June 28, 2009 in Business

Obama approach attracts detractors

Obama approach attracts detractors
Ledyard King Gannett

WASHINGTON – President Barack Obama has made health care reform his top legislative priority. He’s asked Congress to solve the problem, which he says bankrupts families and harms the nation’s ability to compete with other countries.

But the approach Obama favors has plenty of detractors, including Republicans and business leaders concerned it would expand government, cost too much, force people to switch doctors and ultimately hurt the quality of care.

Here’s a look at the issues framing the debate unfolding on Capitol Hill:

Q. What’s wrong with the nation’s health care system?

A. About 46 million Americans lack health insurance, because health care has become so expensive and because businesses are scaling back or eliminating insurance coverage for workers. Even people with insurance often face staggering bills that can force them into bankruptcy.

The high cost of health care is also squeezing state governments at the expense of other programs or tax relief. And businesses are spending more and more on health care, leaving less for wages and research and development projects that would help them compete globally.

Q. What solutions are being discussed?

A. President Obama wants every American to have basic health coverage. He also wants certain principles included in any bill that comes out of Congress. Those include: Shrink the growth of health care costs, guarantee patients a choice of doctors and health plans, beef up prevention and wellness programs, bar insurance companies from denying coverage based on pre-existing conditions and provide coverage when people move from one job to another.

Q. How would that be accomplished?

A. Obama wants to create a “marketplace” of government-run health insurance plans that would compete with plans offered by private insurers, pressuring them to increase their offerings and keep costs low.

Critics of the “public plan” option say it would put private insurers at a competitive disadvantage because the government, with greater resources and no need to make a profit, could undercut them by using their purchasing power to demand lower prices.

Q. How much would universal health care coverage cost?

A. Estimates range between $1 trillion and $1.2 trillion over the first decade.

Q. Who will pay for it?

A. That’s not clear. The Obama administration says about half would come from reducing Medicare and Medicaid payments to hospitals, insurers and drug companies, and from cutting subsidies to home health providers. The administration also says more savings would come from reducing unnecessary tests and treatments.

The rest might have to come from tax increases. Options include taxing the health care benefits that people get through their employers, or taxing unhealthy foods such as sodas.

“This is legislation that must and will be paid for,” Obama said Monday. “It will not add to our deficits over the next decade. We will find the money through savings and efficiencies within the health care system.”

Q. What do critics say?

A. Many don’t like the idea of giving government a bigger role in health care. Others oppose tax increases and say the quality of health care would suffer under Obama’s approach. They also say the plan would do little to end disparities in health care because wealthy Americans still could seek better treatment only they could afford.

Q. What’s the reaction from the medical community?

A. Doctors, hospitals, insurers and pharmaceutical firms generally agree reform is needed but differ on what to do. Doctors don’t oppose a public plan that wouldn’t force them to participate and would raise Medicare reimbursement rates.

Insurers are willing to compromise but don’t want a public plan.

Drug companies are willing to make concessions as well, given the potential of attracting millions more customers.

Hospitals worry about reduced payments.

Q. What’s happened so far?

A. House and Senate health committees are working on legislation that includes many of the principles Obama has requested. But committees that oversee tax policy are looking for ways to come up with the money to pay for it.

Q. Health care reform failed in 1993 under President Clinton. Will this be different?

A. Backers of health reform are confident something will get done this year, as health care costs and the number of uninsured continue to increase. They also say Obama has learned from the Clinton administration’s mistakes and is letting lawmakers work out the details of health care reform rather than trying to force a ready-made bill on them.

Q. What if nothing is done?

A. Obama and health reform advocates say that’s unacceptable. Health care costs have more than tripled since 1990. If left unchecked, they could account for about 25 percent of the gross national product by 2025.

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