Make no mistake, last night was a rebuke to President Obama’s promethean health care ambitions. While the economy was the first issue on voters’ minds, Obamacare was not far behind: According to the Wall Street Journal, nearly half of all voters (48 percent) believe it should be repealed. A slew of new Republican governors also campaigned (and won) attacking Democrats’ overreaching on health care; given the centrality of the states in Obamacare’s implementation, this portends massive new headaches for the president above and beyond anything congressional Republicans manage to do over the next two years.
Where did the president go wrong? Let us count the ways:
1. Paying lip service to entitlement reform while inflicting a massive new entitlement on the country. While the president talked a good game on reducing federal health-care spending, in point of fact he increased it. According to the Congressional Budget Office, over the next ten years the federal government will spend $401 billion more on health-insurance subsidies and Medicaid expansion — the apparent “deficit reduction” during the same period is only because Obamacare also raises $525 billion in taxes and fees. This is money drained from the private economy, sapping innovation and job creation.
2. Forcing bureaucratic health care ”reforms” down the nation’s throat using cynical legislative tactics and divisive partisan votes. Remember the Louisiana Purchase and the Cornhusker Kickback? Voters did. For a year, voters saw House and Senate leadership twisting arms and buying votes and shutting Republicans out of any meaningful role in writing health-care legislation. The only time the president deigned to discuss Republican ideas was to caricature them as straw men and then dismiss them out of hand. The problem is that major social policy initiatives — and overhauling the 20 percent of the U.S. economy spent on health care counts as “major” — have to be done with bipartisan support. Medicare and Medicaid, Social Security, welfare reform, No Child Left Behind, and even the Medicare Part D drug benefit all passed with significant bipartisan support. The president’s failure to move to the center to seek out those votes tainted both the process and the product.
3. Raiding Medicare to finance a new entitlement. The president promised seniors that they wouldn’t see any benefit reductions (the 25 percent of seniors with Medicare Advantage plans might beg to differ in the next several months). But what Obamacare does do is rob Peter to pay Paul — slashing payments for providers that will, according to the Medicare’s own non-partisan actuary, make many of them (15 percent by 2019, 40 percent by 2050) unprofitable. In effect, those providers will either have to stop seeing Medicare patients or go bankrupt — either way, Medicare beneficiaries will lose access to critical services. This approach, the actuary believes, is unsustainable, and Congress will step in to repeal the cuts as soon as they start to bite.
Add in backroom deals with various industry players and the AMA, Democrats overselling the initial benefits of the legislation (the major provisions don’t kick in until 2014), and the unintended consequences that have poured in over the last eight months — including higher insurance premiums, and businesses like McDonalds complaining they would be forced to drop coverage under new insurance rules — and you’ve got a perfect recipe for voter backlash.
Republicans, however, shouldn’t crow too loudly or for too long over their victories last night. The problems that President Obama identified (skyrocketing health-care costs that threaten to bankrupt state and federal budgets and sap ever more middle-class income) are all too real even if he got the solution wrong (bludgeon private insurance companies with new rules drawn up in Washington).
Succeeding in their “repeal and replace” strategy will require Republicans to make the case that they have a sane, incremental program for reforming health care that starts with injecting more competition into the system, empowering consumers to buy insurance across state lines, and developing (sustainable) Medicare and Medicaid reforms. This will inevitably entail seeking bipartisan support — and President Obama will likely veto any attempt to undo his signature domestic initiative for the next two years. But by moving quickly to offer better policies now, conservatives and moderates can set the framework for Obamacare’s final repeal — and real health-care reform.