Report: Federal Health Insurance Proposals Promising

Jan. 10, 2009 – A recent analysis of proposals by President-elect Barack Obama and members of Congress to reform the United States’ health care system suggests it is possible to provide health insurance coverage for all Americans without significantly increasing total health care spending.

Nearly 46 million Americans – about 15 percent of the nation’s population – have no health insurance coverage. Americans on average pay more per person for health care than any other industrialized nation, but many studies indicate Americans have poorer health, commit more medical mistakes and are less satisfied with their medical care.

The report by the Commonwealth Fund suggests health care reform plans advocated by Obama and Senate Finance Committee Chairman Max Baucus could provide health insurance coverage for nearly all Americans. But to do so, all Americans would need to purchase health insurance coverage while health insurance companies and health care providers reduce administrative costs and more efficiently and frugally manage expenses.

“That type of plan can get close to universal coverage at a very modest increase in national expenditures,” Sara Collins of the Commonwealth Fund told Reuters. “If you are a policymaker and you are trying to decide how to expand coverage to most people, these offer different paths to go on.”

Obama and Baucus in separate proposals have suggested creating a national health insurance exchange to provide health insurance coverage to millions of uninsured Americans. Baucus’ proposed plan would require everyone to buy health insurance.

Researchers at the Commonwealth Fund analyzed the positives and negatives of the two proposed health care reform plans and compared them to other national health care reform plans proposed by leading members of Congress to extend health insurance coverage.

While the report indicates Obama’s plan is viable, it wasn’t the one deemed most likely to succeed. The health care reform plan with the greatest potential to ensure health insurance coverage for all Americans was proposed by Rep. Pete Stark, a Democrat from California who wants to increase access to Medicare, according to the Commonwealth Fund study.

Stark’s plan would cost taxpayers $188.5 billion in 2010 but would reduce national health care spending by more than $58 billion by providing health insurance coverage for more people through Medicare. The federal Medicare program has significantly lower administrative costs than private health insurance plan.

Collins said the plans Obama and Baucus have proposed would increase national expenditures by $17.8 billion in the first year. A study by PriceWaterhouseCoopers last fall estimated the Obama plan would cost $75 billion in the first year, and would provide health insurance coverage for 95 percent of Americans.