In his State of the Union address Tuesday, President Obama will try to turn the page on the Obamacare controversies of 2013 and shift the focus to such topics as income inequality.
Good luck with that.
As Obama prepares to stand before the nation, majorities say they disapprove of his handling of their top two priorities — the economy and health care — and 63 percent of Americans say they do not have confidence in his ability to make the right decisions for the country. His approval ratings are nearly identical to those of President George W. Bush at the same point in his presidency.
That is a problem, but it is not his biggest problem.
Obama’s biggest problem is that his lie of the year in 2013 — “if you like your health plan, you can keep your health plan” — hangs over his speech and will continue to haunt him in 2014.
Thanks to that false promise, half the country now says Obama is not “honest and trustworthy.” When people stop trusting you, they stop listening to you as well.
Worse still, his lie will be front-and-center in voters’ minds in 2014, because a second wave of health-plan cancellations has begun. Last week, Target announced that it has “decided to discontinue part-time health insurance coverage for our stores’ part-time team members beginning April 1, 2014.” Why? Because Obamacare “provides new options for health care coverage that we believe our part-time team members may prefer.” Translation: Why pay for health coverage when Target can dump its employees into the government-subsidized Obamacare plans, which cost it nothing? Target is not alone. Trader Joe’s and Home Depot have announced that they are canceling plans and scaling back health benefits. How do you think the state of the union feels to those workers?
These employer cancellations will expose a second Obama lie. Back when millions of Americans were losing their individual-market plans last October, Obama declared, “Keep in mind that the individual market accounts for 5 percent of the population. So when I said you can keep your health care, I’m looking at folks who’ve got employer-based health care.” But now its “folks who’ve got employer-based health care” who are losing their coverage as well. It’s not just big employers. Small businesses, who buy in the small-group market, are set to start canceling plans this year as well, with the bulk of the cancellations coming in October — right before the midterm elections.
So what can Obama do? One option is to announce he will unilaterally delay the employer mandate for another year and extend the grandfathering loophole for small businesses for another year as well. That might allow the president to push some of those cancellations off beyond Election Day. The problem is, delaying the employer mandate and extending the small-business loophole may temporarily fix his political problem, but it makes his policy problem worse.
Obama needs all those people to lose their employer-based plans and move into the exchanges to make Obamacare financially viable. Right now, most of those joining Obamacare are low-income folks, people over 55 and people who were previously in high risk pools. Obama desperately needs younger, healthier people to subsidize the old, poor and sick. If he does not get them, Obamacare will implode.
Already, Aetna announced that because younger, healthier people are not joining Obamacare, it will either have to charge massive premiums increases or pull out of Obamacare altogether. If Aetna does so, and other insurers follow suit, Obamacare could slip into a death spiral.
So the president is in a bind: He needs that wave of cancellations to force younger, healthier people into the Obamacare exchanges — and keep insurers from fleeing. But those cancellations could cost him the midterm elections — and control of the U.S. Senate.
In other words, it is going to be very hard for Obama to change the subject to income inequality. Even if he succeeds for a time, the Obamacare disaster will haunt those efforts as well. Today, a record 72 percent of Americans say big government is the biggest threat to our country — the highest that number has been in 50 years of polling. Concern with big government is so bad, even a majority of Democrats — 56 percent — consider it the biggest threat the nation faces.
So not only do Americans not trust Obama, they also have never been more skeptical of bi -government solutions to our nation’s problems. So the president can talk all he wants about income inequality, but it’s unlikely anyone will trust him with a solution.
That is Obama’s dilemma as he delivers his State of the Union address tomorrow night. White House officials say the president wants to use his State of the Union address “to put a difficult year behind him.”
The problem is, the year ahead may be worse.