According to The Advisory Board's Dan Diamond, President Obama spent just 322 words on health care in his State of the Union last night, down from more than 600 last year—perhaps not surprising given the recent spike in the law's unpopularity. His message: He is open to changing the law, but not to gutting rules that require health insurers to cover those with preexisting conditions:
I have heard rumors that a few of you still have concerns about our new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.
The unnecessary bookkeeping burden Obama refers to is a provision that requires small businesses to file tax forms with any other business with which they conduct more than $600 in transactions. Getting rid of the provision is a good idea, although doing so will require legislators to come to some sort of agreement about if and how to pay for the estimated $17 billion in revenue that the provision was supposed to generate.
National Journal characterizes his approach to modifying the law as favoring a scalpel rather than a machete. But you can do a lot of damage with a few small cuts, especially in a law as complex as the Patient Protection and Affordable Care Act. In the coming months and years, there will be an array of interest groups and constituents lined up against specific provisions, all making the case that some specific provision must be changed. Already there are industry efforts under way to change or get rid of the Independent Medicare Advisory Board, the device tax, and a variety of other rules and requirements buried within the law. Obama, it seems, is signaling that, outside of the key insurance provisions, he may be willing to negotiate.
Think about this in the context of what remains one of the stronger criticisms of the law: the Congressional Budget Office projected the law would likely reduce the deficit only it was executed exactly as written, which wasn't likely. If certain changes were made to the law by future Congresses—as CBO noted had happened with health laws designed to produce cost savings before—then those deficit savings would not materialize.
And now we have President Obama, not one year out from the law's passage, suggesting that he is willing to change one provision that was scored to bring in revenue, and is opening to ideas about changing other provision. We already know that his administration is willing to bend under pressure from businesses and unions: The 222 health law waivers handed out prove this. Even if you believe that those waivers are merely pragmatic concessions to doing what works, it is still suggestive of how the administration reacts to pressure to alter the law.
We also already know that Obama isn't willing to directly implement controversial cost-saving provisions if powerful interest groups object: The so-called "Cadillac tax"—an excise tax on expensive health insurance plans—is, according to the projections, going to be responsible for a great deal of the law's estimated savings. By taxing expensive plans, it will encourage many individuals to purchase less expensive insurance and thereby be more prudent with their use of care. But after union-led objections to the tax, the Cadillac tax provision was delayed until 2018—two years after Obama would finish a second term.
I don't mean to say that modifying the law would be a bad thing, or that the Obama administration should not be making exceptions to unduly burdensome regulations. On the contrary, like much of the country, I think the law is deeply flawed. If repeal is not possible, it should be changed. But the promise of deficit reduction was built on notion that the law would not be altered—an idea that has never been believable.
In its September and October 2009 scores of the PPACA, the CBO included some variation on the line that "these projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation." That caveat was inserted into the scoring for a reason. Major legislation is rarely left unchanged. And as Obama reminded us last night, it's highly unlikely that this particular major legislation will prove an exception.