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Five things to watch in the State of the Union

How health care will, and won't, be a factor tonight

Topics: Health Policy, Market Trends, Strategy

January 24, 2012

Dan DiamondDan Diamond, Managing Editor

And the state of our health reform is…

Good? Strong? Awaiting Supreme Court review?

Don't expect President Obama to render a verdict tonight.

With the president slated to deliver his fourth—and possibly final—State of the Union at 9 p.m. ET, all signs point to a speech that skimps on health care and focuses on the broader economy.

Even if Obama barely celebrates his Affordable Care Act, health reform will have a place in tonight's remarks. But you may need to look harder to find it than in years past.

Here's what to watch.

1. How many words go toward health care 
Obama has seemed leery of saying five things about health care—let alone five words about his ACA—in recent months.

But no president since Ronald Reagan has completely ignored health reform in a State of the Union address. (President George H.W. Bush came closest; his plan warranted just 47 curt words amid a Gulf War-focused 1991 address.)

And health reform had been a major theme in Obama's first two addresses. The president spent more than 1,000 words to first outline his vision (2009) and then pled with Congress to keep the ACA alive (2010).

But the law's persistent unpopularity forced a retreat last year, setting up this striking contrast:

  • Obama used only 224 words—about 3% of his speech—to tersely tout his own signature policy achievement.
  • Rep. Paul Ryan devoted more than 12% of the Republican rebuttal to condemn the ACA and promise a GOP-led repeal effort.

Expect a reprise tonight. Obama's failed attempts to win over the ACA's critics have reportedly left the president frustrated and his advisors convinced he has little to gain by revisiting the issue; facing re-election, he's likely to move quickly to less sensitive topics.

2. Which path Obama chooses: Defense, offense, or diplomacy
However he deals with health reform, The Hill notes that Obama will choose from three potential frameworks.

  • Defend his health care law: This would speak to the president's core supporters, some of whom are frustrated that Obama hasn't kept trumpeting his most transformative reform.
  • Criticize Republicans' Medicare privatization plans: This is House Democrats' preferred approach, and a potentially popular strategy ahead of November's elections. But The Hill reports that the tactic may leave Democrats exposed to similar criticism, given the party's own proposals to trim health spending.
  • Reiterate his willingness to make changes: This would be Obama's latest effort to cast himself as a bipartisan leader; the president last year said he was "eager" to improve the ACA and the Washington Post credits his follow-through in striking down the law's controversial 1099 provision.

After years of trying to seek consensus, pre-speech rumblings suggest that Obama's latest State of the Union will be more aggressive and combative than in years past.

3. Why Obama thinks the ACA has been a success
Obama's recent campaign appearances reveal several new talking points about health reform, which will likely come up in his speech.

The president has stressed how 2.5 million young Americans have gained health coverage through the ACA, thanks to provisions that allow adult children to stay on their parent's plan. He's further celebrated the law's discounts for seniors' prescription drugs and protections for patients with pre-existing conditions.

Obama also has been testing a new slogan: Change is.

"Change is the health care reform that we passed after a century of trying," Obama told supporters in Washington, D.C., this month. "Millions of Americans who can no longer be denied or dropped by their insurance companies when they need it most…That's what change is."

Those lines may play better at a private campaign event than in front of a divided Congress. We may find out tonight.

4. Where the jobs are (or aren't)
When it comes to job creation, no sector is healthier than health care. The industry has produced 800,000-plus jobs since Obama took office. In contrast, the rest of the economy has lost more than 2.4 million.

But while the president is expected to focus on his employment strategy, don't expect a spotlight on the booming health care market.

Pointing up the industry would leave Obama in a tricky position. While the president's chief argument to pass the ACA during a recession was its job-creating potential, he'll want to avoid suggestions that the law merely boosted health care organizations at the expense of other employers.

Still, keep your ears perked for how Obama discusses economic plans like "insourcing"—his idea to bring jobs back to the United States—and the need for American innovation. Both have implications for health care, though in very different ways.

First, growing the health care industry does track with keeping jobs home. Actual health care delivery is essentially local; as former White House economist Jared Bernstein recently told me, you can outsource a manufacturing job to China but can't outsource a nurse. Second, the nation's health IT sector continues to grow, and lawmakers in both parties often invoke necessary initiatives like electronic health records; Obama has touted at least one firm—GalaxE Solutions—in speeches this month.

5. When Obama addresses his rivals—if he does so at all
Presidents don't often cede the stage at the State of the Union, but it's not unprecedented.

Bill Clinton's 1996 address featured several references to Bob Dole—then the Senate Majority Leader and Clinton's Republican opponent later that year.

More common was George W. Bush's approach in 2004: No mention of his rivals and a speech that focused on sweeping, presidential goals while future Democratic nominees John Kerry and John Edwards attacked each other on the primary trail.

Obama has mostly stayed above the current fray in the Republican field. But there's actually an opening for the president to obliquely zing his top challengers.

The White House has delighted in reminding Republican voters that Obama's health reforms were expressly modeled on Mitt Romney's own overhaul in Massachusetts—a sore subject for the Romney campaign.

And despite GOP presidential candidate Newt Gingrich's attacks on the insurance mandate in "ObamaCare" and "RomneyCare," reports continue to surface that Gingrich used to support the provision too. (The two prominent Republicans have company; the conservative Heritage Foundation also backed the mandate.)

But it's about as likely that Obama will explicitly mention Romney or Gingrich as he'll make a joke—like one journalist suggested—that the health reform law is actually "NewtObamaRomneyHeritageCare."

Although that would be something to watch.

For live analysis of the State of the Union tonight, follow Dan on Twitter at http://twitter.com/ddiamond.

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