Obama's healthcare plans run into the sand

If the Obama administration thought that controlling both houses of Congress, backed by a popular mandate for change on the back of last year’s elections, would get them what they wanted, then the stiff resistance to modest healthcare reforms is a revealing story of where power in America really resides.

The powerful insurance industry makes huge profits from healthcare, along with the drug companies, and they are not about to see this power eroded any time soon. Together with the Republican Party, the industry is determined to sink Obama’s plans – or water them down so much that they make little difference. In fact, the right wing is planning to wreck the Obama presidency altogether, predicting that healthcare plans will be his Waterloo.

Democrats in Congress have also taken fright, refusing to pass legislation before the summer recess despite pleas from the White House. Some are even comparing Obama’s dilemma to that of the Clinton administration, which eventually caved in to vested interests and abandoned healthcare reform.

Most Americans under 65 get healthcare through insurance policies connected to their jobs. But 46 million who have poorly-paid jobs or work for smaller firms don’t have any cover at all while those with insurance often find it is inadequate and have to find money from their own pockets. About 22,000 Americans die each year because they lack health insurance.

Obama’s plan is to build on what exists by expanding eligibility for government insurance schemes for low-income workers, creating a new scheme for the insured and requiring employers to provide coverage or pay a tax to the government. The programme would not take effect until 2013 while millions would still remain outside the schemes, notably immigrants without papers. The overall estimated cost to the state of the Obama plan is a massive $1 trillion.

The idea of just allowing consumers to choose between a government plan (people would still have to pay) and private health insurance is sufficient to draw the fire of big business. The Chamber of Commerce has announced a major campaign of rallies and advertising to crush the White House plan for a competitive public option.

Advocates of radical change are increasingly dismayed. Bill Moyes, a senior writer for Public Broadcasting Service, says: “Meanwhile, supporters who want to scrap the present system for fundamental change are staring glumly though the fog of war at a battlefield in total disarray. They fear that in the White House's desire to get a bill – any bill – passed by Congress, it will have been so compromised, so bent to favour the big interests, that it will be less Waterloo than watered down, a steady diluting of the change they had hoped for and that America needs.”

The pharmaceuticals are celebrating lobbying successes, including no cost-cutting steps, no cheaper drugs to be allowed across the border from Canada, and protection against competition from generic drugs for 12 years after they go on the market. These concessions were achieved through right-wing Democrats on Senate committees.

Early in his presidency, Obama admitted that he hadn’t realised how little real power the White House exercised. He was then talking about the financial and economic crisis, when interests inside and outside Congress watered down his stimulus package. Obama has tried to mobilise public opinion in favour of healthcare changes but that may not be sufficient to turn the tide.

America’s state structures, and its major political parties, are inextricably connected to big business. And the Obama presidency is not going to challenge these anytime soon, even though the most reactionary forces in America are determined to wreck his administration within its first year in office. A veritable political crisis is brewing in Washington.

Paul Feldman
Communications editor