Health Care

Summary of President Obama’s speech to Congress

Last night, President Obama addressed Congress on health care.  Obama correctly pointed out the problems with our current health care: (1) insurance is unaffordable for individuals, (2) insurance is not portable, (3) insurance companies can deny pre-existing illnesses or conditions and, most importantly, (4) health care costs are rising.  Obama correctly highlighted that employers are shifting costs to employees or dropping coverage all together.  Finally, Obama noted that those of us with insurance are paying hidden costs for those without insurance.

Obama then provided a general overview of his plan:

1. Insurance companies will not be able to deny coverage because of a pre-existing condition.
2. Insurance companies will be required to cover routine checkups and preventive care.
3. The government will create a new public insurance option by 2013.
4. The public insurance option would have to be self-sufficient and rely on the premiums it collects.
5. Government will provide tax credits for individuals and small businesses who cannot afford the lower-priced insurance available in the exchange.
6. Americans who can't get insurance now because they have pre-existing medical conditions, government will immediately offer low-cost coverage.
7. Individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance.
8. Businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements.
9. Illegal immigrants would not receive the reforms mentioned above.
10. No federal dollars will be used to fund abortions, and federal conscience laws will remain in place.

Obama stated he would not sign a plan that “adds one dime to America’s deficits.”  He even provided a provision that requires spending cuts if the waste and inefficiency savings promised don’t materialize. 

Finally, Obama provided that America would pay for these reforms by:

1. Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.
2. Taxing insurance companies a fee for their most expensive policies.
3. Reducing costs by reforming medical malpractice laws.

My analysis

Obama attempted to build a coalition around his health care plan.  There are some concessions Republicans should cheer, including requiring individuals to carry insurance, waiver for businesses to be exempt from providing insurance to its employees, not allowing illegal immigrants these reforms, and hinting at medical malpractice reform.

I, however, am concerned with (1) cost and (2) further government involvement.

First, the costs when our annual deficit this year is projected to be $1.68 trillion.  Obama stated that not “one dime” would be added to the deficit.  However, the Congressional Budget Office (CBO) debunked this under the House bill to the tune of $1 trillion and, I’m sure, the CBO will do the same with Obama’s plan.  At times like these, I like to use common sense.  In sum, Obama’s plan would provide or require health insurance for all Americans.  It has been alleged that there are upwards of 46 million uninsured Americans.  Now, does anyone sincerely believe that 10 million, let alone 46 million people will receive health insurance by “reducing waste and inefficiency in Medicare and Medicaid?”  If this is the case, why do we not reduce the waste and inefficiency now and see if premiums go down?  If this is the case, why have we not done so before?  Or, is this another attempt to veil the true costs of such a governmental program? 

Second, I believe government involvement is one reason we need reform.  The government has created, through the tax system, our current employer-based health insurance.  Under our system, individuals cannot afford their own private insurance and individuals who are covered have no incentive to cost-compare.

So, where do we go from here?  Obama correctly noted that “consumers do better when there is choice and competition.”  Many, including Senator Jim DeMint, have offered alternative plans that would provide choice and competition. 

• I would support a plan that is truly focused on the free market by (1) creating a national insurance market in exchange for reasonable regulations disallowing companies to deny coverage for pre-existing conditions, (2) allowing individuals to transfer their insurance between jobs, and (3) allowing individuals to have the same tax benefits as employers in purchasing insurance.
• I would support a plan that controls costs by (1) encouraging individual incentive to cost-compare providers, (2) reducing the apparent “waste and inefficiency,” and (3) reforming medical malpractice. 

If these were implemented, I believe health care costs would go down and insured Americans would increase.  Most importantly, if these were implemented, I believe all Americans, including Republicans would agree that our nation is the best and most prosperous nation in the world and we should look after our poor.  If we had a true market-based system, I believe even Republicans would allow tax credits or governmental insurance for those of true need.  However, unfortunately, we must oppose this further governmental involvement.