Obama Is Wounded. Obamacare Is Unstoppable

Francis Wilkinson writes editorials on politics and U.S. domestic policy for Bloomberg View. He was executive editor of the Week. He was previously a national affairs writer for Rolling Stone, a communications consultant and a political media strategist.
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Los Angeles Times reporter Noam N. Levey ventures a bold story on Obamacare with a somewhat pedestrian subtext: It's a done deal, folks.

This quiet thesis has a lot going for it. For example, one reason the law is so complicated is that it created a raft of incentives to encourage health insurers, hospitals and other powerful constituencies to buy into its goals. That raft will now help keep the law afloat.

Here's Levey:

The value of the alliance between the administration and major insurers, hospitals, clinics and others in the healthcare industry can readily be seen in steps they have taken to help the White House overcome the rocky start of the law's new insurance marketplaces.

Insurers, for example, are working with the administration to enroll consumers directly in health plans for next year, bypassing the troubled HealthCare.gov website that residents of 36 states were supposed to be able to use to select a health plan.

Major retail pharmacies, such as CVS Caremark, have agreed to market the law's benefits in their stores. And hospitals and health clinics in many states are helping patients sign up for coverage.

There is also the issue of revenue to hospitals that treat uninsured patients, giving those hospitals a reason to support Obamacare's expansion of coverage. Under the new law, government payments to hospitals for treating uninsured patients are set to decline more than $30 billion over the next decade. Hospitals had expected to recoup that loss from an increase in patients insured through Obamacare. If red states continue to oppose the law's Medicaid expansion, hospitals in those states will suffer and clamor for relief.

At which point Republican governors can decide to A) let local hospitals decline and patients suffer, B) find state revenue to provide relief, or C) accept Obamacare's Medicaid expansion, in which the federal government picks up the tab for three years and picks up 90 percent of the cost thereafter. (I'm guessing Door #3.)

President Barack Obama has suffered mightily for the faulty launch of his signature product line. It damaged his reputation for competence and led to much bigger play for stories of people with individual plans losing their insurance. That, in turn, further damaged his credibility due to his "if you like it, you can keep it" promise.

Obama may never win back all the trust he has lost. (He could even lose more -- though I think he has an unusually high floor.) His second term was bound to be a partisan hell regardless, but sagging popular support will weaken his capacity to maneuver within Washington's peculiar inferno.

The fate of Obamacare is another matter. Unless the exchanges for individual insurance policies prove to be a complete disaster -- with only the old and sick signing up for policies -- they will gradually add another pontoon to support the law. There is some evidence from up-and-running state exchanges that they may actually turn out to be, over time, a modest success. Who will sponsor the legislation to cast those consumers back into the world of pre-existing conditions and arbitrary cancellations of policies?

Meanwhile, millions of people not living in states where ideology has bludgeoned humaneness into a political pulp will be added to Medicaid rolls. Who will champion the plan to eliminate their insurance?

It's quite possible that Obamacare will be a sufficient liability to cost Obama his popularity and Democrats their Senate majority. The party and individual politicians may sink for a time. (They may also recover far faster than many suspect. We live in volatile times.) But unless Obamacare is far more troubled than it now appears, the law will not sink. It floats.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Frank Wilkinson at fwilkinson1@bloomberg.net