Obama Health Care Plan Costs More, Covers Less

By: Liberal Pi
Published On: 2/8/2008 4:35:42 AM

Paul Krugman, over at the New York Times, performed a comparative analysis yesterday highlighting the differences between the health care plans of Senator Obama and Senator Clinton, one of the few policy divisions between the two.

Both plans require that private insurers offer policies to everyone, regardless of medical history. Both also allow people to buy into government-offered insurance instead.

And both plans seek to make insurance affordable to lower-income Americans. The Clinton plan is, however, more explicit about affordability, promising to limit insurance costs as a percentage of family income. And it also seems to include more funds for subsidies.

But the big difference is mandates: the Clinton plan requires that everyone have insurance; the Obama plan doesn't.

Fair enough, this difference was most recently highlighted by Senator Obama's mailer claiming that the Clinton plan forced those who couldn't afford insurance to buy it, a la Harry and Louise. Mr. Krugman is quick to point out though, that Senator Obama's plan is not without flaws.


Mr. Obama claims that people will buy insurance if it becomes affordable. Unfortunately, the evidence says otherwise.

After all, we already have programs that make health insurance free or very cheap to many low-income Americans, without requiring that they sign up. And many of those eligible fail, for whatever reason, to enroll.

An Obama-type plan would also face the problem of healthy people who decide to take their chances or don't sign up until they develop medical problems, thereby raising premiums for everyone else. Mr. Obama, contradicting his earlier assertions that affordability is the only bar to coverage, is now talking about penalizing those who delay signing up - but it's not clear how this would work.

Without a mandate one of the chief contributors to rising premiums, namely uninsured personsshowing up in emergency rooms, will continue to occur. Even worse, Barack is starting to contradict himself on the enforcement mechanism issue of his health care plan. Finally, the political reality is that either plan will be watered down in Congress, regardless of who gets the nominaton, so why start with a plan that concedes half the battle in the first place? Still, the cost analysis brought to bear on the two plans was the most fascinating...

So the Obama plan would leave more people uninsured than the Clinton plan. How big is the difference?

To answer this question you need to make a detailed analysis of health care decisions. That's what Jonathan Gruber of M.I.T., one of America's leading health care economists, does in a new paper.

Mr. Gruber finds that a plan without mandates, broadly resembling the Obama plan, would cover 23 million of those currently uninsured, at a taxpayer cost of $102 billion per year. An otherwise identical plan with mandates would cover 45 million of the uninsured - essentially everyone - at a taxpayer cost of $124 billion. Over all, the Obama-type plan would cost $4,400 per newly insured person, the Clinton-type plan only $2,700.

A plan that only solves half the problem, and costs 1.5 times more per perso than a plan that would provide universal coverage? Doesn't quite make sense does it?

We can have health coverage for every American, but we can't be afraid to back down from the inevitable fight or settle for plans that only provide half the answer.


Comments



Just one question. (Lowell - 2/8/2008 6:19:27 AM)
If there's a "mandate" for everyone to purchase insurance, what's the penalty - fine? jail? - if you don't follow the "mandate?"  What about people who want insurance but can't afford it (like my own sister in law in Massachusetts)?  As far as I can tell, Hillary Clinton has largely avoided answering this important question.


Political reality . . . (JPTERP - 2/8/2008 9:22:26 PM)
a front end mandate like Clinton's could impact 15-20% of the population.  A back end mandate like Obama's is likely to impact only 3-5%.  Just from a political perspective it's pretty clear which one will be the easier sell and more likely to happen.


To paraphrase your man... (SWVA.Observer - 2/9/2008 1:10:10 AM)
Sounds like you and Senator Obama are saying "No, We Can't."

I say... "Yes We Can!"



I say . . . (JPTERP - 2/11/2008 1:50:41 AM)
"Yes we can" to universal health insurance.  

I say "No we shouldn't" to Clinton's template for lining the pockets of the health insurance industry (and the lobbyists who fund her campaign).  



