Obama's healthcare reform proposals

For a party that makes a lot of noise about reforming medical care financing, the Democrats have remarkably little on their website about actual policy proposals.  Most of the "Affordable Healthcare" page is devoted to bashing John McCain's proposals: 'McCain's plan is the Wrong Choice for America's Future' and 'John McCain's Failing Grade on Healthcare' and so forth.  The best they can offer is fixing the prescription drug program and promoting stem cell research.  What exactly will be fixed in the prescription drug program is not mentioned.

Specifics on Barack Obama's healthcare proposals can be found on his website.  According to David Cutler, a Harvard professor who helped write Obama's plan, the candidate's top priority is to have everyone covered by some insurance.  That will be achieved if insurance is affordable and accessible.   A comparison chart released by the Kaiser Family Foundation, describes Obama's main goal as "Affordable and high-quality universal coverage through a mix of private and expanded public insurance."

The "expanded public insurance" part of the equation is a national health plan similar to the health insurance currently available to members of Congress.  This plan would:

• be available to everyone - no one turned away for pre-existing conditions
• include a generous benefits package
• offer government subsidized premiums for low income people
• not be tied to employment - portable regardless of job changes or unemployment
• offer affordable premiums, deductibles and co-pays

Private, employer-based insurance would co-exist with this national plan.  A National Health Insurance Exchange would be established to help people looking for private insurance  The Exchange would set standards for quality and affordability.  Obama would require employers who did not offer "meaningful" insurance coverage to employees to pay into a fund to support the national plan, with small businesses exempted from this tax.  In fact, small businesses would receive a tax credit for medical insurance premiums paid.

Various other initiatives are proposed, such as promoting cost savings with expanded use of health information technology, monitoring quality and effectiveness of medical care and promoting best practices, and supporting preventive healthcare and better management of chronic diseases.

Obama doesn't really break new ground here.  Unless the national health plan replaces existing bureaucracies like Medicare and Medicaid, then this suggestion is not merely inside-the-box thinking, it's yet another layer of bureaucracy in the medical care system.  His main misstep is preserving the employer-based medical insurance system.  All businesses -- from mom and pop restaurants to hair salons to HVAC repair to Home Depot to IBM to Walt Disney -- will be forced to add "medical insurance purchasing expert" to their business plan identity.

Obama at least recognizes the need for portability in his concept for the national health plan.   But by forcing employers to enter the 'medical insurance purchasing expert' business, he's trying to play this issue both ways.  Have the portable national insurance, or have the non-portable employer-based policy that disappears if you change jobs.   Is this the back door to socialized medicine?

But a bigger problem with his plan is laid out by Cutler: "an Obama administration would ban risk-based pricing of all individual insurance plans."  In other words, people with chronic lifestyle diseases cannot be charged more for their health insurance.  Meanwhile Obama claims to be in favor of disease prevention.  

Imagine if automobile insurance were run that way.  Without risk-based rating, we all would be paying the same rates as convicted drunk drivers who had killed people in an accident.  When medical insurance rates are not risk-based, we all pay the same rate as the worst-case scenario: an obese Type 2 diabetic with heart disease, high blood pressure, sleep apnea and impaired blood circulation.  Failing to reward healthy lifestyle choices with lower insurance rates will do nothing to encourage healthier choices.  Failure to encourage healthier lifestyles will result in even more demand for expensive lifelong medical care.  A healthcare policy that fails to include incentives for healthier choices is a policy that will give us more of the same.