Health Care and Politics II – The Democrats




Most Americans are willing to pay higher taxes to make health care reform possible, but, like politicians, they disagree about what reforms should take place.

Should the government mandate a health care plan or should insurance carriers do a better job of providing coverage?

The Democrats, led by Presidential candidate Senator Barack Obama, plan to rely on a “play or pay” system that would improve access to insurance and move the United States toward universal coverage. This system builds on the predominating employer-sponsored insurance coverage that has been a cornerstone of the American workforce since the 1940’s. Under the Democrat’s plan — which is a resurgence of the plan of choice for many Democrats in the 1990’s — employers would be required to offer employees insurance coverage or pay a tax.

Barack ObamaThis plan would retain private insurers, but would heavily regulate the industry to ensure that all Americans had access to coverage. Provisions are in place to allow currently insured Americans to keep their current coverage, if they so choose. Under Obama’s plan, Americans without access to other group coverage could either choose a new government health care plan that would be similar to Medicare, or choose a private insurance option from a national health insurance exchange.

Obama also plans to establish purchasing pools for businesses to increase access to coverage, provide subsidies to low-income families for the purchase of health insurance, and expand current government programs, like Medicaid and the State Children’s Health Insurance Program to cover more low-income Americans. Further, regulations would be in place to prevent insurance companies from denying coverage for pre-existing conditions or charging high premiums to sicker individuals.

The impact that Obama’s plan might have on coverage is impossible to assess. It depends on the extent of subsidies offered, prices of premiums, and total payroll tax offered to employers. For example, if the employer’s tax is set too low, many employers would likely choose to pay it rather than continuing to offer coverage, and enrollment in a national plan could be substantial – substantial enough that the funds may not exist.

Also, like McCain’s plan, Obama’s plan may not cover all of the uninsured Americans today. The Republican’s plan offers no mandates for coverage, but the Democrats do mandate coverage for children. With no mandate on adult health care, many uninsured adults could remain without health insurance. (Obama has not ruled out a mandate for adults in the future if the plan does not lead to universal coverage.)

The Democrats plan to finance this new health care system by repealing tax cuts adopted by the Bush administration for families making more than $250,000 annually. (Interestingly, the Congressional Budget Office already plans on these tax cuts expiring in 2010, so their expiration may not generate the necessary $50 to $65 billion to finance the program.) The tax paid by employers who do not offer coverage would also help fund government coverage.

Like the Republican plan, the Democrats also plan to control costs by encouraging the use of electronic medical records, promoting disease management, emphasizing prevention and public health, and paying providers based on health outcomes. All of these are certainly laudable goals for either side of the political aisle, but it is unlikely that any of these measures will significantly reduce costs in the short run.

Senator John McCain and the Republicans support a system of free markets and deregulation, while Senator Barack Obama and the Democrats support employer mandates and new regulation as a means of reforming our broken health care system and expanding access to health coverage. Both of the candidates promote a platform of health care reform, but there are certainly no guarantees that any reform will come about in a timely fashion. Even if he can incite reform, the likelihood of a new system looking anything like either of these two plans is remote. Both plans still leave behind uninsured Americans and lack significant funding sources. Change is coming, but which change is best for all Americans?

References

J. Oberlander (2007). Presidential Politics and the Resurgence of Health Care Reform New England Journal of Medicine, 357 (21), 2101-2104 DOI: 10.1056/NEJMp078202

J. Oberlander (2008). The Partisan Divide — The McCain and Obama Plans for U.S. Health Care Reform New England Journal of Medicine, 359 (8), 781-784 DOI: 10.1056/NEJMp0804659

R. Steinbrook (2007). Election 2008 — Campaign Contributions, Lobbying, and the U.S. Health Sector New England Journal of Medicine, 357 (8), 736-739 DOI: 10.1056/NEJMp078151

  • Mary Bagwell

    Obama’s plan is infinitely better but this problem will never be fully solved until we have a single payer system. Anything that is operated for profit is just that. The first consideration of the insurance companies and health care providers is their bottom line so profit will always be put ahead of the well being of the public.

