Obama Banks on Health Care

by John M. Curtis
(310) 204-8700

Copyright March 19, 2010
All Rights Reserved.                                

            Spotting the finish line, President Barack Obama finally smells victory for his unprecedented health care reform legislation, now estimated by the nonpartisan Congressional Budget Office to save taxpayers $138 billion over 10 years, cutting only slightly into an expected $1.7 trillion deficit this year.  Barack lobbied hard for Democrats previously opposed to the bill because it didn’t offer a single-payer plan like Medicare or Medicaid.  When former presidential candidate Rep. Dennis Kucinich (D-Ohio) threw his support yesterday, it helped other liberal Democrats to embrace the whopping legislation, banning insurers from redlining, excluding consumers with preexisting medical problems.  Under Barack’s new bill, insurers are now required by law to treat individual subscribers the same way they treat group plans, requiring no proof of insurability.

            Republicans and the insurance lobby have fought tooth-and-nail to preserve the industry’s hefty profit margins, in part preserved by offering a variety of plans that exclude preexisting conditions, offering high co-payments and deductibles.  Under Barack’s plan, the government sets the premium prices, deductibles and co-payments, giving subscribers virtually the same coverage as federal employees, insurance benefits earned from years of union collective bargaining.  Insurers, like Blue Cross, will be required to accept the government’s conditions for go out of business.  In addition to improving benefits, the legislation provides coverage to around 32 million Americans, currently without coverage.  Hospitals, physicians, especially Emergency Rooms and urgent care centers, now mandated to take uninsured patients, have a good chance  for reimbursement.

            Under Barack’s plan, all Americans would be required to buy insurance, regardless of incomes.  Citizens unable to afford insurance would subsidized by the government on incomes of $88,000, including an increase in Medicaid funding to the poor.  Medicare funding would be left intact, saving $500 million from Advantage programs, allowing patients to sell-off Medicare benefits to HMO plans, covering co-paments, deductibles and prescription drug costs.  Only Florida, with its disproportionately high numbers of seniors, would retain Medicare Advantage funding.  Realiziing the bill was coming down to the wire, several key House Democrats, including Reps. John Boccieri (D-Ohio), Scott Murphy (D-N.Y.), Allen Boyd (D-Fl.) and Suzanne Kosmas (D-Fl.) all signaled new support for the bill.  Reps. Michael Acruri (D-N.Y.) and Stephen Lynch (D-Mass.) signaled opposition.  

            Despite intense lobbying by Barack, liberal opposition stems from the fact that the overhaul bill doesn’t include a public option, where the government picks up the entire tab.  Some pro-life Democrats still object to ambiguous language permitting abortion under special circumstances.  Still other elected officials object to last-minute changes to reimbursement rates to physicians, seeking higher rates than existing Medicare reimbursements.  Republicans warned of dire consequences should the bill pass the next House vote expected Sunday.  They fear the CBO’s projections grossly underestimate the $940 billion over 10 years, creating budget deficits into the foreseeable future.  Catepillar Vice President Gergory S. Foley warned that the current bill would increase the company’s health care costs by 320% or $100 million in the first year, damaging its employer-based insurance program.

            Opposition for Obama’s health plan overhaul stems largely from the insurance industry, fearing a big hit to profit margins.   Ending government subsidies to Medicare Advantage plans would, according to American Health Insurance Plans spokesman Robers Zirkelbach, “end Medicare Advantage Plans as we know it.”  Health insurers oppose the plan because it cuts into profit margins by requiring plans to insure individuals with existing medical problems, cut deductibles and co-payments and increase the benefits currently restricted by current health plans.  While no one knows for sure the fallout of Barack’s plan, the medical profession and drug companies stand to win big.  While doctors’ rates may go down, the volume of patients is expected to rise together with drug prescriptions.  Insurance companies worry about traditional gatekeeping to control costs.

            Faced with a fateful vote on the Vernal Equinox, Sunday, March 21, Obama and the Democrats hope for the birth of a new era in national health care.  While Republicans have done a good job of shaping public opinion against the bill, Barack believes he’ll be vindicated in the polls when enough people see the benefits.  With his approval ratings hovering under 50%, passing his health care remains a calculated risk.  If it doesn’t pass on Sunday, he’ll likely see his numbers head south.  No one likes change, especially publicly traded companies that see their profit margins going up in smoke.  Average Americans and small businesses will have to see direct savings and benefits from the new legislation.  Barack banks on the hope that a rising stock market and improving economy will eventually make the costly price tag of health reform more affordable and accepted in the near future.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.