Obama Administration's Health Care Plan

¶ … Obama Administration's health care plan is one that some people praise and other people seem to fear. With that in mind, it is very important to know what is really in the plan, especially when it comes to the 'public option' that so many people seem to be concerned about. Annotated Bibliography A Liberal Supermajority (2008). The Wall Street Journal. Retrieved from: http://online.wsj. com/article/SB122420205889842989.html. Micro-simulation is based on utility-maximizing and how individuals choose insurance plans.

It allows for variation among a lot of different variables, including both price and income. This kind of modeling is very important because it combines an individual's characteristics and behavior in order to best determine how a person, or a subgroup, within a population would react to policy change on any given level. They can be subject to selection bias, however, which can make them unreliable. (a Liberal Supermajority, 2008). Burman, L. et al. (2008). An updated analysis of the 2008 presidential candidates' tax plans: Revised August 15, 2008. Tax Policy Center.

Retrieved from: http://www.taxpolicycenter .org/UploadedPDF/411749_updated_candidates.pdf. While it might not seem evident how a tax plan could have anything to do with a health care plan, what Obama said during his campaign regarding taxes and what he has done so far -- as well as what he is working toward doing in the future -- can give insight into what he may do with health care in the future.

In other words, whether he keeps his promises is something that can be extrapolated from tax plans and other information. (Burman, et al., 2008). D'Angelo, G., & Winfree, P.L. (2008). The Obama health care plan: A closer look at cost and coverage. The Heritage Foundation. Retrieved from: http://www.heritage.org/Research / Healthcare/wm2114.cfm. According to D'Angelo and Winfree, the Obama health care plan would cost much more than expected while saving the average family very little.

Because of that, many analysts find the Obama plan to be a poor one, based on 'if only' assumptions that may or may not come true. If things go 'right,' the plan could be a good one. If they do not, there could be serious financial and medical consequences. With that in mind, it is important to note that this research came from two different 'authorities,' and these companies have differing opinions. (D'Angelo & Winfree, 2008). Feldman, R. Tomai, L, & Duran, S. (2008).

Impact of Barack Obama 2008 Health Reform Proposal. HSI Network. Retrieved from: http://www.hsinetwork.com/Obama_HSI-Assess_08-21-2008.pdf. Clearly, the reform that Obama is talking about when it comes to health care is very significant. There are those who feel it is just what the country needs, and those who feel as though it will end in disaster, but there are few clear-cut, provable, factual issues regarding it. Most of it appears to be speculation and opinion, since the details of the plan have not yet been released.

The idea of health care reform is clearly having a serious impact on the country, polarizing it like few things have before, and it will continue to do so, even long after it is settled. (Feldman, Tomai, & Duran, 2008). Feldman, et al. (2005). Health savings accounts: Early estimates of national take-up. Health Affairs, 24(6), 1582-1591. Retrieved from: http://content.healthaffairs.org/cgi/reprint/24 / 6/1582.

The health savings account has long been touted as one of the ways for a person to save for medical costs or a catastrophic event such as a serious accident or disease. However, the rising costs of medical care have made most of these savings accounts obsolete because people cannot possibly save enough money to handle serious illnesses and injuries. With health insurance for everyone, the argument could be made that these accounts would no longer be necessary. (Feldman, et al., 2005). Moffit, R.E. Ph.D., & Owcharenko, N. (2008).

The Obama health care plan: More power to Washington. Heritage Foundation Backgrounder No. 2197. Retrieved from: www.herit age.org/research/health care/bg2197.cfm. Moffit and Owcharenko discuss the Obama plan in more detail than most people, addressing the concerns that a lot of the public has about the plan, the costs of it, and what kind of coverage it will really provide.

If it will be like the Canadian system, where people sometimes have to wait many months for important procedures, there will be many people who will reject it. Additionally, giving Washington more power is not something that sits well with many Americans today, so that is a significant hurdle for Obama. (Moffit & Owcharenko, 2008). Obama for America. (2008). Barack Obama and Joe Biden's plan to lower health care costs and ensure affordable, accessible health coverage for all. Retrieved from: http://www.barack obama.com/pdf/issues/Health careFullPlan.pdf.

According to Obama and Biden, the health care that they are proposing will not only provide coverage to millions of Americans who currently do not have it and cannot afford it, but it will make that coverage accessible to everyone in a way that they can afford it. They will provide subsidies for those who cannot afford it on their own -- but having health insurance will be mandatory, and those who do not purchase it will be fined. (Obama, 2008). Pauly, M.V. (2008). Blending better ingredients for health reform.

Health Affairs, 27(6), w482-w491. Retrieved from: http://content.healthaffairs.org/cgi/content/full/hlthaff.27.6.w482 / DC1. Health care reform cannot work with only one idea or plan. There are several plans being considered, and whether any of them are passed will remain to be seen.

