Tuesday, March 23, 2010

Obama's Health Care Three Years Later

March 23, 2010, 1:00 p.m.; (as updated with links following the President's Iowa City appearance, March 25, 2010), March 26, 2010, 5:30 a.m.

What We Got
(brought to you by FromDC2Iowa.blogspot.com*)

As it happened, I was present on May 29, 2007, when then-candidate Obama came to Iowa City, and the University of Iowa Hospital and Clinics, to present his ideas about health care. (Click here for photos of that event -- and click here for pictures of the March 25, 2010 event.)

Whether I will also attend his follow-up presentation Thursday, March 25, in the UI Field House is in the lap of the White House Web page gods -- the source of tickets for those the computer selects. [As it turned out I was able to attend thanks to "the kindness of strangers" -- actually not strangers, but very good and thougtful friends.]

The picture immediately above is from the White House Web page. For the White House version of the text of the President's remarks on March 25, and an excellent quality video of him and crowd shots, if you'd like to re-live that event, here's the link.

As I look back on what I wrote at the time (Nicholas Johnson, "UI Held Hostage Day 493 - Sen. Obama's Heathcare; Sen. Obama Unveils Health Plan," May 29, 2007, and Nicholas Johnson, "UI Held Hostage Day 494 - Healthcare, Search, Downtown; Senator Obama on Healthcare," May 30, 2007) it's remarkable how much of what we ended up with Sunday night was spelled out three years ago.

MoveOn.org, an activist organization that worked for health care reform, sent me an email with a useful summary -- with supporting footnotes -- of what's in this bill (signed into law by President Obama today):


1. Once reform is fully implemented, over 95% of Americans will have health insurance coverage, including 32 million who are currently uninsured.2

2. Health insurance companies will no longer be allowed to deny people coverage because of preexisting conditions—or to drop coverage when people become sick.3

3. Just like members of Congress, individuals and small businesses who can't afford to purchase insurance on their own will be able to pool together and choose from a variety of competing plans with lower premiums.4

4. Reform will cut the federal budget deficit by $138 billion over the next ten years, and a whopping $1.2 trillion in the following ten years.5

5. Health care will be more affordable for families and small businesses thanks to new tax credits, subsidies, and other assistance—paid for largely by taxing insurance companies, drug companies, and the very wealthiest Americans.6

6. Seniors on Medicare will pay less for their prescription drugs because the legislation closes the "donut hole" gap in existing coverage.7

7. By reducing health care costs for employers, reform will create or save more than 2.5 million jobs over the next decade.8

8. Medicaid will be expanded to offer health insurance coverage to an additional 16 million low-income people.9

9. Instead of losing coverage after they leave home or graduate from college, young adults will be able to remain on their families' insurance plans until age 26.10

10. Community health centers would receive an additional $11 billion, doubling the number of patients who can be treated regardless of their insurance or ability to pay.11


1. Final vote results on motion to concur in Senate amendments to the Patient Protection and Affordable Care Act, Clerk of the U.S. House of Representatives, March 21, 2010

2, 3, 4, 5, 6, 7, 11. "Affordable Health Care for America: Summary," House Energy and Commerce Committee, March 18, 2010

4. "Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System," U.S. Department of Health and Human Services, Accessed March 22, 2010

5. "Affordable Health Care for America: Health Insurance Reform at a Glance: Revenue Provisions," House Energy and Commerce Committee, March 18, 2010

8. "New Jobs Through Better Health Care," Center for American Progress, January 8, 2010

9, 10. "Proposed Changes in the Final Health Care Bill," The New York Times, March 22, 2010

11. "Affordable Health Care for America: Health Insurance Reform at a Glance: Addressing Health and Health Care Disparities," House Energy and Commerce Committee, March 20, 2010


Meanwhile, here's an excerpt for comparison, from my blog entry, linked above, of May 30, 2007:

If you're hoping for "universal, single-payer" health care (as I lean toward . . . ) -- as is provided to the citizens of virtually every other industrialized nation -- this ain't it. But until we get meaningful public financing of campaigns, I'm not sure that's in the cards from this "best Congress that money can buy." So maybe this is a much better plan in its details than the "universal, single-payer" critics give it credit for. Maybe it's the most that a pragmatic, politically savvy health care policy wonk can honestly and realistically put forward.

