Health care reform: How big is Obama's concession?

On Monday, President Obama offered to let states design their own health systems, as long as they meet the overall goals of the national health care reform plan.

President Obama on Monday offered to let states opt out of his big health-care reform overhaul and design their own health systems, as long as they meet the overall goals of the national plan.

That sounds like a big deal. Is the White House making a concession here? After all, about half the states already have sued to overturn the system critics call “Obamacare.” Many of them may try to replace Washington’s approach with health-care reforms designed closer to home.

The short answer is “yes”: Mr. Obama indeed may be ceding some ground to critics. However, the longer answer is “yes, but ..." What Obama called for Monday is not so much a change in the existing law as an acceleration of something that was going to happen already.

Last year’s health-care reform law already allows states to propose their own frameworks for care, beginning in 2017. Obama, in a speech to the National Governors Association, said that he would support changing the law to allow that to happen three years earlier, in 2014.

There’s already a bipartisan bill in the Senate that would make this change, and Obama said he believes it should pass.

“I think that’s a reasonable proposal. I support it,” said Obama. “It will give you flexibility more quickly, while still guaranteeing the American people reform.”

The White House has long said the president is open to changes that can make the law better, and it may be betting that with this step, Obama will appear to be taking a step toward his opponents’ position.

Indeed, the little-noticed opt-out provision could allow states to get away from the provision that many insist is unconstitutional: the health-care law’s insistence that all Americans obtain health-insurance coverage.

For instance, a state could decide that it would rather link tax credits for small businesses with tax credits for lower-income individuals in an attempt to cover as many people as would the health reforms designed by Washington. Or it could choose automatic enrollment in health insurance, according to a Monday post on the White House Blog by Kathleen Sebelius, secretary of Health and Human Services.

“State reforms could take many forms,” writes Secretary Sebelius.

The catch is that these reforms would have to provide coverage at least as comprehensive as the policies that will be offered through the exchange insurance marketplaces set up by Obama’s health law. They could not cover fewer people than the federal approach. Nor can a state's plans add to the federal deficit, according to Sebelius.

One unintended consequence of Obama’s move on Monday may be to further confuse a US public already thoroughly flummoxed by the state of America’s health-care reform debate.

According to a recent Kaiser Family Foundation poll, 22 percent of US voters believe Obama’s health-care law has already been repealed by newly empowered Republican lawmakers. (It hasn’t: The House voted to repeal it, but the Senate did not. Obama would veto that anyway.) Another 26 percent aren’t sure whether the law has been repealed.

A slim majority of respondents – 52 percent – said correctly that the federal health reforms remain the law of the land.