Three Scenarios for Health Law Decision

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Published June 28, 2012

| FoxNews.com

A universal health-insurance entitlement has been a dream for Democrats for four generations and has been an utter preoccupation for the party for the past 20 years.

That’s why when Democrats regained absolute control of Washington in January of 2009 in a way they had not since the days of Jimmy Carter, the blue team plunged ahead with the issue despite considerable public anxiety.

Imagine if Republicans were somehow handed this fall a sweeping victory with supermajorities in both houses of Congress and control of the White House. What dreams of tax and entitlement overhauls would be dancing in the heads of conservative lawmakers even before Jan. 20, 2013?

Well, President Obama, having won his party’s nomination in part by hectoring then-Sen. Hillary Clinton for an insufficiently liberal universal health-insurance program, immediately lifted up the mantle of that Democratic dream. He moved almost immediately to the subject, even as moderate voters wished the restored Democratic majority would focus on jobs and the economy.

But with the liberal wing of the party back on top, there would be no waiting.

Obama, though, had waded into political quicksand. The Democratic members of Congress didn’t yet reflect the full leftward lean of the party and there were then still a great number of Clinton Democrats in Washington. Most of those moderates have now been washed out by voters, but back then, it was still a considerable bloc.

These Clinton Democrats made Obama pay dearly for his law, and in the end he had to accept the central point of his 2008 rival’s plan: mandatory insurance.

Regulatory-friendly Republicans had conjured this idea in response to the health law imagined by Clinton in 1993 when her husband, Bill, then the president, tapped her to lead a previous health care overhaul. Her plan, a government-run insurance entitlement, was a bust in Congress and with voters.

(The irony for the current president is that his legislative success in what the Clintons could not achieve has proved his greatest political vulnerability. The Clintons’ defeat on their health law, however, freed them to move to the middle and re-election.)

In 2008, Hillary Clinton, made a, well, Clintonian play and embraced her opponents’ idea, arguing that the way forward on health care was to force all individuals and employers to buy health insurance. Republican Gov. Mitt Romney had just enacted such a plan in Massachusetts, and many moderate Republicans had been enthusing about the idea. While eventual 2008 Republican nominee John McCain favored a system of insurance subsidies for the poor and tax vouchers for the rest, more moderate Republicans were very big on the idea of the government mandating “personal responsibility” through the purchase of insurance.

Big insurance liked the plan since it kept them as the central purveyor rather than a government agency and also avoided the kind of unprofitable deregulation of the insurance cartel system that conservative Republicans had been talking about.

But Hillary Clinton couldn’t sell the plan to the Democratic base, already crabby about her vote to authorize the Iraq war and her husband’s more moderate positions. It was a considerable factor in Obama’s improbable upending of her candidacy.

However, in late 2009 and early 2010, Obama found his own plan mired in Democratic infighting and stalled in Congress after nearly a full year of his pushing the law.

Rather than accept defeat, Obama took the deal with the Clinton wing of his party and pushed the very kind of compulsory insurance that he had once mocked. After Republican Scott Brown won the Massachusetts Senate seat formerly held by Ted Kennedy, ending the blue supermajority in the Senate, Obama decided to plunge ahead with whatever would pass, by whatever procedural means possible.

Liberals accepted the bargain on the grounds that it was a gateway for the original Obama plan for a taxpayer-funded, government-run insurance entitlement program, whether it be a European-style single-payer system or the system Obama abandoned, one in which the government would be a competitor with private insurance. The best things about the law, they argued, was that it exploded the status quo and established health insurance as a basic, permanent right for Americans.

It was, however, a thoroughgoing disaster with voters and led to a historical midterm defeat for Democrats. While we often discuss whether the electorate will look more like 2008 or 2010, please remember that 2010 was a tsunami while 2008 was merely a wave, and one triggered by the Panic of 2008, which occurred just before that year’s election

Now, 828 days after the president signed the bill into law, we come to this morning, and the Supreme Court’s judgment on the constitutionality of the law -- a fulcrum point for the 2012 election and a signal moment for the aspirations of generations of liberals.

The fate of Obama’s health law matters a great deal to the sliver of voters who are somehow torn between the most liberal president since Lyndon Johnson and arguably the most conservative Republican presidential nominee since Ronald Reagan.

But more practically, the decision will forever change the understanding of the role of the federal government in the lives of American citizens and the way in which nearly 20 percent of the American economy functions. The stakes could hardly be higher.