Those who oppose any changes in the health care system will oppose this plan, just as they would oppose any other. But those who have a major economic stake in the present system, have disproportionate political power in shaping future changes, and are aware that some changes are simply going to have to come, may well get on board, figuring that this is the least-worst of the possible scenarios.
(1) The super rich don't need (and many don't even want) President Bush's tax cuts for the rich. That's a realistic source of funding for Senator Obama to look to for the modest public investment in healthcare he envisions -- but repealing those cuts will certainly not be a "slam dunk" for any president. (And, even if successful, we're still left with the roughly $40 trillion in unfunded entitlement obligations scheduled to become due and payable within the next 20 years or so.)

(2) His program will continue to be administered by the plethora of insurance companies we have now, which means doctors and hospitals will still be dealing with a variety of forms and reimbursement procedures, and we'll continue to pay these companies' executives health care administrative costs many times those of other countries. That should take at least much of the sting out of what would otherwise have been the overpowering objections of this politically influential group.

(3) The system will still be (in terms of numbers of persons covered) an employer-based health care system. So it's not disruptive in that regard. Why should employers support a proposal that continues to leave much of the burden on them? Because he lightens their burden. He points out that 80% of the cost of health care goes to benefit 20% of the people. And he proposes shifting much of that 80% to the federal government. He represents that this will result in lower premiums for the insured. Well, perhaps. But we've all seen lots of instances when that didn't occur -- as when the price of oil declines and the prices of gasoline goes up. (a) What provisions are there to insure that this element of his program won't simply further enrich insurance companies and employers, rather than reduce premiums for employees? (b) And, given the rate of inflation in health care costs, how many years will it be -- even under the best case scenario, with all the cost-shift benefits going to employees -- before the premiums are back up to what they are now?

(4) As for the currently uninsured, or under-insured, or only-sometimes-insured, Senator Obama proposes that the federal government "subsidize" the cost of premiums for those unable to pay market rates. But what will be the practical effect, and benefit, for, say, an unemployed, homeless, single, high school dropout, male in his mid-thirties? I mean that as a real question, not an assertion.

Look, I don't claim any more expertise on this subject (economics in general, and the economics of health care in particular . . . than I do for any of the other subjects I write about. Moreover -- as also with those other subjects -- I quite regularly change my position once someone bothers to explain to me the errors in my thinking. So this is not, to borrow from the TV show, "my final answer." But it's what I'm thinking this morning.
That was three years ago -- May 30, 2007.

This is March 23, 2010. And unfortunately, it's still the case that "If you're hoping for 'universal, single-payer' health care . . . -- as is provided to the citizens of virtually every other industrialized nation -- this ain't it."

Nonetheless, it's still a landmark achievement for our President and congressional Democrats given current conditions in Washington and (in the absence of campaign finance reform) the ever-increasing influence of big money in the legislative process.

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself.
-- Nicholas Johnson
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1 comment:

TY said...

Sheesh, Nick, do you really believe that HCR will reduce the deficit over 10 years? I know that's what the CBO projects, but the CBO is forced to assume that Congress will do what it claims it will do. Yet, if Congress doesn't have the courage to impose the tax on Cadillac health plans *now*, why would we ever think it will discover a spine in 2018??? And over the first 10 years, we're getting taxed all 10 years, but the major costly benefits don't kick in until 2014. Does that mean that HCR remains deficit-reducing only if it provides 6 years of benefits for every 10 years of taxes?

It would be interesting to apply Sarbanes-Oxley rules/requirements to the CBO to see what the SEC would think of that analysis.