Election 2008 | Presidential Candidate Sen. Obama Proposes Plan to Cover Uninsured, Improve Premium Affordability
[May 30, 2007]

Presidential candidate and Sen. Barack Obama (D-Ill.) on Tuesday in Iowa City, Iowa, announced a proposal that would expand health insurance to almost all U.S. residents and reduce premium costs, the New York Times reports (Toner/Healy, New York Times, 5/30). The proposal would require health insurance for children but not adults (McCormick/Dorning, Chicago Tribune, 5/30).

Under the proposal, employers would have to offer health insurance or pay a percentage of their payrolls into a federal fund to provide coverage. The proposal would exempt the smallest employers from the requirement. The proposal would establish a public health plan for residents who cannot obtain health insurance through their employers or current public programs such as Medicaid and SCHIP (New York Times, 5/30). The proposal would expand Medicaid and SCHIP to cover more low-income residents (Young, The Hill, 5/30).

In addition, the proposal would establish a National Health Insurance Exchange, a regulated market of private health plans in which the public plan would compete (New York Times, 5/30). Residents who cannot afford health insurance would pay for coverage on a sliding scale based on their annual incomes, and health insurers could not deny coverage to residents with pre-existing medical conditions. The proposal would include funds to improve technology in the health care industry through measures such as the implementation of an electronic health record system.

The proposal also would establish a reinsurance pool for catastrophic conditions and would call for a focus on preventive care (Kaiser Daily Health Policy Report, 5/29). In addition, the proposal would increase federal regulations on mergers between health insurers (The Hill, 5/30). Obama said that the proposal would save the average family as much as $2,500 annually on health insurance costs (New York Times, 5/30).

Cost Issues
Obama did not discuss the cost of the proposal. However, a memo written by three outside experts and distributed by the Obama campaign said that the proposal would cost an estimated $50 billion to $65 billion annually when fully implemented (Glover, AP/San Francisco Chronicle, 5/29). The estimate includes as much as $200 billion or more in annual savings that the proposal would provide through increased efficiency, improved care for patients with chronic illnesses and the elimination of unnecessary medical tests and procedures (Alonso-Zaldivar/Hook, Los Angeles Times, 5/30).

The memo said that Obama could allow tax cuts on dividends and capital gains and for individuals with annual incomes of more than $250,000 to expire in 2010 to cover a large part of the cost of the proposal. Obama also could increase taxes on inheritances valued at more than $7 million to help cover the cost of the proposal, according to the memo (AP/San Francisco Chronicle, 5/29).

Comments
Obama said, "We are not a country that allows major challenges to go unsolved and unaddressed while our people suffer needlessly," adding, "It's time to bring together businesses, the medical community and members of both parties around a comprehensive solution to this crisis, and it's time to let the drug and insurance industries know that while they'll get a seat at the table, they don't get to buy every chair" (The Hill, 5/30). "We have reached a point in this country where the rising cost of health care has put too many families and businesses on a collision course with financial ruin," Obama said, adding, "Democrats and Republicans, small-business owners and CEOs have all come to agree (it) is not sustainable or acceptable any longer" (Los Angeles Times, 5/30).

Robert Blendon, a professor of health policy at the Harvard School of Public Health, said, "The senator came across with a large plan, but in Democratic presidential terms it's a centrist plan," adding, "He's talking about something that takes the existing system and makes it work."

Drew Altman, president and CEO of the Kaiser Family Foundation, said, "It's a big, comprehensive plan that puts the financing on the table. That's always the big litmus test" (Chicago Tribune, 5/30).

Concerns
Some analysts raised concerns about the cost of the proposal. Joseph Antos, a scholar at the American Enterprise Institute, said, "This has all the earmarks of a huge expansion of both federal dollars ... (and) new federal rules," adding, "I would guess it would be a lot more than $100 billion" (The Hill, 5/30). John Sheils, senior vice president of the Lewin Group, added, "The numbers don't seem to work very well. I think (the savings) are just dramatically overstated" (Los Angeles Times, 5/30).

In addition, "there is some dispute over whether his plan would provide universal care -- it's aimed at lowering costs so all Americans can afford insurance but does not guarantee everyone would buy it," the AP/Chronicle reports. Ron Pollack, executive director of Families USA, said, "It's not totally clear that it would result in universal coverage" (AP/San Francisco Chronicle, 5/29). Neera Tanden, policy director for presidential candidate and Sen. Hillary Rodham Clinton (D-N.Y.), said, "Senator Clinton believes that in addition to making health care more accessible, we have to achieve true universal health care so that every American has health care coverage."

