Senator Obama's health care plan emphasizes from the start two points that are at the center of concern for anyone studying a more comprehensive health care solution. Taken directly from his campaign website, the Senator states:
"Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.
If you don’t like your health insurance, or you don’t have health insurance, you will have a choice of new, affordable health insurance options."
On the surface that sounds excellent. All of us with insurance would love to see a reduction in costs, while those without insurance are very much in need of some form of affordable coverage. Now, the word "affordable" is very much up for debate since many of those without insurance today can't afford their present bills, let alone anything added on for health care. But for the moment, let's take the statement as written and at face value.
Since the Senator took the time to itemize each of the key points in his plan, I will repeat them hear and comment on each of them. The points I'm listing are directly off his website.
Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums.
Most company sponsored health care plans do have a pre-existing waiver built in during the annual open enrollment period. As we age, this becomes a necessity, and it's good to see some recognition of this requirement built into a health plan. Mandating it, however, will result in an increase in insurance premiums. Once insurance companies are forced to accept pre-existing conditions by default, the natural response will be to raise the cost for everyone.
Create a new Small Business Health Tax Credit to help small businesses provide affordable health insurance to their employees.
This point is necessary if we're going to require small businesses to provide health insurance benefits, assuming they are sharing in the cost of that insurance. Small businesses are at the heart of local economies, but all too often they exist on a shoe-string budget, surviving from month to month. A mandate from the government that forces a significant increase in their expenses must come with some government protection in the form of tax credits. I fully support this point in the Obama plan.
Lower costs for businesses by covering a portion of the catastrophic health costs they pay in return for lower premiums for employees.
The biggest challenge to our current health care system lies in the inability to provide long-term catastrophic insurance. A single major illness can easily wipe out an entire family's savings and destroy their economic future, and that is for a family that has good health care coverage. It does not take long for coverage to be exhausted in the event of serious long-term illnesses that require extensive care. So I agree in principle with the basis for this point in the Obama plan. Where I find myself skeptical is in the cost. Moving a portion of this burden from the corporation (and individual) to the government does make sense on the surface, but before I fully jump on board I want to see more details around the cost. This one could come with a huge price tag.
Prevent insurers from overcharging doctors for their malpractice insurance and invest in proven strategies to reduce preventable medical errors.
No argument here, although caps on malpractice lawsuits have stumbled in Congress anytime they are proposed. There is no doubt that doctors must be protected from the frivolous lawsuit. What is a misconception, however, is the idea that malpractice insurance accounts for a significant portion of our health care costs. It doesn't. In any case, I support the concept behind this point, regardless of its ability to reduce health care costs.
Make employer contributions more fair by requiring large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payroll toward the costs of their employees health care.
Some states do have laws requiring any employer with 10 or more employees to offer some form of heath insurance. Enforcing this type of requirement is certainly the right approach. The best solution to the health care issue is not socializing the health care system. Rather, the best solution lies in ensuring that anyone that wants a job can find a job, and requiring those employers to provide health care options to their employees.
Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.
Read this one carefully. I believe the gut reaction of most conservatives will be to scream "socialism" when this point is raised, however if you read it carefully it's nothing of the sort. What Obama is proposing sounds more like a national pooled plan that allows individuals and small businesses to take advantage of the bulk purchasing power already available to large corporations. This concept actually makes a lot of sense, and may be the best solution offered to reduced the cost to individuals or small businesses. It's that loss of bulk buying power that cripples the ability of the individual to obtain affordable health care on their own.
Ensure everyone who needs it will receive a tax credit for their premiums.
As they say, the devil is in the details and this talking point lacks any at all. It's hard to comment on the viability of an option that does not define need, does not define the amount of a tax credit, and fails to account for the funding of that tax credit. This talking point is political campaign fluff, pure and simple.
Lower drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programs and taking on drug companies that block cheaper generic medicines from the market
While I'm grateful to see the adjective "developed" used in this context, I oppose the importation of drugs from other countries. The reason, though, may surprise you. A great deal of drug research is done in the United States. We Americans pay a very high premium for that research. Drugs that are imported from other countries are the result of that research, but the cost is not being shared across the board. Rather than allow the importation of cheap drugs - many created as the result of American research - we should require the cost of that research to be passed on to the drugs we export. Our own pharmaceutical companies are not passing that burden on to overseas buyers, so we end up paying an artificially high cost. That's the part that must be corrected, and importing drugs is not the answer.
Require hospitals to collect and report health care cost and quality data.
This is just sound business practice. If hospitals aren't doing that today, then the first question should be "why aren't they?"
Reduce the costs of catastrophic illnesses for employers and their employees.
This sounds great, but without details it's just political campaign fluff. Cost reduction is not something you can mandate, so let's see some details on how it will happen.
Reform the insurance market to increase competition by taking on anti-competitive activity that drives up prices without improving quality of care.
This is another point that sounds very good, but is sorely lacking in details. Before signing up for this one, I'd like to see how the Senator plans to reform the insurance market. Without those details, this one also falls into the campaign fluff category
So now comes the multi-billion dollar question. How will the Obama plan pay for itself? Straight off the website he says:
"Barack Obama will pay for his $50 - $65 billion health care reform effort by rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level."
What will pay for it is a tax increase for those making more that $250,000 per year. Now, the question you have to ask yourself is this. What impact will be felt by the lower and middle classes if we increase the tax burden on the wealthiest Americans? In my view, a tax increase at the high end will result in more American jobs being shipped to India and China, lower wage increases (that already trail inflation by 50%), more layoffs, and higher prices for goods and services. Increasing taxes on corporations and the folks that run them is not the solution.
In summary, there are some very solid points in the Barack Obama plan. Overall, I think the plan is a good starting point for discussion. I do not like the method of paying for it, preferring instead that we reduce other areas of the budget to compensate for this increase. On the whole, however, in comparing this plan with the one offered by Senator McCain, I believe the Obama plan will increase the number of people currently insured. I don't believe it will reduce cost - in fact, I believe it will increase cost - but in the long run some form of insurance will reach more Americans.