President Obama’s Healthcare Reform Plan
Despite the current state of the economy, healthcare costs are continuing to rise. According to national reports, health insurance premiums have doubled in the last eight years and increasing co-pays and deductibles make it hard for some Americans to have access to the proper care. In response, President Barak Obama has introduced a new healthcare reform plan that his administration believes will save the typical family up to $2,500 each year. According to legislative summaries, families could save through:
- Implementing health information technology investments aimed at reducing unnecessary spending that result from preventable errors and inefficient paper billings systems.
- Improving prevention and management of chronic conditions.
- Increasing insurance industry competition and reducing underwriting costs and profits in order to reduce insurance overhead.
- Providing reinsurance for catastrophic coverage, which will reduce insurance premiums.
- Making health insurance universal which will reduce spending on uncompensated care.
President Obama breaks his plan down into three parts which include:
1. Quality, Affordable and Portable Health Coverage for All
President Obama plans to build on existing private and public programs including employer health insurance, private individual health insurance, Medicare and Medicaid. President Obama’s key components for quality, affordable and portable health coverage are as follows:
- Establishing a new public program similar to Medicare for those under the age of 65—This would be available to those who do not have access to an employer plan or qualify for existing government programs. This would also be open to small employers who do not offer a private plan.
- Creating a “National Health Insurance Exchange”—The Exchange would help individuals who want to purchase private insurance plans. President Obama would also like for Americans to have the ability to take their policy from one job to another when it is purchased through the new public program. He would require providers to participate in a new plan to collect and report data about standards of care, the use of health information technology and administration.
- Implementing a “pay or play” provision—This provision would require an employer to either provide health insurance or contribute toward the cost of a public one.
- Mandating families to cover all children through either a private or public health insurance plan
- Expanding eligibility for government programs
- Allowing flexibility in embracing state health reform initiatives
2. Modernizing the U.S. Healthcare System to Lower Costs and Improve Quality
According to national reports, the U.S. spends almost twice as much on healthcare per capita as other industrialized countries, while experiencing poorer health outcomes. President Obama’s goal is to redesign the health system to reduce inefficiency and waste and bring down costs for families and individuals. President Obama’s key components for modernizing the U.S. healthcare system to lower costs and improve quality include:
- Making an up-front investment of $50 billion in electronic health information technology systems to reduce errors, saving lives and money.
- Reducing the costs of catastrophic illnesses for employers and their employees by reimbursing employers for a portion of costs if savings are used to lower workers’ premiums.
- Requiring disease management programs and integrated preventive care to help bring down the costs of caring for people with chronic conditions such as diabetes, heart disease and high blood pressure.
- Requiring health plans to disclose what percentage of premiums actually goes to patient care as opposed to administrative costs.
- Launching a comprehensive effort to tackle healthcare disparities.
- Reforming medical malpractice while preserving patient rights, and strengthening antitrust laws to prevent insurers from overcharging doctors for malpractice insurance.
- Eliminating the excessive subsidies paid to Medicare Advantage plans and paying them the same amount it would cost to treat the same patients under traditional Medicare.
To address the rising cost of prescription drugs, President Obama’s plan will allow Americans to import inexpensive and safe prescription drugs from other countries, increase the use of generic drugs, stop large drug companies from paying to keep generics out of markets and create a pathway to bring generic vaccines and other medicines to the market. The plan will also allow Medicare to negotiate with drug companies for better prices.
3. Promoting Prevention and Strengthening Public Health
At the core of President Obama’s healthcare proposal is the notion that, “Each must do their part…to create the conditions and opportunities that allow and encourage Americans to adopt healthy lifestyles.” President Obama lists employer wellness programs, attacking childhood obesity in schools, expanding the number of primary care providers and disease prevention programs as part of his effort.
At present, the White House website stipulates that this legislation will be enacted by the end of 2009. Critics and journalists are arguing that the battle to make Obama’s plan a reality may be a bigger firefight than the president anticipates.
For ongoing coverage of the issues related to healthcare reform, visit http://www.healthreform.gov.