step suggests that they think the risk is worth it not just because
the immediate political danger is so great but also because the chances of the
exchanges actually functioning anyway seem lower and lower all the time.
That, to my mind, is what Thursday’s announcement really
signals, and why I think it’s so significant. Prior instances of reckless
presidential expediency in the debate over Obamacare have involved efforts to
get past some immediate obstacle and just get the system into place, in the hope
that once it was working the criticisms would fade away. This latest instance,
however, involves roughly the opposite impulse: to sacrifice the prospects of
the new system itself in the service of avoiding immediate political pain and
embarrassment and without some larger goal in view.
It suggests that the administration is giving up on the
long game of doing what it takes to get the system into place and then trusting
that the public will come around and is adopting instead the mentality of a
political war of attrition, fought news cycle by news cycle, in which the goal
is to survive and gain some momentary advantage rather than to achieve a large
and well-defined objective. It suggests, in other words, that the
administration is coming to the view that Obamacare as they have envisioned it
is not really going to happen, that they don’t know quite what is going to
happen (and no one else does either), and that they need above all to keep
their coalition together and keep the public from abandoning them so they can
regroup when the dust clears.
The president, in his Thursday press conference, did not
treat November 30 as a key date. He did not suggest that there was just one
large obstacle to overcome and then things would be fine. He did not say the
product was good but the website is bad. He said things like this:
But even if we
get the hardware and software working exactly the way it’s supposed to with
relatively minor glitches, what we’re also discovering is that insurance is
complicated to buy. And another mistake that we made, I think, was
underestimating the difficulties of people purchasing insurance online and
shopping for a lot of options with a lot of costs and lot of different benefits
and plans and somehow expecting that that would be very smooth, and then
they’ve also got to try to apply for tax credits on the website.
These are the words of a man who has had to internalize a
lot of grim briefings lately, and to come to terms with some painful realities.
And the decision the president announced is the decision of a man who has to
just think about politics day by day now, rather than in terms of large goals
and visions.
It may turn out, of course, that the situation of
Obamacare and its champions is not in fact this dire, that the exchange system
will find some balance relatively soon and function in a way that bears some
resemblance to how it was designed to work, and that the politics of health
care in 2014 will be more mixed and complicated than the fiasco the Democrats
now face. But the last few days have suggested that Democrats, including the
president, are beginning to lose faith in that possibility.
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