The best and most logical way to get one of these plans to pass is to give the American public what it wants -- lower cost health care that is offered to everyone, and where everyone can choose what company and plan they want to use, so that they do not feel as though they are restricted to just one option or that they are forced into health care choices that they would not normally make for themselves but now have to because of their plan or the reforms that have been put in place for their group and/or income bracket.

(Pauly, 2008). Sack, K. (2008). On health plans, the numbers fly. The New York Times. Retrieved from: http://www.nytimes.com/2008/10/22/us/politics/22health.html?hp. Just what the numbers mean in Obama's health plan is something to think about, but it is not the only issue. It is also important to realize that there are several plans out right now. They are circulating in the House and Senate, and they are all versions of the same plan -- but yet they are very different.

The public option, the cost of the plan, and all kinds of other issues are at stake, and a lot of people are wondering just what kind of plan will be passed. They do not have enough information to know if the plan is good or bad for them, overall. (Sack, 2008). The Lewin Group. (2007). Summary description of the health benefits simulation model (HBSM). Retrieved from: http://www.lewin.com/content/Files/HBSMSummary.pdf.

Understanding more about health benefits overall, and why people choose the options that they choose, is very important when looking at the Obama Administration's health care plan. This is due to the fact that the plan must not only be a good one, but also one that the public as a whole finds valuable. Simulating which people would accept what kind of plan can help those who are working to create the plan tailor something that works but that is also accepted by the largest number of people.

If this is not done, a plan could fail even though it has many good points to it. (the Lewin Group, 2007). Article Synthesis According to the article by D'Angelo and Winfree (2008), there are serious concerns surrounding the Obama Administration's health care plan. It is no secret that the plan is very ambitious, and many people seem to feel that it is too ambitious in that it will be difficult to pay for and will not work as well as it should.

But is that accurate? Largely, that depends on who is asked that question. The article looked at here addresses the opinions of more than one expert in the field in order to help determine whether the Obama health care plan is really everything that the Administration claims it to be (D'Angelo & Winfree, 2008). The key point with regard to these differing opinions is that it is not just about money.

There are also concerns about whether a person would still get the same kind of and quality of coverage that he or she receives now, if the Obama health care plan passes and is eventually signed into law. The number of uninsured people in America would be reduced, but by how much is a matter of the opinions of various experts conducting studies for specific institutions and organizations (D'Angelo & Winfree, 2008). Also, how much it would cost and how it would be paid for remains to be seen.

There are estimates, but that is all that they can possibly be at this point. It is not possible to come up with clear and distinct numbers that are provable and accurate, because the specifics of the plan have not been spelled out completely for the American public (D'Angelo & Winfree, 2008). While people who work with these kinds of issues can present their best guesses, they cannot actually provide proof that the Obama Administration's health care plan is good or bad, or how much it will cost.

The 'if only' propositions that are in much of the plan tend to make statisticians and fact-checkers nervous, simply because of the nature of these kinds of propositions -- they rely on the best-case scenario (D'Angelo & Winfree, 2008). What would happen if the best-case scenario does not work out is something that cannot easily be answered, and that is what has people the most concerned.

Everything is fine if things operate smoothly, but a simple problem could end up costing millions of dollars and/or leaving a lot of people without insurance (D'Angelo & Winfree, 2008). There is also the concern regarding government control, because many people are already voicing their concerns about the government attempting to interfere too much in their lives.

If they are worried about that now, how much more will they be worried if this health plan and mandatory health insurance requirements are put into place? That is something else that the experts cannot yet answer. It remains to be seen as the potential of this plan comes to light and as the Obama Administration moves forward with it. Highlighted Paragraph Summary According to the President, people cannot afford health insurance, and that is the chief reason why they do not have it.

The campaign made a promise that an average family would be able to lower their insurance premiums by around $2,500. They did this in order to make their plan seem real to people, so they would clearly understand what Obama was offering (Sack, 2008). The best-guess estimates of the advisors were used to come up with that number, as that would be the amount they would assume a family would save if the plan that Obama proposed was working exactly the way that it should.

The Lewin Group, however, analyzed the Obama plan and stated that the actual savings to a family would only be $426 -- a significant difference. Working Outline I. Introduction Thesis -- the Obama health care plan is confusing to a lot of people, and there are many conflicting opinions about its cost and perceived effectiveness; these must be sorted out so that the country can make an informed decision regarding the value of this plan for the country. II. Healthcare in America A. Past Healthcare B. Current Problems C.

