The Obama Health Care Speech: One Republican’s View
I heard most the President’s speech tonight over the radio. Here are some of what I thought were highlights and what I thought.
What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.
I don’t have a problem with this provision. I’ve long believed that denying someone insurance because of pre-existing conditions, or using the horrible practice of recission should be against the law.
Now, if you’re one of the tens of millions of Americans who don’t currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance. And it’s time to give every American the same opportunity that we’ve given ourselves.
For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can’t get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it’s a good idea now, and we should embrace it.
He makes a nod to the co-op idea and to the idea that market forces should bring prices down. He includes subsidies for those who can’t purchase health care and seems to back a catastrophic insurance scheme that was devised by his 2008 opponent, John McCain. Smart move there. All in all, there are things for someone like me to love.
Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.
Despite all this, the insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.
Hmmm…this I don’t get. If we have consumer protections and regulation (good), and we have companies competing and bringing down prices (also good), and we have subsidies to help those who can’t afford the premiums (really good), then why do we need a “public option?” It just seems like the answer to a question no one is asking.
That said, I do like that he is looking to make it be funded not by taxes, but by premiums.
Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public – and that is how we pay for this plan.
Here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.
Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.
Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money – an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long-run.
Another hmmm moment. Other than the tax on so-called “Cadillac” plans, I don’t see how tackling the old monster of “waste, fraud and abuse” is going to not make this plan a budget buster.
As for his partisan dig at Republicans for leaving a big deficit? Well, it was partisan, but it was also true. Moving on…
Finally, many in this chamber – particularly on the Republican side of the aisle – have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush Administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my Secretary of Health and Human Services to move forward on this initiative today.
I think this is a worthwhile idea and it throws something to the GOP. Will the Republicans take it? I don’t know.
All in all, it was a good speech and he did put some more flesh on the bones of his plan. My problems with it is that he still has not really given a reasonable explaination as to why we need a public option and has not really tackled how to best pay for this plan in a way that won’t bust the already busted budget. He also has not taken on the idea of junking the idea of employer-provided insurance, something that doesn’t work in this age of employment mobility. My guess is that killing employer provided care would mean taking on labor, one the building blocks of the Democratic coalition.
The question remains if he can get Democrats to agree on this, and if Republicans are willing to step up and work on the plan.
I’ve said it before, but I think we need health care reform. The question remains if Obama’s plan is a plan that will work.
22 Responses to “The Obama Health Care Speech: One Republican’s View”
For Repubs competition and tort reform will bring down prices, to the dems regulation and a public option will. If you have all of the above prices will come down AND we still keep a free market system. If you leave one out the repubs or the dems will not believe it will work and if recent history is any indication even if it does work they will just deny reality until people stop asking them about it. In this case both will be able to blame any benefits on their sides ideas say the other sides ideas were insanity but “we survived” and Obama comes out smelling like a rose since he was the pragmatic one. This is pretty straight down the line middle road in my opinion mostly because I have argued for this many times here as well. The numbers I have seen say that tort reform will not do it but it will help. Regulation is much the same, and the public option folks will not care if it has to play by free market rules or not. Yet those against it still will not waver, you tend not to bite the hand that feeds you and medmob has a good deal of food for those that hold their nose. It will put people like McCain in a tough position though, especially after Wilson's idiocy. Ben Nelson was quoted as saying “this is a game changer” after the speech so things could move along really fast if someone that far to the right of this argument(on the dem side) is ready to lay down his sword and make a deal.
Socialized Medicine is the ONLY answer for lowering cost. Every modern nation on the planet have long past accepted this fact.
I won't call you a LIAR like your party likes to scream out, but if you cannot understand this blatant fact, then there is nothing anybody can do to persuade you that black is black and white is white.
Until Dems come to the table and compromise, and the GOP too for that matter. Nothing will happen. The public option is probably dead without reconciliation, and I'm not even sure the Democrats can manage that with it, too many democrats strongly oppose it in one way or another.
Here is an example:
Dem: Prevent abortion funding, or I'll block healthcare
http://thehill.com/blogs/blog-briefing-room/new…
Right now 44 Blue Dogs are against the current democratic efforts. 44 Democrats + 178 Republicans equals a majority. Now what would be awesome is if the GOP could reign in its own far wing and get together with these 44 and pass a moderate measure with no public option and more market based reform. I doubt they can anymore than I doubt the Democrats can reign in their far wing, but it would be a total coup and be funny to watch the leftist wing of the democratic party scramble.
Leonidas -
Your material from Rep. Stupak intrigues me. I thought that since 1992 and the Gov. Casey debacle at the Dem National Convention, “pro-life Democrat” was pretty much an oxymoron. Is he isolated, or is this a growing movement in the Democratic party?