Fact Check: Affordability and Mandates (SWVA.Observer - 2/9/2008 1:07:01 AM)
Hillary's plan mandates individual health insurance coverage for all Americans AND offers federal subsidies for those who cannot afford it. She also osffers tax credits to limit health care premiums to a certain percentage a family's income. Senator Obama's plan mandates coverage for all children... but what's the penalty for families who refuse?

Source:CNN Election Center



I think it should be a tax (relawson - 2/10/2008 6:03:27 PM)
The penalty would be the same as not paying your taxes.  People in lower tax brackets would pay less than people in higher tax brackets.  I think that a national unemployment insurance should cover things while people are unemployed.

I would also like to take employers out of the equation.  Aside from collecting your income tax as they always have, I don't think they should be in the insurance business.



FYI (relawson - 2/10/2008 6:07:52 PM)
That is how it works in Japan.  I don't know if I told this story here or not, but my son got sick while in Japan visiting the grandparents.  

He was hospitalized for almost a week.  My father inlaw (who owns a company) was able to put him on the insurance roles that day.  The total cost out of our pocket for 5 days of hospitalization was about $50, plus all the change needed to watch TV (about a quarter for 30 minutes of TV).

They didn't turn my son away while the insurance was being processed.  He didn't wait for hours.  I was very impressed with the service and the medical attention.  You just don't get that level of service in the US.  



Exactly, Lowell. (KathyinBlacksburg - 2/10/2008 6:50:47 PM)
Without price controls, this amounts to a takings -- from the pockets  of those who cannot afford insurance to the pockets of golden-parachuters in the insurance industry.  And it stinks.  Additionally, Obama would end the insurance industry practice of refusing to cover those with preexisting conditions.  This is another major reason for lack of coverage.  Another reason for lack of coverage is those who've had catastrophic medical circumstances.  Their insurance has run out, they are uncovered, and bankrupt besides.  Garnishing their wages would be so Mitt-Romney of Hillary.  


I'll go with Krugman's analysis (soccerdem - 2/8/2008 11:11:22 AM)
Reading this story all over the net!!


I'm tired of hearing Krugman (Rebecca - 2/8/2008 11:50:00 AM)
He wants us to make some radical changes like Social Security during the FDR administration. Obama knows a gradual approach works best. The only thing which will happen with Hillary's plan is the Republicans will scream "socialized medicine!". Anyone think they won't filibuster her plan?


Now I'm utterly confused (aznew - 2/8/2008 11:58:33 AM)
Don't we need Obama for change, for a radical and transformative break from the past? Hasn't Clinton's practical, incremental approach been derided as just more of the same?

But now, in health care, perhaps the single most important long-range problem facing this country (I personally believe Iraq is of more short-term significance), you argue we should support Obama because he favors gradualism?

One gets the impression that were Hillary Clinton able, somehow, to walk on water, Obama supporters could not admit it were a miracle, but would accuse her of altering the laws of physics just to get elected president.



On a related subject, any thoughts on this? (Lowell - 2/8/2008 10:01:58 PM)
From Wikipedia:

Hillary Clinton received hundreds of thousands of dollars in campaign contributions from doctors, hospitals, drug companies, and insurance companies for her 2006 re-election in the Senate, including several insurance companies that were members of the Health Insurance Association of America that helped defeat the Clinton Health Plan in 1994.

Do you find that a bit...well, odd?  Disconcerting?  

In general, I guess I wonder why we should trust that Hillary will get health care right this time around, besides her vague comments about having "scars," after the 1993/1994 debacle.



Also, check out (Lowell - 2/8/2008 10:18:05 PM)
this article on mandates:

The problem with an individual mandate is that the vast majority of individuals impacted by it will be lower-income people who are working yet don't have access to employer-based health coverage. A report by the Blue Cross Blue Shield Foundation of Massachusetts shows that 75% of the uninsured live below 300% of poverty and most are working, yet they are not eligible for employer-sponsored coverage or can't afford what is offered to them. These numbers mirror most states...

When Massachusetts enacted comprehensive health care reform, Chapter 58, in 2006, it was heralded as the first state to pass universal health care coverage, yet it still left many families unable to afford the health care they were now mandated to buy, unlike comprehensive plans enacted in Maine and Vermont which expanded coverage without an individual mandate.

