It seems to me that three things have converged to form the perfect storm for the Obama White House and the Affordable Care Act.
Thing one: insurance companies want to sell high-deductible, low-cost insurance plans. These plans are highly profitable. As former-insurance-industry-executive-turned-whistle-blower Wendell Potter explains: they typically have low monthly fees but very high deductibles, strict usage caps and the requirement that they be renewed annually — fail safes designed to limit their actual use. They’re sold in the individual market, and the “small group” market, in which small businesses, restaurants, and other smaller entities shop. The industry never really wanted to give up these plans. And now that the ACA has rendered them illegal, the industry, backed by conservatives and the media, have found a way to keep them alive.
With Senate Democrats up for re-election pressuring the White House, and a House bill by Michigan congressman Fred Upton lurking in John Boehner’s chamber (which Boehner has described as one of several “targeted strikes” intended to bring down the entire law, by allowing insurance companies to sell these substandard policies to new customers, rather than just renewing them for people who have them now) the White House announced Thursday that it will relent on renewal of the plans for one year.
Score one for the insurance industry. Without even trying very hard, they’ve scored a public relations coup, since according to the news coverage, the fate of not just healthcare reform, but Obama’s presidency itself (!) now hinges on people’s ability to buy or hang onto these shaky single-issue plans.
Thing two: Americans don’t particularly like change, particularly big change. The challenge for the crafters of the Affordable Care Act was to make a very dramatic change to the insurance market: bringing in some 40 million people who don’t have any insurance at all, while keeping the bones of the current system, which any expert will tell you are severely broken, barely usable bones, in place. The goal was that most Americans wouldn’t feel like their lives were being disrupted in order to “give something” to the poor.
That meant the bill couldn’t really jar the marketplace much, and so most of the “jarring” was packed into two places: the tiny individual and group insurance market (less than 5 percent of the total) and the much, much larger Medicaid system, where in order to make it easier states to accept it, the federal government is picking up 100 percent of the expansion tab for the first three years. Only half of states have taken the Obama administration up on it.
Thing three: the news cycle, and something you might call “affluence bias.” We in the news media are hungry for constant and easily explained conflict. It’s what drives the 24-hour news cycle. And the lowest-hanging fruit in the rollout of healthcare reform was the website, healthcare.gov. And, in part because of expectations of technical savvy from a president who ran a tech-centric presidential campaign in 2008, and the expectations of tech usability that are built into the affluent world of go-go, big-city media, the site’s failure to perform doomed the ACA to a series of horrid news cycles, particularly given how savvy Republicans are at exploiting such things. (Democrats don’t even play on the same field.) Every time a reporter tried to log on and couldn’t, another nail was hammered into the coverage coffin.
A related truth of our media landscape is that the individual market, small though it is, is also low-hanging fruit. It contains individual stories with a dramatic backdrop: a letter from the insurance company saying “your policy has been canceled.”
It almost doesn’t matter that insurance companies were sending such letters (and ones saying “your policy just doubled in price”) long before “Obamacare.” Or that the insurance industry has been very savvy about proactively canceling policies, with ‘Affordable Care Act’ draped over every line, rather than being clear about why those policies were non-compliant with the new law.
The president’s political one liner, “if you like your plan, you can keep it,” which was aimed at the vaunted middle class, who must sign off on any substantial policy change in order for it to be validated in the public consciousness, was a media trap waiting to happen, especially once people who “like their plans,” mostly because they’ve never had to use them, started calling, or being called by, reporters.
The big irony of course, is that the 40 million Americans who have no insurance, and who were the real targets of reform, along with the 8 million or so who will be locked out of coverage because their states are refusing the Medicaid expansion, are going largely uncovered in the debate, as the media swarms around the relatively affluent individual market buyers, and those shopping on the exchanges.
Meanwhile, the fact that so many of the 40 million will get insurance by qualifying for expanded Medicaid is read as a failure of the law rather than a feature, since those people fail the middle-class narrative test. The working poor are not a desirable class. They’re not a sexy story. And they’re less relatable to the average reporter than the small business owner waving a letter from Blue Cross, Blue Shield with “canceled” stamped in red ink across the top.
And in the swirling media climate, where every new hitch and glitch in governance is “Obama’s Katrina,” (an idea that’s patently and incredibly offensive, given that more than 1,800 people died as a result of both the 2005 storm and state and federal negligence, not to mention the mass forced migration of tens of thousands of New Orleaneans…) even challenging the notion that the rocky ACA rollout has essentially doomed the president, is written off as Obamaphilic myopia.
This is the climate in which the Affordable Care Act is being implemented. The White House probably should have anticipated it, and the president certainly wasn’t served well by the team charged with putting the healthcare website in place. But never underestimate the power of the insurance lobby to shape a debate in their favor, including through the elected officials beholden to them. They’re doing a bang-up job of it so far.
Follow Joy Reid on Twitter at @TheReidReport.