What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies - because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.
I don't have a problem with this provision. I've long believed that denying someone insurance because of pre-existing conditions, or using the horrible practice of recission should be against the law.
Now, if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange - a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It's how everyone in this Congress gets affordable insurance. And it's time to give every American the same opportunity that we've given ourselves.
For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can't get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it's a good idea now, and we should embrace it.
He makes a nod to the co-op idea and to the idea that market forces should bring prices down. He includes subsidies for those who can't purchase health care and seems to back a catastrophic insurance scheme that was devised by his 2008 opponent, John McCain. Smart move there. All in all, there are things for someone like me to love.
Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I've already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear - it would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.
Despite all this, the insurance companies and their allies don't like this idea. They argue that these private companies can't fairly compete with the government. And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.
Hmmm...this I don't get. If we have consumer protections and regulation (good), and we have companies competing and bringing down prices (also good), and we have subsidies to help those who can't afford the premiums (really good), then why do we need a "public option?" It just seems like the answer to a question no one is asking.
That said, I do like that he is looking to make it be funded not by taxes, but by premiums.
Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public - and that is how we pay for this plan.
Here's what you need to know. First, I will not sign a plan that adds one dime to our deficits - either now or in the future. Period. And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for - from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.
Second, we've estimated that most of this plan can be paid for by finding savings within the existing health care system - a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn't make us healthier. That's not my judgment - it's the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.
Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money - an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long-run.
Another hmmm moment. Other than the tax on so-called "Cadillac" plans, I don't see how tackling the old monster of "waste, fraud and abuse" is going to not make this plan a budget buster.
As for his partisan dig at Republicans for leaving a big deficit? Well, it was partisan, but it was also true. Moving on...
Finally, many in this chamber - particularly on the Republican side of the aisle - have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush Administration considered authorizing demonstration projects in individual states to test these issues. It's a good idea, and I am directing my Secretary of Health and Human Services to move forward on this initiative today.
I think this is a worthwhile idea and it throws something to the GOP. Will the Republicans take it? I don't know.
All in all, it was a good speech and he did put some more flesh on the bones of his plan. My problems with it is that he still has not really given a reasonable explaination as to why we need a public option and has not really tackled how to best pay for this plan in a way that won't bust the already busted budget. He also has not taken on the idea of junking the idea of employer-provided insurance, something that doesn't work in this age of employment mobility. My guess is that killing employer provided care would mean taking on labor, one the building blocks of the Democratic coalition.
The question remains if he can get Democrats to agree on this, and if Republicans are willing to step up and work on the plan.
I've said it before, but I think we need health care reform. The question remains if Obama's plan is a plan that will work.