Reading Between The Lines Of The President's Address

Much ink and airtime have been invested since Wednesday night in critiquing the President's health care reform address. I have just a few thoughts:

1) The President gave an okay speech, but touched on relatively few new ideas. I thought his principal audience was House Democrats, particularly those on the left. He sought to assure them that he hadn't abandoned a few core issues...like a public health plan option...even as he virtually asked them not to abandon a health care bill which probably won't contain one.

It's pretty clear to me that a public option is probably not going to be included in a final bill. After the speech, both House Speaker Pelosi and Senate Majority Leader Reid backed off insistence on a public plan, except as a back-up measure in the event legislated insurance reforms don't work. And if one were to be enacted, it would be way down the line.

From the beginning, my prediction has been that the House might pass a bill containing a public option (though it would give the Blue Dogs fits), but the Senate won't, and the final bill would contain a provision to enact a public option only if the insurance industry were, after at least five years, unable to reduce costs and increase the incidence of insurance coverage enough to avoid "triggering" a public option. The President's address, and the Congressional leadership's response to it, makes that outcome more likely;

2) While it makes political sense, the idea of exempting 95% of the small companies in America from compliance with either a mandate to provide coverage to their employees or from tax penalties for not doing so doesn't just severely weaken the credibility of the overall health care reform strategy, it also signals some other significant potential problems down the road. Companies with fewer than ten employees have the hardest time purchasing group coverage to begin with, and when they can get it, pay nearly 20% more for it than large companies do. A "hands off" approach to the problems facing this segment of the marketplace could suggest that, while small businesses may be spared some of the expense entailed in the reform plan, they may not benefit much, either. And absent some very significant changes in the pricing and underwriting rules governing both the individual and small group markets, some of the President's suggested insurance reforms could make coverage more expensive for companies that are currently struggling to provide coverage to their workers (and to their owners' families as well) and put the cost of coverage further beyond the reach of those that don't.

3)Until there's a real bill, with real numbers, exercising too much concern about what might or might not be in it is a waste of time. The process is essentially starting over. I think it's going to be a matter of months, at least, before there's action on anything resembling a final bill. The first provisions of the bill, when it's enacted will not take effect till 2013, and will be phased in over probably a five-year period. So even under the best circumstances, a fully-realized program is nearly ten years away from fruition, and there are TONS of details between here and there.