Obama’s Health Care Learning Curve

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The Washington Post is running excerpts from Dan Balz and Haynes Johnson’s new book about the 2008 campaign–must-read for political junkies, because the two veteran Washington Post reporters give us a lot of insights from the key players themselves. They also have access to important emails and documents, like Obama political strategist David Axelrod’s Nov. 28, 2006, memo to the would-be candidate, which turned out to be remarkably prescient about the race ahead.

Dan sent me an early copy of the book, because he thought I would be particularly interested in the Obama team’s take on an episode where I had a better-than-front-row seat. When you see and hear the President talk about health care these days, you cannot help but be struck by his fluency with the issue. But that was not always the case. As I have watched Obama take on the health care issue, and stake so much of his presidency on it, I have often thought back to a day in 2007, which Balz and Johnson describe as a “near disaster” for Obama.:

The gap between Clinton and Obama became clear in late March when the Service Employees International Union hosted [KT note: other sponsors were the Center for American Progress Action Fund and the University of Nevada Las Vegas] a candidate forum on health care in Las Vegas. Obama’s appearance was a near disaster. No union in the country, with the possible exception of the California Nurses Association, had put more emphasis on health care then SEIU. But Obama was utterly unprepared while his rivals arrived fully primed.

First to speak was John Edwards. Two days earlier he and his wife Elizabeth had announced that tests showed a recurrence of her breast cancer, only now it had spread to her bones. Her condition was described as untreatable. Amid a wellspring of public sympathy for their ordeal, and expressions of admiration for Elizabeth’s courage and the portrait of the loving, supportive couple they drew before the public, they vowed his campaign would continue.

On that morning in Las Vegas, John and Elizabeth were together for their first public appearance since their press conference announcing the return of her inoperable cancer. As he addressed the union audience he was crisp, forceful, and totally engaged. “What we have here is a dysfunctional health system in America,” he said. “what we need is big, bold, dramatic change.” Edwards deftly fielded questions about his wife’s health and their commitment for him to stay in the race. He was also straightforward about the cost of his health care plan and how he would pay for it.

Obama came next. He made no mention of Elizabeth Edwards and her courageous battle and had no plan to present, saying, “Everybody on this stage will have a plan.” The moderator, Time magazine’s Karen Tumulty, had pressed his campaign ahead of time for information about his health care agenda but got nothing in return. She handed off the questioning to a member of the audience, Morgan Miller, who would later become known as the “Obaminator” to her friends because of her pointed questioning of the candidate. She expressed dismay at how little information was available on his campaign Web site. “What really are your top issues?” she asked. Obama was hesitant and defensive. “Keep in mind, our campaign right now is a little over eight weeks old,” he said. When asked about how he would pay for expanded access to health care, he fudged. “I have not foreclosed the possibility that we might need additional revenue in order to achieve my goal,” he said. “But we should underestimate the amoutn of money that can be saved in the existing system.” He received only polite applause.

Clinton took the stage next, and Obama could see the contrast between them. After praising Elizabeth and John Edwards, she said, “We’re supposed to limit this to three minutes. As some of you know, I can talk three hours or three days on health care.” Though Clinton did not have a plan at that point either, it was quickly apparent how expert she was. Health care was her passion, and it showed. It is a disgrace, she thundered, to have millions of Americans left out of the health care system. “We need a movement. We need to make this the number one voting issue in the ’08 elections,” she said as her words were drowned out by rising applause. “We’re going to get it done this time.” She was even more impressive during the questions. When she finished, someone in the audience yelled, out, “You go, girl!”

Obama knew he had lost the day. Now he understood better what [Campaign Manager David] Plouffe had told him in December about the pressures of a presidential campaign. “Her presentation was sharp and she knew how to arouse the crowd. … He was impressed by it,” Axelrod said. “Basically he had leaped into the deep end of a very cold pool and I think it was a shock to the system. It took him a while to figure out how to swim. … As bright and as gifted as he is, this was all new to him. He went through a period that was very difficult. He was tired. But he felt challenged as well. Little by little he began to learn the rhythm and the pace and the requirements.”

When we talked to him about that Las Vegas forum more than a year later, Obama vividly recalled it. “We had made a strategic decision that we weren’t going to put our health care plan out yet,” he said. “I thought to myself, this is conversational. I’m going to have a conversation with Karen [Tumulty] about how I see health care. And Hillary came in and made a full-blown stump speech presentation. She was standing up, she was playing to the crowd.”

A few days after the SEIU forum, Obama spoke before a convention of the Building and Construction Trades in Washington. He opened with a dismissal of the group’s significance. “I’ve got to vote at noon so I’m going to have to cut this short,” he said. He was as good as his word, speaking briefly and then departing. On his way back to the Capitol, Obama confided to a colleague that he had not done well before the union audience. He was, he admitted, exhausted after only two and a half months as a candidate. He asked Gibbs to follow him over to the Capitol for the vote. Gibbs was struck by Obama’s demeanor. He looked miserable. “You could tell he was wiped out form the whole thing,” Gibbs said.

And yet, only weeks later–right around Memorial Day weekend–Obama presented a health care plan. It was a credible one, though it differed from Clinton and Edward on a key element: It did not require individuals who are not covered by their employers to go out and buy coverage on their own. As a result, his rivals criticized it as not achieving true universal coverage.

But that, as we have since learned, was really only the beginning of Obama’s evolution on the issue. He now embraces that “individual mandate.” I asked him about his change of heart last week. Here’s what he had to say:

I feel pretty good that I’ve been pretty consistent on this. The individual mandate is probably the one area where I basically changed my mind. The more deeply I got into the issue, the more I felt that the dangers of adverse selection justified us creating a system that shares responsibility, as long as we were actually making health insurance affordable and there was a hardship waiver for those who, even with generous subsidies, couldn’t afford it. And that remains my position.

I think other than that we’ve been pretty consistent about how I think we need to approach the problem. And by the way, I in no way want to suggest that cost is more important than coverage. My point has been that those two things go hand in hand. If we can’t control costs, then we simply can’t afford to expand coverage the way we need to. In turn, if we can expand coverage, that actually gives us some leverage with insurers or pharmaceutical industry or others to do more to help make the health care system more cost-effective.

That’s your carrot.

What about — you mentioned that subsidies have to be there. What’s — you’re hearing now — 300% [that the government would provide assistance to people earning up to 300% of poverty]. Is that enough? Is that really —
Until I actually see the numbers, I don’t want to give a definitive answer on that. I do think that if we can figure out what is a fair, appropriate percentage of your income that you’re paying on health care, and peg it — peg subsidies so that it’s meeting that test, potentially with some regional variation then we’ll get it right. And I think that the committees are working on that. That’s the kind of detail that we had anticipated working through in conference. If it turns out that Congress just can’t get there and that’s the holdup, then we’ll give a very definitive idea of where we need to go on it.

All of this brings me back to a criticism we are hearing more frequently of the Obama strategy on health reform. While he has laid out broad principles, more and more in Congress are asking him for more specific guidance to get them past the roadblocks. In health care, details matter; to get anything done, you have to be ready to engage them. But timing matters, too, and an early stumble or two isn’t fatal. Maybe that’s why the White House doesn’t seem to be as rattled as everyone else at the fact that there are rough spots along the way.