Obama’s Hole Card: Preexisting Conditions

Here’s my idiosyncratic halftime take on the White House’s goal at today’s healthcare summit. The one topic that Democrats keep hammering on over and over is the problem of insurance companies refusing to cover people with preexisting conditions. “This is an area where we can come together,” Obama says. Republicans, in contrast, have been relentlessly trying to talk about everything but this. They’ve barely acknowledged the preexisting conditions problem at all.

For Obama, this is the ballgame. My guess is that he wants to maneuver Republicans into either (a) admitting that they’re unwilling to regulate this, which would be highly unpopular, or (b) admitting, however grudgingly, that the practice needs to be banned. Because if they admit it has to be banned he can make the following argument:

  • If insurance companies are forced to take on all comers, then people can game the system by buying insurance only when they get sick. This would obviously decimate the private insurance industry.
  • So you have to require everyone to buy insurance at all times. It’s the only way to have a broad pool that keeps costs down (another frequent Obama talking point.)
  • But obviously you can’t force poor people to buy insurance they flatly can’t afford. So if you mandate coverage, then you have to subsidize low-income families that can’t afford insurance, and you have to provide incentives for small businesses so that they can cover their employees.
  • And if you do that, you have to have a funding source. Preferably one that also helps rein in premium costs. Like, oh, an excise tax.

This seems to be the direction he’s trying to push things. The question is (a) can he force Republicans to address this? and (b) can he then make the rest of the argument in plain enough terms that it makes sense to everyone?

This is, basically, a debating trick, and Republicans obviously want to avoid getting sucked into it. This is why they try to mumble a bit about high-risk pools and then quickly move on. But the preexisting conditions problem is one of the few issues that almost universally resonates as unfair with the public, and Obama’s job is to get everyone to understand what it takes to fix it. If he does, he’ll come out of today’s summit in better shape than he went in.


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