I'm liberal and Democrat but I was also disappointed that he didn't mention the issue of portability. I hate having to change plans. Once, we had to move out of state and we had Blue Cross Blue Shield at the time. Job change wasn't an issue, so I didn't realize we'd have to change plans and do paperwork all over again even though it was the same insurance company. And we ended up paying 3 times as much in premiums! With the same insurance company! Just because we moved! It was many years ago, but I don't think I'll ever stop being angry about it.
What Gov. Casey debacle at the 1992 Dem convention? This is a pro-life and Republican myth. There were a number of pro-life speakers at that Democratic convention. Gov. Casey was not invited to speak was because he was writing editorials that he would never vote for Clinton and even by the time of the convention had not reconciled with his nomination.
“,,, then why do we need a “public option?” It just seems like the answer to a question no one is asking.”
We need the public option to control medical costs. No insurance company has any power to control medical costs. In fact since the insurance companies’ premiums are based on a markup on the actual costs they make more money the higher those costs. They have no incentives to try to control the costs even if they were large enough to try.
You can have competition between the insurance companies, with one asking for 20% markup over costs and another offering 18%, then another saying 15%. But none is large enough to cut down the base costs. Only a large public firm, large enough no doctor or hospital could stay in business by refusing the patients covered by it, can do it.
The biggest single blow to controlling medical costs was the conversion of the Blue Cross Blue Shield companies to for profit companies by the Republican controlled Congress in the mid-1990's. When they operated as non-profits they worked hard controlling costs and they were large enough to do it. When they became for-profits they had no incentive to control medical costs.
Before the conversion, the for-profit companies made money cherry picking the low risk clients. They let the high risk clients slide to the community based premium non-profits. They had an industry wide margin of about 5%. After the conversion they have pushed this margin to 20% (a 25% markup over costs). And they still cherry pick, letting the high risk clients go without insurance.
The precentage of the GDP going to administer the private health care insured system has grown from 1% of GDP to over 5% in less than 20 years. As a comparison Japan pays for its health care, all of it, with 8% of GDP.
The profits of the 10 largest health insurance companies increased by 500% from 2001 to 2007.
These guys make huge risk free profits, requiring no capital investments, and they will fight public options, co-ops, insurance exchanges, market based and all regulatory reforms tooth and nail using the strongest weapons they have. You are going to have to be for them or against them. Chose.
The Post office charges 44 cents for the stamp of a common letter, they charge like 11.5 -17.5 cents for non-profits. The notion that government does not do markups is a farce. This is exactly the same type of entity that Obama spoke of when talking about a public option that would be self sufficient. The Post office isn't exactly thriving and their markups continue. If the government can't run the post office well, what would make anyone think they can run a public option for healthcare, which is much more complex?
If you want to bring down cost remove government restrictions and allow for cross state purchasing of insurance and market forces and competition to take effect. Also tort reform is needed. A database of medical services providers and up front costs is something the government could do productively, allowing the public as consumers access to better information when making healthcare choices and increased transparency.
If there is no control of risk, then the government should stop calling it health insurance. All the government is doing is turning the program into a pre-paid health plan. Everyone will pay very high premiums when they are young and generally healthy so that they can get the money back when they are old. The problem in the U.S. is that too many people will be able to game the system and stick others with prepaying their health care. See the number of people who are getting social security who never really paid much in.
Leo
“If you want to bring down cost remove government restrictions and allow for cross state purchasing of insurance and market forces and competition to take effect.”
It's good to see that the right has now decided that states rights matter only when they are against something. Private Insurance must abide by a States regulations to sell insurance. If an Insurer resides in one state and sells insurance in another state, which state regulations do you wish them to ignore?
Get back to me on that when you're finished dismantling our current system of state based regulation.
super
“The problem in the U.S. is that too many people will be able to game the system and stick others with prepaying their health care”
If you're so aware of how the system can be gamed, I suggest you submit fail-safes to block those loop holes you think you see. It's one thing to complain that it'll never work, and quite another to work to make it work.
What pray tell, are you're solutions or are you just good at negation?
“I was also disappointed that he didn't mention the issue of portability.”
??? Didn't you pay attention to the speech? Obama says that it's “responsibility” for employers to provide health benefits to employees, “irresponsibility” for them not to. In other words, he addressed the portability issue in a deliberately hypocritical manner insofar as the portability issue and the long-sought separation of health care (“insurance”) from employers is concerned. Maintain the existing employer-based system, or employers must pay fines (as individuals must pay now). Surprise!
“The Post office charges 44 cents for the stamp of a common letter”
[laughing loudly] Did you notice that Obama dropped the Post-Office-Fed Ex-UPS analogy in favor of the “public education” analogy, something he felt no doubt was more effective to use, instead?
