Five Health Leaders Respond to Obama Proposal

Cheryl Clark, for HealthLeaders Media , February 23, 2010

Four days before his health reform summit, President Obama released an 11-page sketch of the most important provisions he hopes to retain.

HealthLeaders Media asked several health officials representing a variety of interests to express their views of his $950 billion plan. Here's what they had to say.

Steve Wojcik
Vice President Public Policy
National Business Group on Health

"Unfortunately the President's proposal, while not fully detailed, appears to have few if any provisions that would deal with employers' number one healthcare issue—controlling costs to keep coverage affordable.

"At the same time, the plan lists a number of taxes that will raise costs for employers and people with employer-sponsored coverage.

"The proposal makes no mention of the Medicare payment and delivery changes, promotion of primary care, use of cost effectiveness research to determine the value of medical technologies and interventions.

"Each of these, if widely adopted in Medicare, would also have a spillover effect in the private sector and improve the efficiency and effectiveness of care.

"On the contrary, the section labeled 'policies to contain costs' lists a host of taxes that will directly or indirectly fall on employer plans and the people covered by them. They include the so-called 'Cadillac' tax (modified by a deal with unions and some further modifications of the President's own) that would tax health benefits valued above $10,200 for individuals and $27,500 for families beginning in 2018 . . .

"Finally, the plan also includes the Senate employer free rider provision.

"Employer plans deemed not comprehensive enough to meet government standards would pay $3,000 for each employee qualifying for federal tax credits for exchange coverage and $2,000 for all their employees if they do not offer any coverage at all. At a time when we are struggling economically, we should not be imposing more costs on companies that will jeopardize jobs and raise unemployment."

J. James Rohack MD
American Medical Association

"The proposal from President Obama helps put health coverage for all Americans and insurance reform back on the front-burner where they belong.

"It's unfortunate that this proposal does not address Medicare physician payment as a 21%Medicare cut to physicians that will cripple healthcare choices for seniors and military families begins in one week.

"The proposal builds on the Senate-passed bill, and AMA continues to have some underlying concerns, such as defining the scope and authority of the Independent Payment Advisory Board."

Karen Ignagni
America's Health Insurance Plans (AHIP)

"To suggest that cost containment can be achieved by singling out health plans ignores the very inconvenient truth that premium increases reflect increases in the underlying cost of medical services.

"Regulating premiums won't do anything to reduce the soaring costs of medical care. This would be like capping the prices automakers can charge consumers, but letting the steel, rubber, and technology manufacturers charge the auto makers whatever they want.

"There is also a lot of attention on health plans' profits. The track record shows that this is an efficient, low-margin industry whose margins are consistently lower than other sectors in healthcare. According to Yahoo! Finance's latest analysis of quarterly financial data, the net profit margin for the entire health care sector is 11%, while health plans' net profit margin is 3.4%.

"In fact, out of every dollar the nation spends on healthcare, less than one penny goes to health plan profits. It is time to ask: what are we doing about the other 99 cents?

"We need to ask this question because new health spending projections released by CMS recently found that healthcare's share of the economy grew 1.1 percentage points in 2009—the largest one-year increase in healthcare's share of the GDP since the federal government began keeping track in 1960. The report notes that the 'two primary drivers of growth . . . are medical prices and utilization.'"

Blue Cross and Blue Shield Association
"Reining in healthcare costs, along with improving quality and expanding coverage to everyone, is a goal that the Blue Cross and Blue Shield Association (BCBSA) shares with the Obama administration and the Congress. We agree escalating premiums continue to burden everyone.

"That's why we have consistently advocated for healthcare legislation that makes important insurance and delivery system reforms to make insurance affordable without jeopardizing the coverage that people enjoy today.

"President Obama's proposal to establish a new Health Insurance Rate Authority ignores the unique cost drivers in each of the 50 state insurance markets.

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