The bottom line conclusion of the article: "As a means to achieving quality and affordable health care for all, individual mandates are problematic absent strong affordability protections for consumers."

That's what this debate is about, as far as I can tell.



Regarding the mandate issue... (SWVA.Observer - 2/9/2008 1:15:24 AM)
I'd suggest you see the above fact check and note the four-tiered approach to protect consumers and ensure affordability.

1. Limiting premiums to a certain percentage of a family's income via tax credits.
2. Federal subsidies to those unable to afford health care.
3. Bar insurance companies from charging higher premiums to those with pre-existing conditions.
4. Requires large businesses to provide or help pay for employee coverage.



She has received the most donations from the health care industry (KathyinBlacksburg - 2/10/2008 6:52:27 PM)
Previously she received the second most from the industry.  This year, she surpassed other candidates of both parties.


Clinton's Plan Garnishes Wages (Flipper - 2/8/2008 9:38:46 PM)
Hillary want to garnish the wages of those very workers who cannot afford to pay for health insurance themselves.  Her plan will drive working class voters into McCain's camp - it's political suicide.  If nominated, Hillary's health care plan will do to Democrats in 2008 what her health plan did in the 1994 mid-term elections -guarantee a Republican sweep.  


This is false, Flipper (aznew - 2/9/2008 8:09:15 PM)
The enforcement mechanism for mandates is not yet decided. Garnishment was one option that has merely been mentioned.

I understand some enforcement is necessary, but this is buying into GOP talking points.

Also, Obama's plan includes some mandates as well.



That's just doublespeak. (KathyinBlacksburg - 2/10/2008 6:55:27 PM)
An individual mandate would take from individual pockets, bank accounts or paychecks.  How else would it be done?  


I don't know the answer to that (aznew - 2/10/2008 7:55:52 PM)
Health care is a difficult problem. Each candidate has a plan, and they deserve serious consideration. But when you say "Hillary wants to garnish the wages of those very workers who cannot afford to pay for health insurance themselves," it is patently false and intended, IMHO, not to advance the serious discussion that this issue needs, but as a scare tactic.

Sen. Clinton has made clear that a big part of her plan is to make insurance affordable. Enforcement mechanisms are not intended for people who cannot afford the insurance, but for people who can afford the insurance, but won't participate because they are trying to game the system.

Big difference.

So, I don't think it is doublespeak. But you know what? Let's have a serious discussion about it. Both plans have their merits, and their problems. But lets not misrepresent candidate's positions in order to scare folks.



Hep c patient (pvogel - 2/8/2008 10:18:08 PM)
They raised my interferon from 30$ to 300$ co pay per month in 2008, Just to gouge me. I have the fed employees health plan... we are getting screwed, and the ceos make 100 million. This is wrong, it goes against old testament stuff( Read your bible, republicans) and will not stand.

Jim Moran's office has been useless to help.



If I have one concern about Obama's position (relawson - 2/10/2008 6:21:54 PM)
It's his position on healthcare.  Honestly I think that Clinton has a better plan.

But, I also see where Clinton's campaign money comes from so I am skeptical of what she would actually do.

So my options are going with a better plan (or what I believe to be better) and a person I don't trust to implement that plan.  Or I could go with a good plan and a person I do trust.

I've got to go with the person I trust.



Plus Hillary already had her chance to remedy health care insurance. (KathyinBlacksburg - 2/10/2008 6:54:11 PM)
She failed.  And she never tried again.  She had nearly six more years to try.  We have no evidence we can trust her to get it right this time, or than she really means it when she says it.


Kathy (SWVA.Observer - 2/10/2008 7:30:14 PM)
Many folks tossed out my criticism of Barack's energy policy in one of my latest posts... because the energy committee chairman was Sen. Inhofe. If Obama supporters are going to use that line of attack, then I fill justified parroting it in this case. You think the Republicans would let such a plan get passed?


The record is: (KathyinBlacksburg - 2/10/2008 7:35:10 PM)
Clinton zero
Republicans zero.

Let Obama have a chance.  The above have failed.