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News of the Day ... In Perspective

6/14/2007

U.S. presidential candidates propose universal health insurance

Presidential hopeful Barack Obama says that “universal health coverage” has been debated for decades, and “the time had finally come to act” (Ireland Online 5/29/07).

His proposal would require every American to carry health insurance, and a National Health Insurance Exchange would monitor insurance companies. The plan “injects additional money to pay for the expanded coverage,” while claiming to save the average American €1,800 per year [about $2,500].

He plans to reduce waste and inefficiency by spending $10 billion on health information technology (IT) over 5 years.

Obama was the third Democratic presidential hopeful to propose sweeping reform. Sen. Hillary Clinton’s plan, released a week earlier, would spend even more, $3 billion per year, on IT. Sen. John Edwards introduced a plan in early February.

As summarized in the headlines, “shift in public attitudes since ’94 Clinton fiasco” explains “why health care no longer makes politicians leery” (Jackie Calmes, Wall St J 5/30/07).

Medical expenditures have continued to rise “since the failure of the Clinton health-care plan in 1994,” Calmes points out, from $3,469 to $7,498 per person, and from 13.7% to 16.2% of GDP. During this period, Congress has engaged in “incrementalism” rather than “sweeping reform.” Still, no one, not even Clinton, is talking about “an overhaul as ambitious as the 1993-94 Clinton plan.” And Sen. Clinton “will seek consensus before moving ahead.”

The insurance industry is thought to be in the mood to try to shape the proposal, instead of opposing it with “Harry and Louise” ads.

The Edwards and the Clinton camps say that Obama’s proposal won’t achieve universal coverage because it has only an employer, not an individual mandate to buy insurance. Obama claims that his insurance watchdogs would set rules and standards to make coverage “affordable and accessible.” If it didn’t result in coverage so attractive that everyone would buy it, he’d revisit the issue. Meanwhile, Obama claims that the Edwards plan wouldn’t achieve universal coverage because individuals wouldn’t be mandated to have coverage until it becomes affordable.

“Many Americans—especially the healthy and young—won’t buy policies unless required to do so, thereby keeping premiums and costs higher,” writes Calmes.

Financing for expanded coverage, according to the article by Calmes, would come from healthy young persons who now forgo insurance because they don’t think it’s worth the cost; from the “wealthiest,” who would lose the “Bush tax cuts”; and apparently from the healthy not-so-rich as a consequence of “sliding scale” premiums based on income rather than risk. Other “losers” include insurers and drug makers.

Theoretical (but never proved) savings would come from spending more on “preventive” measures as well as IT.

Obama blasted the pharmaceutical and insurance industries for “profiteering and killing all past attempts at change,” Calmes writes. She says Obama will allow them a seat at the table, but “they don’t get to buy every chair.”

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