Obama unveils universal healthcare plan

Democratic presidential contender Barack Obama Tuesday outlined a detailed plan in Iowa City, Iowa, to provide universal health coverage and to reduce the cost of medical care.

The Illinois senator acknowledged that reforming the vast and complex healthcare system would be difficult, but said, “We are not a country that allows major challenges to go unsolved and unaddressed while our people suffer needlessly,” according to his prepared remarks.

{mosads}In addition to promising universal coverage, Obama said his plan would save a “typical family” $2,500 a year in healthcare spending.

The proposal would be financed partially by letting tax cuts expire as scheduled in several years. In addition, Obama said that his plan would reduce spending in the healthcare system.

The campaign did not provide an estimate of the plan’s cost, but one healthcare economist said it would result in at least $50 billion in new federal spending every year.

Obama reiterated his vow that every American would have access to private or government-sponsored health benefits by the end of his first term if he were elected president.

People who currently are covered would be able to keep what they have, Obama said. “If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less,” he said.

The candidate blamed the health insurance and pharmaceutical industries for rising healthcare costs and the failure of past reform efforts.

Describing healthcare as a right, Obama said, “I believe that no amount of industry profiteering and lobbying should stand in the way of that right any longer.

“We have talked, tinkered, and let this crisis fester for decades. … [C]andidates offer up detailed healthcare plans with great fanfare and promise, only to see them crushed under the weight of Washington politics and drug and insurance industry lobbying once the campaign is over,” Obama said.

“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,” he said.

Obama’s chief rival for the Democratic nomination, Sen. Hillary Rodham Clinton (N.Y.), last week outlined a plan to reduce healthcare costs and plans to unveil her universal coverage proposal in the coming weeks. Another leading candidate, former Sen. John Edwards (D-N.C.), also has detailed his healthcare reform proposal.

As part of their proposals, all three candidates included elements such as expanding the use of information technology in healthcare, promoting preventive medicine and offering coordinated care for people with chronic diseases.

Obama, however, is the first of the three apparent frontrunners to call for the creation of a new federally administered healthcare program, which would be based on the benefits offered to government employees. Obama also would provide subsidies to help people to buy insurance and would use federal resources to provide “reinsurance” to cover catastrophic healthcare costs.

Most businesses would be required to offer coverage or pay into a fund for publicly subsidized benefits, and Obama would expand Medicaid and the State Children’s Health Insurance Program to cover more low-income people. Obama also proposed instituting new federal regulations of health insurance, including a prohibition against denying coverage because of preexisting conditions, and greater scrutiny of mergers between health insurers.

Emory University Professor Kenneth Thorpe analyzed the proposals and concluded that taxpayers would pick up a $50 billion annual tab.

According to Thorpe, the actual cost of the proposal would exceed $100 billion a year, but Obama’s campaign identified about $50 billion a year in budget offsets, including reduced payments to health plans providing benefits under the Medicare Advantage program and eliminating special payments to hospitals that treat large numbers of indigent patients.

Thorpe did not factor in new revenue from tax cuts that might be permitted to expire. That revenue, he said, could cover the remaining $50 billion a year, he said.

Obama’s plan appears to be somewhat less costly than Edwards’s, which Thorpe said would cost $100 billion to $150 billion a year. Thorpe added that Edwards did not specify any offsets. Edwards, however, has conceded that new tax revenue would likely be needed to pay for his plan.

“They’re all going to be three figures, over $100 billion,” Thorpe said of the various healthcare plans. Thorpe is analyzing numerous candidates’ proposals, as he did for presidential candidates from both parties in 2000 and 2004.

Actual federal spending under the Obama plan could be higher than his estimate, Thorpe said. “That $50 billion is really assuming that everything is really up and fully implemented,” he said, and parts of the plan would take more than five years to put into place.

One conservative economist predicted that Obama’s plan would lead to a substantial increase in federal spending on healthcare and a significantly broader federal role in the healthcare marketplace. “This has all the earmarks of a huge expansion of both federal dollars … [and] new federal rules,” a scholar at the American Enterprise Institute, Joseph Antos, said. “I would guess it would be a lot more than $100 billion,” he said.