The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Obama’s Health Care Reform Plan Out of Balance

Posted by Alan on February 10, 2008

Senator Barack Obama has been on the defensive concerning his health care reform proposal for much of the past several months. Senator Hillary Clinton and, while he was in the race, former Senator John Edwards pounded Senator Obama for failing to seek universal coverage by mandating Americans to obtain health insurance. If you don’t start off with a plan for universal coverage, Senator Clinton claims in nearly every speech she gives, you won’t get it. She goes further, claiming universal coverage is a moral obligation of the nation and a litmus test Democrats.

Senator Obama counters that Senator Clinton would have to garnish wages to force people to buy coverage. He notes that Senator Ted Kennedy, the dean of Congressional health care reformers, is comfortable enough with the Obama approach to endorse the Senator. Finally, Senator Obama claims his reform package, by lowering  the cost of coverage, will result in Americans getting covered because they will finally be able to afford it.

Unfortunately for Senator Obama, his logic doesn’t hold up to any meaningful scrutiny. Virtually every study done shows Senator Obama’s approach resulting in fewer insured Americans than does Senator Clinton’s. Arguing that they’re equal in terms of “universal coverage” defies logic and experience.

But there’s a worse gap in in Senator Obama’s health care reform plan: his refusal to consider a mandate to buy coverage, coupled with his plan’s inclusion of requirement that carriers sell policies to all applicants, undermines his claim to making coverage more affordable. The carrier mandate (often called “guarantee issue”) raises the cost of insurance unless all residents are required to buy. That’s how New York and New Jersey approached health care reform — carriers there have to sell to all comers, but the purchase of coverage is voluntary. The result: premiums are twice as high in those states than in California.

This shouldn’t come as a surprise. Imagine a system in which homeowners could wait to buy fire insurance until after their house burned down. Or one in which drivers could wait until after their accidents to buy car insurance. The cost of these policies would be astronomical. After all, if consumers can avoid paying a premium until they need the coverage, they’ll wait. That’s not being irresponsible, that’s human nature.

There’s no reason to think introducing this imbalance nationally will produce any other result when it comes to health insurance. Without including both, a mandate for carriers to sell and for consumers to buy coverage, Senator Obama’s plan will increase health insurance costs in spite of other provisions in his reform package.

Senator Obama no doubt is aware of this reality. He may be in denial about it, but he’s bright and so are the people around him. In an ideal world he’d address the imbalance in his health care reform plan now, during the primaries. But doing so would open him to charges of flip-flopping. It would demonstrate that Senator Clinton’s experience dealing with health care reform led her to a more responsible conclusion (at least on this aspect of their plans). Senator Obama might be interested in bringing a new approach to politics, but even he’s not ready to hand his opponent a cudgel on an issue as important to voters as health care reform.

My guess is he’ll wait until after he’s secured the nomination — if he does, indeed, secure it. Then, sometime in the summer he’ll introduce a willingness to consider guarantee issue in combination with an “affordability exemption” to assure it doesn’t bankrupt consumers. And if it doesn’t happen during the campaign, guarantee issue is certain to find its way into his Administration’s reform package.

If Senator Obama is lucky, Senator Clinton will continue to level only the “lack of universal coverage charge” against him. That line of attack is getting old, but she seems unwilling to abandon it, even though she’d be far better served by forcing Senator Obama to defend an indefensible imbalance in his plan.  


6 Responses to “Obama’s Health Care Reform Plan Out of Balance”

  1. fitnesstest said

    The cigarette industry worked on the one hand many years to convince us that smoking is a great deal but on the other hand its for our own health and fitness if we stop smoking. By the way it will decrease costs.

  2. Matt said


    Those are some harsh words from someone who is seriously misinformed. The insurance industry is a business, just like any other. You don’t blame the carriers because costs are high. Costs are high, because health care costs a lot of money. If only you paid cash for everything regarding your health, then you would truly understand the costs. You pay 20$ copay for some prescription and you assume thats what it costs. Well most of the time you would be wrong. Chances are the drug costs your insurance company more like $500. People like you don’t fully understand the industry so you just point the blame wherever you think it is most convenient. Grow up and stop wishing evil and cruel things about people whop are just like you and me. Unless you are a fire fighter, policeman, or teacher you cant really talk about your profession and how noble you are. Why do you think car insurance is so cheap? Most of the time the claims are minimal to fix a car. So the insurance is cheap. The claims for health insurance can be in the hundreds of thousands, if not millions sometimes. So the insurance is more expensive. It is basic math and business 101. Did you take business 101, or were you too busy talking trash about business minded individuals.

    P.S. I don’t work for an Insurance Company.

  3. mark said

    None of the plans from any of the current candidates excludes Insurance Companies. They are just a middle man, that pushes paper, they don’t make anything and all they are concerned about is their stock price. They will do anything to show growth. Every year they raise rates so they can show an increase from the previous year or quarter. They also hold on to the money that is supposed to pay out claims as long as they can. It’s called delay, delay, deny, just so they can show more profit on a balance sheet. These people are the scum of the earth.

    The problem is they see a “widget” the same as a “human life”. They will go into their spiel about ” it’s just business”, these people are sociopaths who have no conscience. They think they are better then everyone else and they have the right to do this.

    I pray everyday, that something terrible happens to them and their families. I know that’s cruel, but it is the only way. Some still won’t change, because they only care about themselves, but I hope they and their families have horrible tragedies, have to go through the hospital system. Of course they will have insurance not like what most people have, but they deserve to suffer, and hopefully they will be judged by God when they die.

  4. Ann said

    I have quit smoking with the help of the UK NHS who prescribe 6 months of nicotine therapy and other help if I need it for the price of one single prescription.
    The smoking ban last year saw huge reductions in people smoking as many saw it as time to quit.
    I don’t think Obama’s policies stack up but he is telling people what they want to hear and many will overlook the fact that his policies will not work when the maths and logistics are thought through.

  5. athenivandx said

    Apparently Michelle forced him to quit before she’d support his presidential bid.

    I just quit smoking recently…..3 weeks ago on Monday.

  6. ab said

    Good healthcare starts with no smoke(ing) in the white house.

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