  • Andrew

    And just what kind of “health coverage” are we talking about here, with either candidate? Our “health system” is run completely by the medical-pharmaceutical complex, working hand-in-hand with the FDA and FTC to create the monopoly on “health care” that is taking place in this country. As an avid proponent of alternative health care, which is mostly health promotion and disease prevention through nutrition, supplements, and inexpensive natural alternatives, I see Obama’s socialist universal health care ideas as setting in stone the monopoly on the sickness system that makes Big Pharma rich and keeps us sick and paying, whether its on our own, our through our health coverage. If there was TRULY a free market in medicine, we would see droves of people turning to inexpensive, natural alternatives that would solve the problems we are having today. Neither candidate is addressing the foundation corruption of our “system” and seem to be seeking only different routes of achieving “coverage” – again I ask, coverage for what? It’s currently useless in many states to even have coverage by providers like Blue Cross if you want to see a natural doctor. Many states don’t allow alternative medicine to even be covered. So we are being forced to pay, either through a tax or through buying our own insurance, or even through the cut that is taken out of employee pay (indirectly) by the employer to cover the “health insurance” that is provided, to support a monopolistic system of “health care” in which we have no choice but to accept the expensive, non-effective drug and surgery route that is currently mainstream in American medicine (but is dwindling thanks to the truth getting out). I would like to see reform in American medicine altogether and to see the monopolistic empire that earns Big Pharma millions crushed. We need to address the root cause of disease which often times cause by malnutrition and pharmaceutical drugs themselves! It’s not wonder that hundreds of thousands of people die every year in America due to drug side effects. I want to start hearing less about how we are going to get people “covered” under this current system and how the SYSTEM ITSELF is going to be changed to allow for natural alternatives that WORK and that are INEXPENSIVE. We need to stop the FDA and FTC, who are bed buddies with Big Pharma, from forcing this monopoly down our throats through arbitrary regulation that benefits Big Pharma and squelches everyone else. Why is THIS not being talked about? Wake up people!!

  • Rick

    Deregulation, thats McCains plan. Well heck, it worked so well for the financial industry, how could it fail.

  • No More Taxes

    I am one of the minority who is _not_ willing to pay higher taxes to make health care reform possible. Obama’s plan in particular (and McCain’s to a lesser degree) are nothing more than thinly disguised socialism. Let’s take this to its logical extension – for those who say they are willing to pay higher taxes to make health care reform possible, why not send _all_ your salary to the government and in exchange let the government give you free health care, food, housing, etc.? That way you’d never have to worry about anything because the government would take care of everything for you.

    Oh by the way – that would mean that the government could decide whether or not you were actually “sick”, what and how much food you would get, where and what kind of housing you get, what kind of car you could have, etc.

    The other fallacy to these plans is that anytime the government gets involved, the politicians in Washington can’t seem to keep their hands out of the cookie jar. That’s why Social Security and Medicare are such a financial mess already, and we saw what happened with all the pork that was added to the (socialist) “bailout” bill that the pols told us needed to be passed to keep the financial world from imploding.

    Get the vulture trial lawyers under control and let people set up interest bearing Medical Savings Accounts (that can be rolled over year to year with no taxes on interest gained). Couple that with some reasonable reforms otherwise and we’ll be well on the way to solving the health care “crisis” without needing the government to get involved and make a bigger mess of things.

  • Josh

    …”Most Americans are willing to pay higher taxes to make health care reform possible”…

    SAYS WHO? I’m an American – I don’t remember being asked my opinion? Where do you come up with this rubbish?

    Let me explain this once and for all – nothing done by the federal government is done as well as the private sector. For an example see Walter Reed Scandal of ’07. And for those of you saying “that was a military hospital”, no kidding – who do you think the military is run by.

    Fact: The organization responsible for the largest reduction in medical costs to consumers in our nation over the last decade is…Anyone?…that’s right, WalMart. With their $4 prescriptions. If you think that is my opinion look it up on MSNBC’s money section.

    Take away regulation, take away standards set by the feds and states that require all sorts of mandatory coverage on little things like Port Wine stains (written into almost every health insurance coverage in the US) and allow health insurance to act like car insurance and costs will come down and service will get better because of competition.

    One thing that you need to understand about regulation; it hurts competition. Large companies, like oil companies and insurance companies, like regulation. It keeps other companies from entering their market. Regulate it more, that just means that you’re stuck with the big 5 or 6 insurers and their plans. Deregulate and watch smaller, more agile companies come in, offer more personalized health plans with better service and watch the big boys scramble to keep up. Competition brings down costs makes service better.

    RICK – as for the financial sector. You believe that deregulation got us in this mess – but you’re wrong. Banks want to stay in business. Because of that they don’t make risky loans to people. That’s why they check your credit score, income level and other data before giving a loan. In the late 90’s congress passed the Community Redevelopment Act which encouraged banks (through legislation) to give loans to lower income people who would normally not qualify for these loans. Banks began making poor loans. Standards got worse. Then those people, who would never have been given those loans without government interference, couldn’t pay back those loans. And now you understand Econ 101.

