Barack Obama: Health Care Nation?
As Barack Obama takes his place in the oval office, he will be working with the political mandate of an electoral landslide to work towards implementing the pragmatic progressive agenda that he set forth in his campaign. His bold push to expand health care coverage will be among the most scrutinized projects he embarks upon. Throughout the campaign and in the debates he consistently touted his plan to create a public health insurance plan available to every American, creating a large insurance pool that would help keep prices low, in turn making it more appealing to uninsured Americans. He also claimed that the plan would pay for itself by reducing the need for inefficient emergency care.
But are his policy goals realistic? And perhaps more importantly, would America be healthier if more Americans had health insurance (or better access to health care)?
Perhaps the most important part of Obama’s plan is to extend public health insurance to anyone in the country who chooses to take part. The goal here is twofold. First, unlike the private individual insurance market, which often rejects people simply because they deem them too expensive to cover, public coverage would not reject any applicants. In addition, the public plan would accept people with pre-existing conditions, a problem that many Americans face when trying to find insurance in the private market.
The second goal is to lower everyone’s health care costs. The basic principle behind insurance is that the more people that are in the pool, the less it costs for everyone. Therefore, by creating a large public pool, costs will stay low.
From the Obama Campaign website’s Healthcare FAQ (pdf):
“Q. Obama says his plan will save $2,500 annually for my family. How?
A. Through a combination of developing efficiencies in the system, expanding coverage to all Americans, and picking up the cost of some high-cost cases. Specifically:
…Ensuring every American has health coverage, which will reduce spending on the “uncompensated” care of uninsured people who end up in emergency rooms and whose care is picked up by institutions and then passed through higher charges to insured individuals.”
How will Obama do what he needs to do to confront the rising costs of health care? The number one reason health care costs are rising is because of new and increasingly expensive technologies that detect disease earlier, offer more effective treatment, and reduce recovery time. As technology development continues at its current pace, it is highly unlikely that a large pool of members in a not-for-profit public health plan will actually be able to stop prices from rising.
Obama’s second claim was that this plan would pay for itself by reducing expensive and inefficient emergency care. But this is far from true. As Katherine Baicker and Amitabh Chandra put it in their highly informative “Myths and Misconceptions About U.S. Insurance”:
“This is a common and deceptively appealing argument for expanding insurance coverage: we could spend less and get more, and who could be against that? But as with most prescriptions that promise something for nothing, this misconception finds little empirical support. Yes, emergency room (ER) care for the uninsured is inefficient and might have been avoided through more diligent preventive care and disease management. Diabetes treatment is a good example; it is much cheaper to manage diabetes well than to wait for a hospitalization that requires a leg amputation. Having health insurance may lower spending on ER visits and other publicly provided care used by the uninsured through better prevention and medical management. But empirical research also demonstrates that insured people use more care (and have better health outcomes) than uninsured people do—so universal insurance is likely to increase, not reduce, overall health spending.”
There are other issues to consider as well. Studies have shown that healthiness is often more closely associated with variables like stress, diet, anxiety and status than quality of health care. There are many reasons to increase health insurance coverage—many uninsured Americans face bankruptcy when faced with health costs for accidents or diseases. But having insurance does not, in and of itself, make America healthier. This is not a politically popular notion, but if Obama truly wants to make headway with these issues, he will have to grapple with the larger players involved in public health.
It is too early yet to condemn Obama’s health care plan. But certainly, there are questions to be asked and answered as progressives come to power and attempt to reform America’s health care system. Health care reform is notoriously difficult, and many political battles will be fought as Obama and Congressional Democrats attempt to push their agendas. This is why asking and answering the tough questions is important now, so that when it comes time to fight these battles, progressives will have the most robust policy with true public support.