Obama's Bottom Line on Healthcare Reform?

Obama laid out three goals of his plan for reform:

1. "It will provide more security and stability to those who have health insurance."
2. "It will provide insurance to those who don't."
3. "And it will slow the growth of health care costs for our families, our businesses, and our government."

The first two goals sound good. The final one is worrisome. As Obama noted, we already pay 1.5 times more for healthcare than any other nation. His plan will not reduce those costs.Rather, it will only slow the growth of costs. This is likely a result of the deals made with big pharma and the insurance companies.

He then goes into more detail of achieving those goals.

"First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have."

While this likely made some folks heave a sigh of relief, it does not eliminate the issue that has come up with some trial runs of reform plans that those who already have insurance CAN"T change to the "public option." This concern is reinforced in the speech when Obama stated (emphasis added):

"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."

Obama's plan, like several of the Congressional plans, call for the creation of an "insurance exchange." The public option would be one choice within the exchange. However, insurance company participation inclusion in the exchange is voluntary. Namely, that those insurance companies wanting to participate have to abide by certain guidelines. Now this is where things get a bit confusing. Obama identifies his guidelines thusly:

"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 ..."

This sounds great, but does it apply to ALL health insurance companies, or only to those who choose to participate in the exchange?

For me, this is the crux of the lack of clarity and the mixed messages. On one hand there is purportedly changes to the existing health insurance system that removes some of the profit-making policies of companies (preexisting conditions, recission, cancellation, premium caps, etc.). On the other hand, these controls only seem to pertain to those companies who participate in the exchange. If at the same time, only those currently without insurance can participate in the exchange, and those with private or company government plans cannot, then what has actually been created - and how can it effectively reduce costs while increasing access and quality? In short, the effectiveness of an exchange and the public option seem artificially hamstrung from the beginning.

Further, what sounded like "line in the sand" support for a public option may not have been. First, Obama cautioned (again) that the public option was only one possible mechanism. He reiterated this later by saying he had an "open door" policy for ideas - inviting Republican participation in the crafting of reform.

"To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end - and we should remain open to other ideas that accomplish our ultimate goal."

Another requirement is that universal coverage is to be accomplished by mandating everyone (outside of those already in VA, Medicare and Medicaid) to acquire health insurance. While, somehow a need test would be applied to this, people would be required to purchase insurance.

"That's why under my plan, individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements."

This would appear to be a big win for private insurance companies (as auto insurance is). If only those without insurance are eligible for the public option (which may not exist), and the restrictions on profit mechanisms mentioned above apply only to those companies that choose to participate in the exchange, then folks would be mandated to get coverage that has exactly the same problems of current insurance - for which they might be eligible for some government subsidation. If that scenario plays out, it would be a huge win for the insurance companies.

Obama's speech seemed to be one of certainty and laying down the firm guidelines of his plan for healthcare reform. In reality, it would seem to be much less firm than it sounds. It is my hope that over the next few days the types of issues I have raised here will be clarified by the Obama administration. Further, that the clarification reinforces the clear guidelines before they were erased by seeming inconsistencies and messages of "open for discussion."