There are three potential scenarios for the decision. Here’s a look at how they could play out:

Upheld in Full

Obama has been looking snake bit of late, and having the court invalidate the entirety of his health law or even just its central provision would certainly reinforce the Republican argument that Obama just wasn’t cut out for the big job.

An affirmation of his law would cast off some of that burden. Winning, as they say, is better than losing.

But as soon as the court would bless the law, a trainload of consequences would crash into the electorate.

Consider this: in a self-selected survey of 2,694 physicians conducted by health care staffing firm Jackson Health Care, 67 percent of doctors said that the law would have a negative effect on private practitioners and 53 percent said that the law would have a negative effect on their own practices.

One of the big concerns about the law – a scarcity of health care providers – could set in immediately. Doctors do not like the law. Some would retire, some would begin refusing government-backed insurance and others would stop accepting new patients altogether.

State governments and employers, meanwhile, would be in a scramble to prepare for full implementation of the law. This means big budget concerns for already strapped states as they try to fund huge new obligations under Medicaid (unable to fully fund the law, Congress pushed much of the burden onto states). Employers would be looking at whether the time had come to stop offering health benefits to workers given the cost of new requirements under the president’s law.

This would mean the president, who has been selling the icing on the cake, would have to start defending the cake itself. He had planned to entice voters with goodies before the taxes and disruptions began. The end of the stasis brought about by the court challenge would mean a far swifter implementation than Democrats imagined.

The latest FOX News poll finds the law in disrepute with voters and only 39 percent – the exact number as when the law was signed 828 days ago – favor the plan. If the ground starts shifting on health care, that number will drop.

Struck Down in Full

Americans believe that their health care is too expensive and hate the idea of having more than 10 million of their fellow citizens uninsured. If the court upends the most significant effort to address those concerns ever undertaken, there will be considerable frustration.

If the court strikes down the law, the Obama Democrats will certainly stoke that frustration and make a target of the court itself.

Full repeal by the court, though, would certainly be a massive symbolic defeat for a president who touts his time teaching constitutional law at the University of Chicago. It would also invalidate the largest accomplishment of his presidency, reinforcing the notion among voters that he led the nation into a thicket on health insurance regulations and subsidies rather than focusing on the economy.

But it would also be the best scenario for the embattled Obama. The court would be giving him a do-over with his fellow Democrats and a pass with anxious voters. The law, so disliked and so feared, would simply disappear.

Obama built the final version of the law in haste and amid much infighting within his own party. If the law is obviated, Obama can shake his fist at the court, inspiring his base, and then start making puffy promises about the ideal law he would enact once ensconced in a second term.

Romney, meantime, would lose of the great unifiers of his party and best arguments against Obama with persuadable voters.

Mandate Struck Down

This is the scenario that really puts rocks in their jaws over at the White House.

Obama didn’t want the mandate to begin with and only accepted it rather than lose face and retreat on his call for a new health insurance entitlement. If the court does puncture the law, expect to hear a lot about how its inclusion was the fault of Romney, the Clinton Democrats and others. There would also be plenty of fist shaking at the court.

But after the spinning was done, which would take awhile, the unavoidable fact would be that the justices had blown a $1 trillion hole in what was already a very expensive plan. Without the people who do not want to buy insurance being forced to do so, insurance companies can’t profit while insuring the customers they are forced to cover under the Obama law.

Premiums would spike, more companies would dump their health plans, shrinking the pool of desirable customers further. That would drive up prices more, causing more companies to jump ship. Lather, rinse, repeat.

Facing this scenario, lawmakers would be obliged to offer a solution. Liberals would push for the restoration of the original government-run plan financed by tax increases on which the president campaigned. Conservatives would push for full repeal.

And those in the middle? Probably not much. The “patient protection” parts of the law are popular but the legislation as a whole is not. There would be gangs of moderate senators mumbling about a bipartisan plan and the Washington Post editorial page would call for a sensible solution. Meanwhile, the nation would keep drifting toward the iceberg.

Obama and Romney would themselves be obliged to offer their own solutions. That’s an easy one for the Republican: rip that sucker out and replace it with something more modest. Expect word clouds containing “state level” “common sense” and “small business.”

For Obama, it would be very tricky. He has been nuzzling his liberal base ever since the rambling wreck of a finish on his signature law more than two years ago. Would he deny them again and embrace anything other than a government-run option financed through higher taxes?

But would he really go tell the folks in Ohio that he wanted to go bigger, not smaller in the face of the setback?

 

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET  at  http:live.foxnews.com.

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