Future Concerns III. The Obama Health Plan A. Pros of the Plan B. Cons of the Plan C. Public Opinion IV. Conclusion Revision Summary Revision strategies for this paper included doing more research than had been originally planned. There were so many conflicting options and ideas among laypeople, politicians, and companies and organizations that were studying the issue that it became very difficult to separate what was true from what was opinion. Because of that, digging deeper was required and still may be necessary.

There are so many elements of the plan -- specific details -- that still are not clear, making it hard to form a solid opinion of the value and worth of the health care plan proposed by the Obama Administration. Simplifying what was studied and addressed also became necessary, because talking about the plan in too much detail does not clarify anything. It only becomes more confusing because there is so much that can be looked at.

For the length of the paper it made much more sense to focus on the biggest of the basics such as the cost, the implementation, and whether the public thinks that the plan is a good idea. With that in mind, reducing the outline to a more basic form and focusing on both sides of the health plan -- pros and cons based on what is currently verifiable and accurate -- seemed to be the most logical and rational solution.

Article Copy http://www.heritage.org/Research/Healthcare/wm2114.cfm October 24, 2008 The Obama Health Care Plan: A Closer Look at Cost and Coverage by Greg D'Angelo and Paul L.

Winfree WebMemo #2114 Presidential candidate Senator Barack Obama (D-IL) has put forth an ambitious health care plan.[1] the plan proposes: Expanding eligibility for existing public programs, including both Medicaid and the State Children's Health Insurance Program (SCHIP); Creating a National Health Insurance Exchange to serve as a federal regulator of private insurance plans that would compete alongside a new National Health Plan; Providing income-related subsidies for those without employer-sponsored health insurance while mandating that children have coverage; and Requiring that medium and large employers provide coverage or pay a tax, while extending tax credits to small businesses and creating a government reinsurance program to cover businesses' catastrophic health costs.

Differing Estimates Analyzing proposals based on campaign documents and media accounts is inherently difficult, as these materials lack the level of detail necessary for a rigorous econometric analysis.

Nonetheless, several organizations have done so, using a variety of assumptions and methodologies.[2] Most notable are the Lewin Group,[3] Health Systems Innovations Network,[4] and the Urban Institute-Brookings Institution Tax Policy Center.[5] The best independent research shows that the Obama plan would cover roughly half of the 45 million uninsured through an expansion of public coverage; rely on soft methods of cost-savings; and require significant increases in federal expenditures. Coverage.

According to the Lewin Group, the Obama plan would reduce the number of uninsured by 26.6 million in 2010 if fully implemented in that year. The plan would also bring about significant shifts in sources of coverage. While 21.6 million people would lose their private health insurance, 48.3 million people are projected to obtain public coverage through Medicaid, SCHIP, or the new National Plan. Private employer-sponsored coverage would decline by 13.9 million, and private non-group coverage would decline by 7.7 million.

Meanwhile, 18.6 million employees would buy into the new public plan through their workplace (as their employers switched to this plan from private coverage), 13.1 million individuals would buy into the public plan in the non-group market, and 16.6 million individuals would become newly enrolled in Medicaid or SCHIP. Therefore, the expansion of coverage under the Obama plan would be driven by enrollment in public coverage. This would entail a crowd-out of existing private non-group and private employer-sponsored insurance.

Estimates of sources of coverage, however, are sensitive to assumptions about the level at which provider reimbursement is set for the National Plan. The figures above are based on the assumption that the National Plan would reimburse providers at a level halfway between private market rates and the lower rates set by Medicare. In an alternative scenario modeled by Lewin, reimbursement was reduced to Medicare payment levels.

Enrollment in the National Plan reached as much as 42.9 million, contributing to a 32-million-person decrease in private health insurance and a 60.1-million-person increase in public coverage. While sources of coverage would change significantly, there would not be a significant change in the net reduction of the uninsured.[6] Lewin applied a type of model known as a micro-simulation.[7] Health Systems Innovations Network (HSI) conducted an analysis (funded by the McCain campaign) also using this type of approach.[8] it found that the plan would reduce the uninsured by 25.5 million.

It also found that 24.6 million people would enroll in the new public plan through employers or in the non-group market. However, the HSI study did not look at the proposed expansions of Medicaid and SCHIP that would further increase enrollment in public coverage. In contrast, the Tax Policy Center (TPC) applied a different type of model known as an elasticity-based approach.[9] the TPC estimated the Obama plan would reduce the number of uninsured by 18.4 million in 2009.

In that year, 4.3 million people would gain employer sponsored insurance, 5.8 million would obtain non-group coverage, and 8.3 million would enroll in public coverage. The TPC did not take into account the differences in provider reimbursement between the National Plan and private insurance.[10] Moreover, the results are somewhat confusing because it is impossible to determine enrollment in the National Plan. Cost. According to the Lewin Group, health care system-wide savings over the 2010-19 period would be about $571.6 billion.

