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Life Health > Health Insurance

The Great Healthcare Reform Debate

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President Barack Obama has set an ambitious deadline of October to achieve comprehensive health care reform, traveling to-and-fro across the nation to warn civilians and lawmakers alike that the current healthcare system could bankrupt the nation.

During a speech to the American Medical Association (AMA) in Chicago June 15, Obama told physicians that “health care reform is the single most important thing we can do for America’s long-term fiscal health. That is a fact.” Indeed, during a June 11 town hall meeting on healthcare, Obama said that the single biggest problem the U.S. has “in terms of the debt and deficit is healthcare–it’s Medicare and Medicaid.” Medicare and Medicaid costs, he said, are going up “much, much faster than inflation.” Medicare and Medicaid “are the real nightmare scenarios.”

But reforming the healthcare system won’t come cheap. The Obama Administration proposes to pay for the full cost of health reform–which is estimated at $1.2 trillion to $1.5 trillion over 10 years–by reducing Medicare and Medicaid spending and raising revenue. Published reports say that Obama wants to cut federal payments to hospitals by about $200 billion and cut $313 billion from Medicare and Medicaid over 10 years. He also is proposing a $635 billion “down payment” in tax increases and spending cuts in the healthcare system.

The “Affordable Health Choices Act,” introduced June 9 by Senator Ted Kennedy (D-Massachusetts), chairman of the Health, Education, Labor and Pensions (HELP) Committee, like Obama’s plan also allows individuals to keep their current coverage. Earlier this year, Kennedy and Senator Max Baucus (D-Montana), chairman of the Senate Finance Committee, which shares jurisdiction of health care reform with HELP, established a joint process that will lead to complementary legislation being marked-up in June and on the Senate floor by July, according to a statement from the HELP committee.

The other controversial aspect of the plan is taxation, Michaels says. “Again, how do you pay for it?” One way would be to tax employee benefits once they exceeded a certain premium level, he explains. “There is a lot of debate and controversy over the taxing of employee benefits and what that would do and who it would impact.” The other controversial aspect of the Obama plan is the “public plan benefit option; there are a number of folks who think this is the next step to a single, all payer system,” he says. “From the private insurance perspective, there’s a concern that it will disrupt what they would want to have as a level playing field, particularly if the government sets the provider reimbursement levels that are problematic to the rest of the industry. Those two pieces: the taxing of the benefits and the public plan option will require a lot of debate and discussion.”


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