Sweeping Changes: The Obama health care plan would extend insurance coverage to individuals and businesses while increasing federal government regulations of the industry. It would create a National Health Plan and a play-or-pay financing choice for employers. The model is based on assumptions for short-term savings but questionable long-term fiscal sustainability, according to a panel of experts writing for the Health Affairs Journal. The plan expands eligibility coverage of Medicaid and mandatory coverage for children but fails to address the economic incentives that drive health care spending now estimated at $12 billion. The National Health Plan would be available through the Health Insurance Exchange to anyone who does not have medical insurance. It must accept all comers despite preconditions and provide subsidies for those who cannot afford the premiums. Obama has described coverage "like the plan available to Congress." The most popular Federal Employees Health Benefits program includes a $600 annual deductible, $15 copayments for doctor visits and a monthly premium of $1,028 with the government contributing $713. Lower paid employees such as postal carriers pay less up front costs but receive fewer benefits. The Obama plan would extend the pool of the federal employees to the nation's uninsured with greater subsidies, a concept, the experts say, tantamount to a fiscal death march.
Play or Pay: Employers offering group insurance to workers have the option of joining the National Health Plan program that includes subsidies for high-risk catastrophic coverage. Or, they can opt out and pay an additional 4% payroll tax for its employees. Premiums employees pay would continue to be tax exempt under the Obama plan. "Even though employers would welcome the subsidy," the report says, "the insurance does not reduce health care use or cost. Instead, the policy just shifts some of the cost to the federal budget and could even increase health care spending." Small businesses would be exempt from the play-or-pay plan.
Not Universal Coverage: Health coverage for children paid by their parents is the only mandated coverage in the Obama Plan. Obama campaign consultants say the average family would save up to $2,500 a year as a result but increase the federal taxpayer burden an additional $50 to $65 billion annually. Savings resulting from full enactment of the Obama Plan include malpractice tort reform, greater use of information technology, improved disease and preventive medicine management and better payment methods. Critics contend there is little proof that implementing the policies would yield net reductions in health spending.
A Second Opinion: Henry Aaron, chief health advisor for the Brookings Institute, warns the Obama Plan could jeopardize the role employers now play in providing group coverage. He fears too many will drop current plans, especially those with low income employees and older, higher risk staffs. He said it is impossible to forecast who wins and who loses from health reorganization reforms. One thing is certain, he concludes: The Obama Plan would create a mammoth redistribution of wealth among providers that would entail political decisions Congress heretofore has failed to challenge. He questions whether a Democratic Congress with an Obama presidency would feature health care reform because of financial demands on the economy and wars in Iraq and Afghanistan. Polls show voters rate health care fourth on their priority lists.
Email subscribers post your comments on