The Tough Road Ahead

John Commins, for HealthLeaders Magazine , December 11, 2008
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President-elect Obama has plenty of ideas for reforming the healthcare system. But with a struggling economy and a ballooning deficit, how many proposals will actually become reality?

When Barack Obama takes the oath of office as the nation's 44th president on Jan. 20, he will bring to the White House an ambitious—and expensive—healthcare agenda. The president-elect's list of proposals includes, among other things, mandated health insurance for all children, in part through the expansion of the State Children's Health Insurance Program, and increasing access to affordable health insurance for the estimated 47.5 million Americans who now have no coverage.

But Obama faces a daunting road ahead. The current downturn in the U.S. economy and the possibility of a $1 trillion federal deficit for this fiscal year have raised questions about whether his healthcare proposals—drafted long before the economy's worst troubles began—are affordable. And even with refortified, larger Democratic majorities in the House and Senate, many are speculating that the new president may have to curb his ambitions.

For starters, nobody really knows how much Obama's proposal will cost. Estimates by the Kaiser Family Foundation, the Tax Policy Center, the Healthcare Leadership Council, and the Lewin Group are all over the map—anywhere from $50 billion to $150 billion annually, or anywhere from $1.2 trillion to $1.7 trillion over 10 years. Henry Aaron, a senior fellow at the Brookings Institution, a nonprofit public policy organization, says the nation's fiscal climate will make meaningful changes to the healthcare system difficult. "Healthcare reform, in the long run, would be a good idea because most of our long-term budget troubles are attributable to rising healthcare spending, and we are going to have to face that at some point," Aaron says. "But psychologically, politically, trying to deliver at a time when the government is slipping, very possibly, into a $1 trillion deficit is, to put it mildly, an uphill struggle."

Obama would create a National Health Insurance Exchange that would pool businesses and individuals who want to buy insurance directly—and that would regulate private insurance, in part, by creating plan participation standards. A public health insurance program would also be created for people who can't access employer-sponsored healthcare and who don't qualify for Medicaid or SCHIP. Income-based subsidies would be used to offset premium costs for the public plan. Additionally, insurers would be prohibited from denying coverage for preexisting conditions, and employers would be required to offer health plans with benefits that are comparable to the new public plan.

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