Topics: Barack Obama

Obama won't make insurers his punching bag because he needs them

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As problems facing the implementation of President Obama's health care law continue to mount, the administration is in a bind when it comes to the health insurance industry.

On one hand, insurers are an easy villain to blame for rate hikes and cancellation notices facing millions of Americans. But at the same time, their participation is essential to the success of the law.

“For the life of me, I do not understand why we as Democrats are not aggressively blaming that on the insurance companies,” Celinda Lake, a top Democratic pollster, said last week at a breakfast sponsored by the Christian Science Monitor, as reported by the Washington Examiner's Paul Bedard. “They are a fantastic enemy in this.”

Initially, Obama and his allies did attempt to blame insurance companies when it became clear his promise — that under his health care program everybody who liked their plans could keep them — would be broken.

“Nothing in #Obamacare forces people out of their health plans,” Obama adviser Valerie Jarrett wrote on Twitter on Oct. 28. “No change is required unless insurance companies change existing plans.”

Two days later, Obama himself said canceled policies were “cut-rate plans” offered by “bad apple insurers.”

But in a Nov. 7 interview with NBC’s Chuck Todd, Obama was more contrite, arguing that he really did intend to let everybody keep their plans, but the law simply wasn’t crafted carefully enough.

“I am sorry that they — you know, are finding themselves in this situation based on assurances they got from me,” Obama said of Americans who were losing their current coverage.

The turnaround was the latest in an erratic relationship between Obama and the insurance industry.

During the 2008 campaign, Obama would often use the industry as a punching bag. After he got elected, he aimed to defang insurers along with other special interests in the health care industry.

This was an attempt to avoid a repeat of the failed Clinton-era health care push in 1993 and 1994, when the insurance industry launched an aggressive campaign against reform legislation.

Even before Obama took office, insurers had vowed broad support for reforming the health care system as long as new regulations such as one requiring them

to cover individuals with pre-existing conditions were coupled with a mandate forcing individuals to purchase insurance and generous subsidies to help them in doing so.

During the health care debate, insurers opposed elements of the legislation — such as the Democrats’ efforts to include a government-run “public option” within the exchanges and federal regulations dictating the percentage of insurers’ revenue that had to be paid out in medical claims. But they avoided a large-scale public campaign against it.

Obama vacillated between welcoming the participation of all “stakeholders” and attacking insurers when the going got tough.

As public support for health care legislation began to fade in the summer of 2009, Obama switched to calling his initiative “health insurance reform” rather than just “health care reform,” in part to make it easier to blast insurance industry practices.

But now that the law is in the midst of a troubled implementation, Obama cannot unleash a full-scale attack on the insurance industry.

If insurers decide to pull out of the new government-run health insurance exchanges, it would cripple the entire law.

Also, if the technology problems confronting the law aren’t resolved soon, one potential Plan B could involve relying on private insurers to help enroll Americans directly rather than through the government website.

It’s also important to keep in mind that the core purpose of Obama’s health care program is to get as many Americans covered as possible.

But it would undermine the administration’s public outreach effort to convince Americans to sign up for coverage if officials were constantly trashing private insurance.

This is why, no matter how tempting it may be, Obama will likely hold back from launching an all-out assault on insurers.

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