In President Obama's speech to the AMA, he made firm promises that I don't think he can keep if his plan were to be enacted:
So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage - they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. . . .
If you don't like your health coverage or don't have any insurance, you will have a chance to take part in what we're calling a Health Insurance Exchange. This Exchange will allow you to one-stop shop for a health care plan, compare benefits and prices, and choose a plan that's best for you and your family - just as federal employees can do, from a postal worker to a Member of Congress. You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package. And one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest.
If this goes through, many employers will do little different than they are today.
But if the Obama plan is enacted, a substantial portion of employers will cut their health subsidies — raising their employees' share of contributions to the company plan — in order to drive some of the employees into the government exchange and the public option. Other employers may drop their plans altogether — after all, workers could buy their own coverage in the government exchange — or simply fund part of their workers' participation in the exchange.
These changes, which would be the direct results of the implementation of the Obama plan, would make it virtually impossible for Obama to keep these promises: "If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what."
Some rational employers would naturally respond to the changed incentives under the Obama plan and withdraw their health plans or change them to make them less attractive. It seems to me that, if the Obama plan passes as he describes it, many of you will NOT "be able to keep your health care plan. Period."
One additional point. Obama also promised to end restrictions on coverage for preexisting conditions:
That is why we need to end the practice of denying coverage on the basis of preexisting conditions. The days of cherry-picking who to cover and who to deny - those days are over.
Note that the reason for a preexisting conditions clause is in part to avoid cherry-picking by the insured. Obama did not give details, but a simple abolition of such restrictions would lead many rational people of limited means to avoid buying insurance until they got sick. Forego insurance and then enter the government-sponsored exchange to buy coverage when they face major costs. That, of course, would affect the pricing and cost of coverage for nearly everyone else in the system.
For a guy dedicated to change, President Obama seems to have a fairly static idea of how people react to reforms.
UPDATE: The Congressional Budget Office has just released an analysis of the Senate Bill that explicitly assumes that everyone will be required to have health insurance coverage and that those who can afford to pay but don't will be charged a penalty. If so, that pretty much eliminates the preexisting illness issue for basic coverage, though it remains for those who switch plans to get better coverage when they need it (e.g., dental care).
2D UPDATE: On closer analysis, the penalty for not buying insurance would be only $100 a person per year and would be waived for those who met income standards. Thus, the strategy of waiting until sick to buy coverage would still be highly cost-effective for many Americans of modest means. The prexisting conditions problem thus remains as a serious one.
The CBO study projects that by 2014 14 million fewer workers will be covered by employer health plans under the proposed changes than under existing law (thus seemingly undercutting Obama's promise). More than offsetting this loss of coverage, 38 million people will be covered by the exchanges, leading to 36 million people being still uninsured in 2014 (and 37 million uninsured in 2019). The 10-year cost of just part of the bill is projected to be $1 trillion, though that figure doesn't include many of the major costs (and some of the revenue). For example, the public health care option in the exchanges is not priced.
Related Posts (on one page):
- White House says Obama Health Care Promises Should Not Be Taken Literally.
- Can Obama Keep His Most Emphatic Promises on Health Care?