As Obama Unveils New Health Care Plan, Old Politics Await

President Barack Obama unveiled a revised proposal to reform the health care system Monday. While it may attract new public support, it's likely to encounter the same old resistance: partisan opposition in Congress.

Among other changes, the president has proposed the creation of a new Health Insurance Rate Authority to review changes in state-level health insurance premiums. The panel would "help States determine how rate review will be enforced and monitor insurance market behavior," the administration's proposal says. Controversial changes such as Anthem Blue Cross of California's recently announced 39% increase in premiums would presumably come under its review.Obama's plan also extends the 2.9% Medicare tax to unearned income (interest, dividends, royalties, rents, etc.) over $200,000 for singles and $250,000 for married couples; imposes a new $10 billion levy on the pharmaceutical sector; and scales back the tax on so-called Cadillac health care plans by increasing the tax threshold to $27,500 for a family plan, up from $23,000, effective in 2018.

New Support Sought

The proposed changes may sway more Americans -- particularly Americans of modest means and small business owners for whom health insurance premiums are quickly becoming too costly -- to support the new plan, but it remains to be seen whether that increased support will be powerful enough to overcome what has thus far been an irresistible force in Congress: the Republican Party.

In the last few months, Republicans in both the House and Senate have been remarkably cohesive in their opposition to Obama's initiatives, rejecting most proposals as 'big government' and as a 'government takeover of the health care system.' Republicans argue that the United States has the best health care system in the world, and that market-based incentives would be enough to address the system's deficiencies.

There's little in Obama's new plan that suggests the Republicans will be willing to deviate from their stance and work in a bipartisan manner. If anything, the Republicans may become more ardent in their opposition. Not only do they have a 41-seat, filibuster-capable caucus in the Senate, Republicans believe that the majority of Americans support them on key issues, particularly health care. Hence, they have considerable electoral incentive to obstruct, delay and denounce anything Obama proposes and simply run out the clock, confident that they will be rewarded with a huge victory on election day in November.

Beyond their confidence that most Americans support the GOP, and not the Democrats, Republicans are reluctant to vote for anything Obama proposes -- even if it is fair and is in the country's interest, since doing so would give Obama a victory. In contemporary Washington, when your opponent is down, you don't stick out a hand to help him up.

Obama has tried to argue that "the bottom line is that the status quo is good for the insurance industry and bad for America." That may very well be the case, but as polarized Washington has demonstrated, when the other party has filibuster power in the Senate and no interest in finding common ground, it doesn't matter what the impact of the current policy is. Barring some fundamental change, it will remain the law of the land.
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