Mark Kornblau, a spokesperson for presidential candidate and former Sen. John Edwards (D-N.C.) said, "Any plan that does not cover all Americans is simply inadequate" (New York Times, 5/30). The Obama campaign said that the proposal would provide health insurance for at least 98% of residents (Los Angeles Times, 5/30).

A webcast of the event at which Obama announced his health care proposal is available online at kaisernetwork.org.

Related Coverage
Two newspapers on Wednesday published articles related to the role of health care in the 2008 presidential election. Summaries appear below.

• USA Today: USA Today examined how the proposal announced by Obama "underscores the central role the issue is playing in the race for the Democratic nomination." According to USA Today, Republican presidential candidates have not focused on health care, "reflecting the priorities of Republican voters" (Lawrence, USA Today, 5/30).
  
  
• Wall Street Journal: The Journal examined how Obama has become the most recent addition to a "growing list of Democratic presidential candidates calling for universal, cheaper coverage." According to the Journal, the trend "reflects rising and inflation-topping out-of-pocket costs for health care and insurance premiums, copayments and deductibles," with employers "increasingly ... seeking a government-imposed solution, saying employee health costs put them at a disadvantage with foreign competitors." However, "Republican candidates nonetheless will likely try to blast Democrats for using universal care to boost the size of government and to raise taxes," although "they have yet to engage," the Journal reports. In addition, according to the Journal, "no one is talking about an overhaul as ambitious as the 1993-94 Clinton plan -- not even its architect, Mr. Clinton's wife" (Calmes, Wall Street Journal, 5/30).

Editorial, Opinion Pieces
Summaries of an editorial and two opinion pieces that address the proposal announced by Obama appear below.

• Boston Globe: The proposal "comes close" but would not provide health insurance for all U.S. residents, although Obama "implies it does," according to a Globe editorial. According to the editorial, Obama "faces pressure to supplement his flashy aura with substantial policy ideas," but currently "other candidates have more realistic health proposals." The editorial concludes that, "if the goal is universal coverage during the term of the next president," presidential candidate and former Sen. John Edwards (D-N.C.) "has offered the most comprehensive, politically realistic proposal" (Boston Globe, 5/30).
  
  
• Lynn Sweet, Chicago Sun-Times: The proposal promises "that everyone will be able to buy affordable health insurance and that people now covered will pay less," columnist Sweet writes in a Sun-Times opinion piece. However, the proposal would mandate health insurance only for children, not adults, "opening the question of whether his plan will lead to Obama keeping his first pledge, to sign a universal health care law by the end of his first term," Sweet writes. She adds that the proposal would reduce health insurance costs for employers "because the federal government would pay for the most costly cases," individuals with chronic illnesses (Sweet, Chicago Sun-Times, 5/30).
  
  
• Ronald Brownstein, Los Angeles Times: The proposal, "though vague on many details," will "sharpen" the debate about who should pay for health insurance "in illuminating ways," columnist Brownstein writes in a Times opinion piece. Brownstein writes, "The best chance for reaching (or even nearing) universal health care coverage is a system of shared responsibility that requires government, individuals and business to all contribute." Proposals "percolating" among Obama and other Democratic presidential candidates "move in that direction," he writes. However, "unless big employers also finally act on their stake in reform, health care for all is likely to remain out of reach -- at great cost not only to the national interest but to corporate America's own bottom line," Brownstein concludes (Brownstein, Los Angeles Times, 5/30).

Broadcast Coverage
Three broadcast programs on Tuesday reported on the role of health care in the 2008 presidential election. Summaries appear below.

• American Public Media's "Marketplace": The segment includes a discussion with Uwe Reinhardt, a professor of economics at Princeton University (Ryssdal, "Marketplace," American Public Media, 5/29). Audio and a transcript of the segment are available online.
  
  
• NPR's "All Things Considered": The segment includes comments from Obama; Clinton; Blendon; and Drew Altman (Rovner, "All Things Considered," NPR, 5/29). Audio and a partial transcript of the segment are available online.
  
  
• PBS' "NewsHour With Jim Lehrer": The segment includes comments from Obama, Clinton and Edwards. The program on Tuesday also included a discussion with Blendon and "NewsHour" health correspondent Susan Dentzer about health care and the presidential election ("NewsHour with Jim Lehrer," PBS, 5/29). Audio of the segment is available online. Video and a transcript of the segment will be available Wednesday afternoon.