    So yes, deregulation would have worked better for the financial industry. keep the government out of it.

    I DON’T WANT TO BE TAXED MORE!

  • Actually, our organization, CodeBlueNow! has been asking the public what they want over the past five years and have created a Voters’ Health Care Platform that is based on the values the public holds in health care. We gleened this information from two market research surveys, and by partnering with other nonpartisan nonprofits. The details of the Platform and our research is on our website: http://www.codebluenow.org

    They don’t want tax-based, government run health care nor do they think health care should be totally a personal responsility like automobile insurance. They do however want a larger role in managing the system and more accountability from all involved.

    Kathleen

  • Anonymous

    We need to set up a healthcare system and in that a government that has the public’s interests in mind. Right now that sounds like utopia, otherwise we’ll just self destruct each other in the name of the shareholder.

    Josh – I am glad you know enough of Econ 101 to condescendingly offer advice to others, but you could certainly use a class on secrutization.

  • vj

    I want the government to stop being everyone’s father. Grow up, get a job, and buy what you need. If you need health care, cancel the cell phone, xm radio, cable, internet access, and other luxuries and buy it. Every sniveling whining idiot I’ve met on this topic has these luxuries. The free ride is over in case you missed the crash last week thanks to government required loans to people who couldn’t afford to pay. Socialism does not work. Social Engineering is a policy disaster of unparalleled proportion. What works is when people work for a living and contribute to society instead of sucking it dry.

  • Josh

    thanks for the feedback Kathleen.

    I looked on your website but did not find survey information, only reported results.
    I’m glad someone is looking into this, but what was your study sample and what were some of the questions ? Can you post them (no, I’m not being condescending, I would actually like to know). Or can you direct me to the page where it shows that data?

    My feeling, as you can tell from above, is that government needs to play as small a role as possible otherwise I feel that we’ll end up with another medicare. But I am interested in what others think.

    And to Anonymous: Just to be condescending one last time – were you shooting for securitization?

  • Josh

    Kathleen,

    found the info,

    thanks,

  • I, for one, don’t have a problem with the Democratic healthcare plan. I would submit to those who rail against socialized medicine that we already have it here in the United States. Those people who can’t afford healthcare get their needs met in the emergency room where they can’t be turned away, and taxpayers foot the bill for their care through Medicaid and state funding to hospitals. This is a woefully inefficient way to run healthcare, because all we are paying for is catastrophic care and management of disease long after they should have been addressed. If we’re going to pay for care anyway, I’d much rather see that money go towards preventative care, screening tools, and patient education programs to manage diseases in the earlier stages.

    For those who think that the government can’t do anything right, I would take a look at private health insurance vs. Medicare. Private health insurance operates at anywhere from 28-33% overhead, which goes toward operating costs as well as profits. Medicare operates at about a 3% overhead, meaning 97 cents of every dollar goes right back out into paying benefits. They’re not as bad as you think.

  • I respect what Andrew has to say about Natural healing. I am all for preventative measures to stay healthy. But not all people are built the same, and the notion of Genetic makeup as well as disease, and mutation are all closely tied to the complex systems he may be referring to. What Obama is saying is lets give people the basic human health care they need to survive in the system. Now we are talking about a medical system that needs to be tightened but also needs apparently to exist in one way, shape or form. The point is, to be gallant we have to move in the right direction one step at a time. Of course its not enough to do what we are doing now. Americans are one of the last industrialized nations not to go with single pay ins. Although we may be the most diametrically opposed due to the prosperity of the few gouging us with the idea that health care is a privilege and not a right. But I think we can make sense to all people by looking at the situation, and coming up with a comprehensive solution. Until we become more 21st century, where alternative medicines and nutrition will make sense once again we need the health care initiatives Obama is offering. So my vote is for the right first step, living in a not so perfect world and with our own mortality at stake every day. BTW, If I had blue cross ins. at least I could stop the chronic pain associated with my disease, with the modern treatments of the current system there may be more than meets the eye. So there is a balance… Check out an article Andrew, or anyone who is interested in the topic…Views mixed with a bit of reality and wellness. wellness program,wellness plan

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Jennifer Gibson, PharmD

Jennifer Gibson, PharmD, is a practicing clinical pharmacist and medical writer/editor with experience in researching and preparing scientific publications, developing public relations materials, creating educational resources and presentations, and editing technical manuscripts. She is the owner of Excalibur Scientific, LLC.
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