Published in Italy's Communione e Liberazione, July 31, 2009
One of the major points of the election that brought Barack Obama to the White House was the reform of American health care system. Grace-Marie Turner, president of the Galen Institute, speaks of the key points of what should be the new American health system, highlighting the critical issues and proposing alternatives.
Questions on President Obama’s proposal of health care reform
Answers from Grace-Marie Turner, president, Galen Institute, a non-profit research organization specializing in market-based solutions to health reform
1. Which are in your opinion the most important points of President Obama’s proposal for healthcare reform?
President Obama has set a number of goals for health reform, including reducing costs and achieving universal coverage. But his proposals are, of course, being considered in the context of the larger debate over economic recovery.
Most of the estimates of the president’s health reform plan put the additional cost at $1 trillion to $1.5 trillion over 10 years. The American people are very worried about the tax increases and cuts in spending that would be required to pay for this huge plan.
In addition to the huge costs, many Americans are worried that the proposals offered by the president and congressional leaders would undermine the innovation, choice, and quality of health care that the American people value.
Here are a few of the key pillars of the president’s reform plan:
A new government health insurance plan: The president wants the government to create a new “public” health insurance program that would be offered alongside private insurance that he says will provide people with a choice of public or private health insurance. But many people fear that government would use its regulatory, pricing, and taxing authority to favor its plan and that Congress would give the government plan the power to dictate prices so it can artificially under-price its plan and drive private insurance out of this one-sided “marketplace.”
Many Americans then would be left with little or no choice, as employers would drop their current coverage and send their workers into the public plan. Research by a respected economics consulting firm, The Lewin Group, shows that as many as 120 million Americans would lose or be switched out of the private health coverage they have today. Once private plans have been driven out of the market, people fear that the government plan will not be able to sustain the quality and quantity of benefits they were promised. They fear that the government plan will begin to ration care and services, driving out innovation, competition, and patient-centered quality. As a result, much of the debate over health reform in the United States has focused on whether or not this “public plan” should be created as part of the health reform plan.
A “play-or-pay” mandate that employers must provide or pay for health coverage for their workers: Under the president’s plan, employers would be required to pay an unspecified “meaningful contribution” toward their workers’ health insurance or pay a new tax to fund the government plan. If they are not “playing” in the new system by directly providing health insurance to their employees, companies would be required to “pay” to fund the government plan.
Virtually all large employers already pay for health insurance for their workers. But small employers believe they will be hit especially hard by a new mandate to finance all or part of the health insurance premiums for their employees, directly or through new taxes. Any initial subsidies to them will quickly be overtaken by higher mandated costs. As they absorb new tax burdens they cannot control, the result will be more lost jobs and lower wages for workers.
A mandate that individuals must purchase insurance: Proposals before Congress, which have been endorsed by the president, would require everyone to purchase health insurance or face fines and other penalties. Many Americans fear that if the government establishes this “individual mandate” to purchase health insurance, it will then have to define what qualifies as acceptable insurance. All signals indicate this would be a very expensive benefits package, designed as one-size-fits-all in theory but delivered as one-size-fits-none in practice.
Many individuals will need subsidies to get coverage that otherwise would be unaffordable to them, but taxpayers will resist filling an abyss. As a result, political leaders will try to cover rising costs indirectly and invisibly – through general revenue subsidies, tax increases, deficit spending, and through escalating fees, fines, and taxes imposed on employers. And to make the mandate work, the government also must establish and enforce binding penalties for individuals who do not comply. Many people are very worried about the intrusion into their lives that this individual mandate would require.
2. Do you think this reform would be able to settle the most important problems of US health care systems?
The American people are rightly concerned that Congress is going too fast in trying to pass sweeping health reform legislation costing trillions of dollars that will impact their health care for generations to come.
They are right to be concerned because independent studies have shown that the promises President Obama and leaders in Congress are making about their legislative proposals are not supported by the facts. For example: Americans don’t believe that spending $1 trillion more on health care will lower its costs, and they are worried that the president isn’t keeping his word when he says that people will be able to keep the doctors and health coverage they have now.
In fact, the Congressional Budget Office, which has final authority over health spending analyses, testified recently that legislation before Congress would “significantly expand” health costs, increase the deficit, and drive the nation more deeply into debt. And, as reported above, as many as 120 million of the 160 million Americans who have private insruance now would lose their coverage and be moved into the new govenrment insurance program.
3. It’s clear to everyone that US health care systems is affected by some critical situations (uninsured people, high level of health care expenditure, etc.): if President Obama proposal it’s not the better solution, which are in your opinion some possible reforms that can improve the US system?
Congress and the new administration could dramatically expand access to private health insurance that protects freedom of conscience and that allows people to select policies that are in keeping with their beliefs and values. It involves three key steps:
• Providing new subsidies to individuals to purchase private health insurance of their choice. This could lead to universal access to health insurance
• Creating new markets for affordable, portable insurance
• Protecting those with pre-existing conditions so they can purchase and maintain insurance coverage.
We believe we can change what needs fixing in our health sector and preserve the freedom, innovation, and quality of American medical care that people value. A better functioning, more competitive, and transparent marketplace would cover more people and deliver the higher-value care they all are seeking.
4. Do you think this reform will be approved within 2009?
I believe that Congress will act on health reform legislation this year or early in 2010. But a great deal of resistance is growing to the sweeping reform plan endorsed by the president and many leaders in Congress. The bill that passes is more likely to be a less ambitious plan that takes careful steps toward reform instead of trying to reform one-sixth of our economy all at once.
5. Do you think the most of American citizens like this reform?
The American people want to get costs down, and they want everyone to have health insurance. But they do not want to destroy our health care system in the process. Polls show that support for health reform falls dramatically if the American people believe it will increase their taxes substantially and reduce their choices of quality health care.
Of the $2.4 trillion the United States will spend on health care this year, nearly half will be spent through public programs for the elderly, children, and the poor. These government programs pay for health care for more than 100 million Americans. As many as 160 million more Americans receive their health care through private insurance, largely provided by their employers. In addition, many people do not understand that everyone in the United States is guaranteed access to health care when they go to a hospital, and there are many, many government programs and charitable organizations providing free health care.
As many as 45 million Americans don’t have access to health insurance at any one time. That is the political issue before the American people today. They want Congress to solve this problem, but they want Congress to go carefully and get the reform plan right.
6. Do you think US can learn something from European health care system?
Americans are very interested in learning from Europeans’ experience with health reform. We are interested in your successes in doing a better job of delivering coordinated care, in preventive care, in adopting medical records, and in keeping health spending under control, for example. The challenge for Americans is figuring out how to integrate these into our more diverse health sector.
7. Please can you finally give us your synthetic point of view on the actual situation of US health care system and on the possible impact of President Obama reform proposal?
Americans value the quality of health care that is available to them, including access to the latest technologies. They want access to the newest drugs that provide the best outcomes, and they want research on new medicines and medical treatments to continue. They are very concerned that artificial government price constraints will impede innovation and restrict their access to the quality medical care they value. That’s one of the key reasons that the American people are cautious about sweeping health reform plans dominated by government. They want health reform, but they want to make sure it supports the innovation and progress in health care that they value.