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The President’s vision for health care reform
President Obama recently addressed a joint session of Congress and the American public. As always, his speech was forceful and well-delivered with just the appropriate amount of emotion.
The responses to his address have been somewhat confusing, though. It’s almost as if different listeners heard only what they wanted to hear. Transcripts of the speech are available and here is exactly what he said and what he didn’t say.
First, he stated three goals of health care reform 1) provide more security and stability to those who already have health insurance, 2) provide health insurance to those who don’t have it now, and 3) slow the growth of health care costs. Obama hopes to do this with bi-partisan support, but he went on to say reform is so important he is willing to pass a bill with only Democrat votes.
He said nothing in his reform would “require” a person to change insurance plans and that all plans would cover “basic” and “preventive” care as defined by the government. He favors a “public” option to compete against private insurance companies and a government-controlled insurance “exchange” to serve as a market portal for the various plans. He advocated for imposing a “best practices” requirement, again as defined by the government, on how doctors treat patients.
The President said he supports an individual mandate requiring every American adult to purchase health insurance or pay a large fine, and an employer mandate or a fine for “large” businesses. He also waded into the underwriting arena by seeking to require the guaranteed issue of insurance regardless of pre-existing conditions. He would cap out-of-pocket expenses for individuals, with no limit on health insurance claims payments. Both new underwriting requirements would greatly increase the cost of buying most insurance policies.
Under current law, the Medicare Trust Fund cannot be raided to finance reform, but the President wants to create a special panel to eliminate waste and fraud and make Medicare more efficient. He would expand Medicare Part D to cover all prescription drugs for seniors.
The President said he believes his plan would be deficit neutral while slowing the rise in federal spending. The cost would be $900 billion over the first 10 years and would be paid for by taxing the rich and by a new premium tax on insurance companies. Government subsidies would be provided for the poor with tax credits based on financial need.
He stated tort reform would happen by directing the Secretary of Health and Human Services to initiate pilot programs on the state level and track their success.
So what didn’t the President say? For starters, he didn’t mention the fact Republicans had submitted over 50 amendments to the House bill under consideration — none of which were accepted. He also didn’t tell the American public the Republicans had offered over 30 health reform bills of their own — again, none of which were considered in committee by the majority party. This go-it-alone approach by the Democrats does not sound like the “bipartisanship” he called for when he was running for president.
Perhaps it was an oversight, but the President didn’t point out that over 50 percent of people with individual or employer sponsored health insurance would be forced into the “public” option for purely economic reasons. Nothing would “require” them to change plans, but if the government program has the same benefits and is cheaper, individuals and employers would be foolish not to switch.
He also didn’t explain how an individual mandate would be unenforceable, but would allow the government to dictate insurance benefits and pricing. A guaranteed issue of health insurance sounds great, but would be analogous to a person buying home owners insurance after the house caught fire; there would be no reason to get insurance until you got sick.
The President’s plan is actually very similar to the original House bill which the non-partisan Congressional Budget Office estimated would add $1.1 trillion to the deficit. Obviously, this would not be budget neutral, unless taxes increased dramatically on the rich and the middle class. Also, if there is so much waste and fraud in the current system, why not fix the problem now?
Basically, the President’s plan for health care reform has the same essential features as the original House bill (HR3200) and the Senate Health Care Committee bill (Kennedy-Dodd). By listening carefully to the meaning of his words and not the eloquence of his delivery, you soon realize he is advocating a substantial increase in the government’s role in America’s health care and a
$1 trillion increase in the federal deficit to pay for his plan.
Dr. Roger Stark is a retired surgeon and a health care policy analyst with Washington Policy Center, a non-partisan independent policy research organization in Seattle and Olympia. For more information contact WPC at 206-937-9691 or washingtonpolicy.org.