Senator Obama’s long-anticipated healthcare plan has finally been released.
It’s been receiving mixed reviews from people like Ezra Klein.
The two biggest complaints seem to be:
- It’s not universal health care
- It doesn’t do enough about private insurance companies.
Below I explain why these two concerns do not hold up after reading the plan, as well as a detailed look at the rest of the plan.
These two complaints stem from the fact that Obama’s plan doesn’t contain as much (for lack of a better word) authoritarian mandates.
By authoritarian mandates, I mean mandates by decree. There are also mandates by circumstance. Let me explain the difference in the context of our energy problem and our desire to limit carbon emissions.
- A law prohibiting the mining/drilling/burning of fossil fuels would be a mandate by decree.
- If either
a) all fossil fuels have been used up
or [more likely]
b) a cheaper clean method of energy production has been devised
there would be a mandate by circumstance to limit mining/drilling/burning of fossil fuels
It’s true that other than children (5), Obama’s plan doesn’t require people to be covered. However, it does provide people an affordable way to get health insurance.
Here’s how it works:
Obama will make available a new national health plan which will give individuals the choice to buy affordable health coverage that is similar to the plan available to federal employees. The new public plan will be open to individuals without access to group coverage through their workplace or current public programs. It will also be available to people who are self-employed and small businesses that want to offer insurance to their employees. (3)
And here are the specifics (3-4) (although he of course doesn’t have specific numbers regarding costs yet, those will come [note that Edwards plan doesn’t have specific cost numbers yet either, just in case someone was planning to bash for that]
- Guaranteed Eligibility-(obvious for a public plan, but still important)
- Comprehenseive Benefits-similar to those in federal plan enjoyed by members of Congress; full coverage of preventive, maternal and mental health care, as well as ” disease management programs, self management training and care coordination for appropriate individuals. “
- Simplified Paperwork (emphasis on electronics to keep costs down)
- Easy enrollment
- Affordable premiums, co-pays and deductibles-“Participants will be charged fair premiums and minimal co-pays for deductibles for preventive services.”
- Portability-same insurance from job to job (also obvious and important, especially so these days)
- Quality and Efficiency-Hospitals and providers participating will have to collect and report data to ensure that they meet standards for quality, administration and information technology
- Subsidies-Of course important, because until people start getting fair wages, even non-profit health insurance will be too expensive for those on the lower end, but too affluent to qualify for Medicaid or SCHIP” These people “will receive income-related federal subsidies to keep health insurance premiums affordable. They can use the subsidy to buy into the new public plan or purchase a private health care plan.”
After reading this last line, you’re probably crying “Corporate welfare! Corporate welfare!”
Well, not exactly. Of course, the subsidies for those who choose the public plan won’t be corporate welfare.
But even for those who choose the private plan, it’s not strict corporate welfare either. Yes, insurance corporations can get the money, but they have to meet an awful lot of standards to do it.
This is where Obama’s regulatory commission, the “National Health Insurance Exchange” comes into play.
To provide Americans with additional options, the Obama plan will make available a National Health Insurance Exchange to help individuals who wish to purchase a private insurance plan. The Exchange will act as a watchdog and help reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible. Through the Exchange, any American will have the
opportunity to enroll in the new public plan or purchase an approved private plan, and income-based sliding scale subsidies will be provided for people and families who need
it. Insurers would have to issue every applicant a policy, and charge fair and stable premiums that will not depend upon health status.The Exchange will require that all the plans offered are at least as generous as the new public plan and meet the same standards for quality and efficiency. Insurers would be required to justify an above-average premium increase to the Exchange.
In order to be eligible to accept clients receiving subsidies, an insurance company will have to meet these standards.
In fact, although it’s not mandated by decree, in order to get clients who are eligible to receive these subsidies, an insurance company will pretty much have to meet these standards.
This is because almost everybody eligible for the subsidies will want to get those subsidies. If insurance companies refuse to step up and meet these standards, then that’s fine. We’ll just be that much closer to a single-payer system, as the tens of millions of uncovered Americans eligible for subsidies go with the new public plan.
Of course, even if they want to meet those standards, it’s not going to be easy. They have to offer at least as much coverage as the public plan and meet the same quality and efficiency standards. In order to get access to those clients (or anyone else choosing to use the National Health Insurance Exchange), they’ll have to give the same benefits in a more efficient/cheap manner than the federal government. Otherwise, they’ll either have no profit margin or they’ll be charging too much to compete with the public plan.
The Exchange would evaluate plans and make the
differences among the plans, including cost of services, transparent.
The federal government already does this sort of thing to a limited extent for some other industries (safety for auto industry, Energy Star for most appliances, etc.)
In recent years, the car insurance industry itself has sort of done something like this (or at least it seems that way based on the commercials; I don’t drive so I don’t know just how dishonest those compare-services are)
Of course, the health insurance industry hasn’t, so the government needs to step in to allow people to make informed choices.
The final question: how is he paying for this? Several ways:
- repeal of the Bush tax cuts on the wealthy
- Tax on employers not providing health insurance (4-5)
- Many, many cost-reducing provisions.
* Pushing for care management programs to eliminate duplicity in care for chronic illness-” More than half of Americans with serious chronic conditions have 3 or more different
physicians, leading to duplicate testing, conflicting treatment advice and prescription drugs that are contraindicated. ” (7)
- Disease Management Programs-75% of health care dollars are spent on those with chronic conditions; increasing use of these programs will improve quality and lower costs (7)
- Pay for quality of care rather than just for quantity (7)
- Institute for research on comparative effectiveness-This institute will guide research and reviews of the comparative effectiveness of different treatments and drugs (especially important for drugs; for one health problem, I was put on as many as 8 different drug regimens before one of them worked) (8)
- Malpractice reform-Obama goes the progressive root on dealing with the rising costs of malpractice insurance (most Democrats don’t seem to want to touch it, perhaps because the current system works well not only for insurance companies but for their top campaign donors as well). Obama’s plan is to strengthen anti-trust laws to prevent insurance companies from overcharging doctors, and he’ll also be promoting new models to address physician errors to make patients safer, strengthen doctor-patient relationships, and thus avoid the need for so many malpractice suits. Good for patients and doctors; awful for insurance companies, and slightly bad for trial lawyers (depending on how much error goes down) (8)
- Take action against monopolies-“Barack Obama will prevent companies from abusing their monopoly power through unjustified price increases. In markets where the insurance business is not competitive, his plan will force insurers to pay out a reasonable share of their premiums for patient care instead of keeping exorbitant amounts for profits and administration.”
- Drug Reimportation-Obama’s Secretary of HHS, will certify that safe drugs are safe and thus allow reimportation assuming the bill pending before Congress passes and nothing better happens in the meantime.
- Generics-Obama will ensure market power doesn’t keep generics out of the market
- Allow negotiation with pharmaceutical companies for Medicare prescription drug plan
- Cracking down on waste and abuse in the private plan alternative to Medicare
- A strong emphasis on cost-saving prevention (after all, “an ounce of prevention is worth a pound of cure,” that still holds true 250 years after Franklin said it).