SALES

Obama's Health Plan: Coverage, but at What Price?

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WHAT THE EXPERTS SAY ABOUT THE OBAMA PLAN:

While the Tax Policy Center calls the President-elect's plans for insurance reform "highly progressive," it also concludes that it will be very expensive, and won't come near to providing universal coverage -- though it will come close.

In what it calls "a very preliminary analysis," the Tax Policy Center finds that Obama's plan would cost $1.6 trillion over 10 years, but would insure an additional 34 million people in 2018. However, another 34 million people will still lack coverage. (The Center projects that without reform the ranks of the uninsured will rise to 67 million by 2018.)

The Tax Policy Center projects that this "modest" increase will mask a large shift in the way people buy insurance. "Many small- and medium-sized employers would choose to drop coverage if their employees could obtain substantial tax credits for nongroup coverage," according to the center. "Also, the decline over time in value of the credit relative to premiums would reduce employers' incentives to offer insurance."

The Tax Policy Center calculated that if the growth in premium cost were to slow by 1 percent a year, the cost of the plans would fall to $1.4 trillion for Obama. But the center did not attempt to estimate the effect of Obama's health initiatives on the cost of care, and Jonathan Oberlander, a health-care policy professor at the University of North Carolina at Chapel Hill, doubts that the initiatives offered by the candidates will do much either to lower costs or improve care, at the least in the beginning. "These things are all worth doing," he says. "But I don't think they'll save much money in a president's first term, and only modest amounts in a second term -- if they save anything at all." On the question of efficacy, "all of these things are really unproven. Electronic medical records might improve health, but it depends on how it's implemented. Disease management has a mixed record. It's no magic bullet. It's aspirational."

WHAT THE EXPERTS SAY ABOUT THE OBAMA PLAN:

While the Tax Policy Center calls the President-elect's plans for insurance reform "highly progressive," it also concludes that it will be very expensive, and won't come near to providing universal coverage -- though it will come close.

In what it calls "a very preliminary analysis," the Tax Policy Center finds that Obama's plan would cost $1.6 trillion over 10 years, but would insure an additional 34 million people in 2018. However, another 34 million people will still lack coverage. (The Center projects that without reform the ranks of the uninsured will rise to 67 million by 2018.)

The Tax Policy Center projects that this "modest" increase will mask a large shift in the way people buy insurance. "Many small- and medium-sized employers would choose to drop coverage if their employees could obtain substantial tax credits for nongroup coverage," according to the center. "Also, the decline over time in value of the credit relative to premiums would reduce employers' incentives to offer insurance."

The Tax Policy Center calculated that if the growth in premium cost were to slow by 1 percent a year, the cost of the plans would fall to $1.4 trillion for Obama. But the center did not attempt to estimate the effect of Obama's health initiatives on the cost of care, and Jonathan Oberlander, a health-care policy professor at the University of North Carolina at Chapel Hill, doubts that the initiatives offered by the candidates will do much either to lower costs or improve care, at the least in the beginning. "These things are all worth doing," he says. "But I don't think they'll save much money in a president's first term, and only modest amounts in a second term -- if they save anything at all." On the question of efficacy, "all of these things are really unproven. Electronic medical records might improve health, but it depends on how it's implemented. Disease management has a mixed record. It's no magic bullet. It's aspirational."

Last updated: Nov 18, 2008




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