Since the plan does not fundamentally change incentive structures in the health care sector,[11] most of its anticipated savings come from various delivery system improvements common to Obama's and McCain's plans, ranging from health information technology to disease management. The effectiveness of these initiatives assumes major behavioral changes.

As Professor Mark Pauly, a prominent health care economist at the University of Pennsylvania, explains: The main problem is that these [popular, common methods] are "if only' savings, which can be achieved "if only' certain events would occur, such as physicians' being willing to adopt health it, consumers being willing to accept changes in diet and exercise.

& #8230; There is little evidence that there are known methods to cause the "if only' behavior to occur, and to occur quickly on a large enough scale to matter.[12] The efficacy of these "if only' savings has been seriously questioned by the Congressional Budget Office (CBO). The CBO has reported that evidence of disease management,[13] comparative effectiveness,[14] health information technology,[15] or prescription drug re-importation[16] reducing costs quickly and appreciably is lacking. Obama says the reason people lack health insurance is that they cannot afford it.

The Obama campaign, in an effort to "talk to people in a way they understand,'[17] made an audacious promise: The typical family would save $2,500 on premiums under the Senator's health plan. In calculating this figure, the Obama advisors relied on their own best-guess estimates of "if only' system savings at full implementation. In its analysis of the Obama plan, the Lewin Group projects that the average savings per family would be $426.

Lewin, HSI, and TPC all found that spending by the federal government would, on net, have to increase significantly in order to implement the plan.

Lewin projected that the Obama proposal would increase federal spending by about $1.17 trillion over the 2010-19 period.[18] HSI estimates the Obama plan would cost $452 billion per year, or more than $6 trillion over a 10-year period.[19] the dramatic difference between this estimate and others is largely a result of HSI's assumption that under Obama's mandate to cover children, the federal government would subsidize virtually the full cost of coverage. Also, HSI finds that the employer mandate would add sizeable costs to the federal government.

The TPC projects the Obama plan would cost $1.6 trillion over 10 years. However, the TPC model did not account for any of the savings measures in the plan. In May 2007, advisers to the campaign issued a memorandum to "interested parties' that estimated the plan's cost.[20] Under "best-guess' assumptions, the Senator's advisers estimated the plan's net cost at $50-$65 billion a year at full implementation. The memorandum then claimed any new cost could be covered by rolling back part of the Bush tax cuts.

It is controversial because of both its cost and savings estimates,[21] and other analysts have called into question the memorandum's conclusions.[22] Since the Bush tax cuts are set to expire within two years anyway, they are not a viable offset, because beyond expiration they are built into the federal government's budget baseline.

Complicating the matter further, repealing the Bush tax cuts early has already been proposed by Obama as potential source of revenue for a number of other policy initiatives.[23] Expanding Government Control The Obama plan would reduce the number of uninsured citizens, but it would not control costs in any significant way while demanding considerable increases in federal expenditures. Coverage expansion would be driven by enrollment in public plans in which the government would set benefit levels and provider reimbursement rates.

Cost-savings would not come from fundamentally realigning economic incentives but would rely on dubious "if only' propositions related to changes in health care delivery. Greg D'Angelo is Policy Analyst in the Center for Health Policy Studies and Paul L. Winfree is a Policy Analyst in the Center for Data Analysis at the Heritage Foundation. Jeet Guram, a Heritage health policy intern from the University of South Carolina, contributed to the research in this paper.

[1] Obama for America, "Barack Obama and Joe Biden's Plan to Lower Health Care Costs and Ensure Affordable, Accessible Health Coverage for All,' at http://www.barackobama.com/pdf/issues/Health careFullPlan.pdf (October 23, 2008); for an analysis of the Obama plan, see Robert E. Moffit, Ph.D., and Nina Owcharenko, "The Obama Health Care Plan: More Power to Washington,' Heritage Foundation Backgrounder No. 2197, October 15, 2008, at www.heritage.org/research/health care/bg2197.cfm.

[2] See Kevin Sack, "On Health Plans, the Numbers Fly,' the New York Times, October 21, 2008, at http://www.nytimes.com/2008/10/22/us/politics/22health.html?hp (October 23, 2008). [3] the Lewin Group, "McCain and Obama Health Care Policies: Costs and Coverage Compared,' October 8, 2008, at http://www.lewin.com/content/Files/The_Lewin_Group_McCain- Obama_Health_Reform_Report_and_Appendix.pdf (October 23, 2008). [4] Roger Feldman, Lisa Tomai, and Sally Duran, "Impact of Barack Obama 2008 Health Reform Proposal,' HSI.