Despite all the silly talk of socialism in the presidentialcampaign, President-elect Barack Obama will not move to nationalizethe health insurance industry after he is sworn into office.However, the question remains whether he can create another massivefederal program during a financial crisis–and if he does, how he'llpay for it.

Obama will at some point–probably sooner rather than later–launchthe most serious effort to reform the way health care is insured inthis country since First Lady Hillary Clintons ill-fated driveunder her husbands administration.

The Clinton initiative was undermined not only by poormanagement within the White House Task Force created to reshapehealth care, but by a devastating industry-funded ad blitzfeaturing the fictional Harry and Louise, expressing alarm over howthe government was going to tell them which doctors they could andcouldnt see.

The mood towards healthcare reform is quite different thesedaysnot surprising since 47 million dont have any coverage. Indeed,the Harry and Louise characters were miraculously reborn as reformadvocates in an ad campaign launched by a consortium of groups,including the National Federation of Independent Business and theAmerican Hospital Association.

We have a pretty good idea what President-elect Obama wants todo. He promised to establish a National Health Insurance Exchangeoffering a range of private insurance options, including a newpublic plan based on benefits available to members of Congress.

If he has his way, he also would prevent insurers from rejectingapplicants due to preexisting conditions, provide a tax credit forsmall businesses that buy coverage for employees, and subsidizeindividuals who cannot afford the prevailing premiums.

Under his plan, parents would have to provide coverage for theirchildren, but no adult would be mandated to buy insurance.

The big question, however, is how the president-elect willfinance his ambitious healthcare initiative. He spoke vaguelyduring the campaign about doing away with paperwork to savebillions, as well as levying a tax surcharge (Sen. John McCaincalled it a fine) against large employers that dont offerinsurance.

Even in a strong economy, the funding challenge would beformidable. But with the country mired in a financial crisis and adeepening recession, the White House will have an even tougher timetackling an expensive issue like healthcare reform.

However, I doubt President-elect Obama will allow himself to bemerely a crisis manager, if not reduced to a caretaker role,spending all his time cleaning up the mess left behind by hispredecessor. He was elected on a platform of change, and he will beexpected to deliver on some bold initiatives. It doesnt get anybolder than healthcare reform.

In addition, rather than be deterred by the ominous fiscalhurdles looming before us, he is likely to argue that if the U.S.government can cough up $700 billion overnight to bail out elitefinancial institutions, Congress can certainly find enough cash tomake sure everyone at least has access to affordable healthinsurance.

I also have a feeling that a well-disciplined Obamaadministration will avoid the mistakes made by Hillary Clinton,whose efforts were derailed by micromanagement, policymakingsecrecy and a failure to involve key members of Congress. Havingcome out of the Senate, the president-elect is likely to workhand-in-hand with lawmakers to generate wide support for hisbill.

Why should this be of any interest to property-casualty readers?Well, with employee benefits generating a growing percentage ofagency revenue, especially in a soft p-c market, our agent audiencehas a lot riding on the outcome of this debate. It certainly wouldboost agency bottom lines if small-businesses and individuals couldafford to buy health insurance coverage from them.

However, p-c agency lobbyists are nervous that the establishmentof another government health insurance option will prompt moreemployers to drop coverage (depending on how large the “fine” wouldbe versus their premiums), and whether premiums would beactuarially sound, so that private plans could remaincompetitive.

How do you folks think this will play out?