U.S. President Barack Obama made a major address to Congress in early September 2009, in which he outlined his plan to fix the country’s US$ 2.5 trillion healthcare system. The healthcare reform plan must pass by the two chambers, the House of Representatives and Senate, before Obama can sign it into law. The current cost estimate for healthcare reform is US$ 1 trillion over the next 10 years by no means a meager price tag; and one which has borne the brunt of the Republican ire. On Saturday night (7th November 2009), after a 12-hour debate with 220-215 vote, the House of Representatives narrowly passed a healthcare reform bill, which clears the way for the Senate to begin to consider the passage of the legislation. The House vote was a vital victory for Obama, who staked much of his political capital on the healthcare battle. With the vote now going to the Senate, the fate of healthcare reform and the Obama’s presidency hangs in the balance.
Senate Democrats will require 60 out of 100 votes to end the debate and bring the legislation to the final vote. Currently, there are a number of moderate Democratic senators whom still have reservations. If the Senate does pass the bill it would need to be reconciled with the House version by a panel of lawmakers, from both chambers, before legislation is presented for final approval. On the other hand, if the Senate does not pass the bill, the House and Senate would have to reconcile their differences and agree on one bill to be passed again, and sent to Obama for his signature.
The President and his officials have repeatedly said that the healthcare bill would be signed into law by the end of 2009. It is their target to get health insurance reform done in 2009, and they are determined to achieve that. The White House has pushed hard to get a bill passed this year; the primary aim was always to establish momentum and call a vote prior to the beginning of the Congressional campaign season, because passing major legislation in a Congressional election year is considered more difficult. The calendar is not looking friendly, it is just less than one month away till end of 2009, and the self-imposed deadline by President Obama means that it will be tough to get approval from the Senate to pass the healthcare reform bill, yet there is still time to see whether the President can adhere to the target.
Healthcare reform involves a permanent change to the entire healthcare system in the USA and it has a, potentially, far greater and longer effect on the US nation than any single other piece of legislation. As mentioned in our 7th August, 2009 post, we have outlined the goals of the Obama administration reforms. In this month’s update, we would like to review some concerns and reasons not to support the healthcare reform bills.
Before we review the concerns or reasons not to support healthcare reform, let us look at why healthcare reform is being considered. Unlike in other countries, under the current healthcare system in the USA, an individual will never be refused admission to a hospital or left on the street by an ambulance just because one cannot produce a credit card or proof of insurance. It is however essential that you are insured for medical expenses because medical costs are highly inflated in the USA. There are currently more than 46 million Americans without health insurance of any kind, approximately another 25 million people are underinsured, meaning their coverage is inadequate for their needs. With the recent economic downturn, there are additional hundreds of thousands of people sent into the category of uninsured as unemployment rates increase. This comes down to the basic economic principle of supply and demand. Another contributing factor to the underinsured and uninsured is that medical costs continue to rise. It has been reported that US$2.2 trillion was spent on US healthcare in 2007, accounting for 16% of GDP, about twice the average of other OECD countries. The rising healthcare costs in turn means that more and more people in America are unable to afford healthcare and rising costs also mean that the Government is spending more and more on Medicare and Medicaid.
There are ongoing debates as to whether to approve the healthcare reform bills. While Americans are concerned about what will happen to their own healthcare if reform passes, they are also concerned about what will happen if reform does not pass. Some of the concerns and reasons not to support the healthcare reform bills are outlined below.
It seems that it is the wrong time for the United States to pursue healthcare reform right now. After all, the US has been in the middle of two wars and a recession. President Obama mentioned that the cost of the healthcare system remaining in its present state is much higher than the cost of healthcare reform. The United States spends more than US$ 2 trillion on healthcare each year, in which about US$700 billion is spent on unnecessary treatments. President Obama has promised that he will only sign a healthcare reform bill that is deficit neutral, meaning that it will not incur one extra cent to the deficit in 10 years. The current estimate is that if healthcare reform passes, it will costs US$1 trillion over the next 10 years. President Obama believes that it can be funded with the removal of waste in the system, in which, some of these savings may not be recognized by the Congressional Budget Office. A few key financing options that are currently on the table include squeezing savings out of Medicare and Medicaid, Taxation on the wealthy, Taxation on employee health insurance benefits, limit the itemized deductions of the wealthy, impose or raise taxes on sugary soft drinks and alcohol, penalize employers who do not offer health insurance and lower the insurance subsidy threshold. Types of funding is however yet to be finalized. If funding is not considered properly, it will add to the burden of an already unstable system.
The fundamental question on healthcare reform is that who will pay for all of these government healthcare costs? The answer is of course the taxpayers across America. The difference between the healthcare system that is in place now and President Obama’s healthcare reform is that under the current system, citizens have a choice to buy insurance. Should this healthcare reform bill pass, an individual will no longer have that option. It is compulsory for everyone to pay for healthcare whether you like it or not. The Government will be in charge of the citizen’s healthcare, the taxation to support it as well as the co-payments associated.
For those people who are struggling to receive healthcare under the current system, it might be great news to them with the passage of the healthcare reform bill in the House. Any individual will be able to enter hospitals in any city in the US and receive healthcare despite whether or not they are covered by insurance. However, questions will likely arise with the Government controlling healthcare; will treatments be provided to all people on an equal basis? Currently in US, many people with disabilities may already be enrolled on the Social Security Disability Income (SSDI) program and obtain cash benefits to support their living, with the passage of the healthcare reform bill, will these people receive the same medical treatment as any other US citizens? Moreover, the current Government is already running many programs like SSDI, Medicare and Medicaid, even more recently,the Cash-for-Clunkers program (a tiny program compared to the budget projected for healthcare), which the United States Government is struggling with running adequately. There are funding and management issues with these few Government programs. With the passage of the healthcare reform bill, the competency of Government Management is surely in question. Will the same Government be able to proficiently run and manage the national healthcare program as well as all the other programs that are already in place?
If healthcare is universal for all Americans, it is likely that there will be a long waiting lists for people to obtain standard healthcare. Individuals who do not have healthcare coverage would however be happy, since there is at least a line that they could wait on. For these people, a waiting line is much better than the alternative of having no medical care. The Government will need to address the issue on resources such as the number of primary care providers available in the US to manage the number of new patients who will be able to access healthcare once the healthcare reform is passed. If there is a shortage of healthcare providers to provide adequate care to patients, then the poor and elderly will likely be put last in line to receive treatment, which brings back to the point stated above on whether treatment will be given to all citizens equally.
Previous American Presidents have tried to bring US into the community of nations that provide healthcare to all citizens. They have attempted seven times but encountered a number of roadblocks and the efforts all failed. Whether the healthcare reform will follow the same path as previous administrations have tried or there will be changes in the whole American healthcare system, it is yet to be seen. After all, rationing a nation’s healthcare system involves plenty of changes. With the pass of the healthcare reform by the House of Representatives, this already signified a historical moment in the history of the nation. Now, we shall wait and see what the Senate brings in and whether Obama can be the last President that can take up the cause on healthcare reform.
Whether the healthcare reform is to the better or worse of the USA, in the midst of all changes, if you do not want to be one of the “victims”, it is best to put in place a private healthcare insurance plan in order to give full protection to yourself and your family.