Never mind that public education itself presents a wealth of criteria for criticism.
[chuckle]
Lynne, Obama did address portability. But hypocritically, not the way you and everyone else would have expected. He insisted that employers should provide health insurance, or pay fines. That is, he deliberately addressed the portability issue by presuming maintenance of the status quo (at least until the employers started dumping their plans and just paying fines, at which point individuals could hopefully get insurance through the public option and health exchange mediation, which they'd be required to buy, as he also said, if you were paying attention).
Oh, he does want the feds to pick up the high risk pool and he still would like a universalist public option to engage in rigged competition with the private insurers. And he wants to require individuals to pay for insurance if employers don't provide it (in which case they'd pay fines). But he wants to use (harness) the existing system as much as he can, at least initially, rather than correctly and directly insist on portability, as would have been consistent with what has been discussed for ages.
“Just because we moved!”
Welcome to the club. When I moved from Washington state to Arizona, I maintained Washington insurance (as did many others, in addition to those who got Washington insurance while living elsewhere, because it was a better deal than in their own state). When Washington ended out-of-state policies, it was a case of several complete rejections in-state (due to a pre-existing condition) until I got an individual policy for $740+ a month — and this was over ten years ago.
Currently I'm in Michigan on Blue Cross at $320 a month for an individual policy, set to rise to around $500 as early as next month.
Now, bear in mind that when you move you are also subject to state laws, and some states have ridiculously extensive minimum benefit packages, which has long been discussed (including on this site) as part of the problem. True “insurance” would be for catastrophic events, hospitalization, etc., not pre-paid comprehensive care, including preventive care that in many cases is not cost-effective.
A question of appropriate behavior. When a politician says he/she will save taxpayer money by eliminating waste and fraud, is the appropriate behavior to a) laugh, b) cry, or c) other?
The speech was well delivered, as always, but fell far short on how health care costs would be contained, how insurance premiums would be lowered and how it will all be paid for.
“save taxpayer money by eliminating waste and fraud” … “how health care costs would be contained” … “how it will all be paid for”
At least Ted Kennedy (subject of sappiness in last night's speech) was honest, though wrong: He wanted to impose price controls. (“Let us insist on real control over what doctors and hospitals can charge…”)
Obama's speech was lacking here. The review of appropriate-care standards and cost controls in this light raises again the decades-long history of politics related to rationing, denial of care, and activism for euthanasia (the obvious reality denied by the scummier defenders of the current effort, who attack all mention of “death panels” dishonestly and stupidly). The “magic” ending of waste, fraud, and abuse is simply not believeable, as well as exposing another hypocrisy as well as defect in the effort underway; logically, reforming Medicare (the vow by Obama to do this nobody intelligent had believed, anyway) should come before federal expansion. Totally bizarre was the disgusting description of Medicare as a “sacred trust” (as with Bill Clinton and Social Security as “the sacred covenant” that I predicted he would, and did, say years ago) followed by the vow that no Medicare trust funds would be used to pay for the health care effort! What a pathetic failed effort at distraction!
At this point, at least I can say he was more clear and in control than lib Dems in Congress, and how the question is, will a measure of sanity be superimposed on the House bill in the Senate, or will the Baucus bill in the Senate become the new basis for reform legislation and be turbo-charged by the progressive kiddies in the House?
“If we have consumer protections and regulation (good), and we have companies competing and bringing down prices (also good), and we have subsidies to help those who can’t afford the premiums (really good), then why do we need a “public option?” It just seems like the answer to a question no one is asking.”
I don't get what you don't get. Private insurance and “the free market” have NOT brought down costs. Just the opposite. As Obama said, insurance premiums have risen 3 times faster than wages. The cost of private insurance has gone up more than the cost of health care (doctors, drugs and hospitals). Private insurance has been a MAJOR CAUSE of increased health care cost. In every country with a public system the cost is less and outcomes better. Perhaps Obama is actually serious about considering every good idea, whether Democratic, Republican or ahem, French.
@ HemmD
The Democratic party has not championed a States' Rights issue to any degree since the Dixiecrats left. For you to say the right is just now addressing that issue is frickin' hilarious. The GOP has consistently been the pro-Federalism party in Congress for the last 30+ years. I really have to wonder what planet you been spending time on.
Yes I did notice and yes it does. Gotta love the comparison especially given Obama's statement about a public option being self supporting without taxes being used for it. Yeah like your taxes aren't paying for State schools and Universities whether you use them or not. What a joke.
“Yes I did notice and yes it does.”
Don't forget the future (I thought of this right after he made that new analogy, as I heard the speech.)
** Employee Free Choice Act to be passed and applied to employees of “public option” enterprises?
[singing] “AFS, CME — AFSCME, AFSCME”
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