THE OBAMA HEALTH CARE PLAN. The Obama health care plan is out, and I'm still working my way through it, partially because some of the details don't yet seem to exist. But here's the gist: The plan is centered around a new regulatory agency called the National Health Insurance Exchange, which is both responsible for regulating the insurance industry (more on this in a moment) and administering the new public insurance program Obama's plan creates. That's a big deal -- one of the real tests of seriousness for the new plans is whether they create a public insurance program, and Obama's does. Unlike Edwards' and Jacob Hacker's plans, he doesn't use Medicare as the basis for the program, but instead creates an entirely new public insurer.
Here's the catch: The Obama plan does not set the public and private plans in competition with each other, as the Edwards plan does. Rather, the best way to think of it is as a two-track plan. The first track extends the new public program to the self-employed, small businesses, and the uninsured. In other words, the public plan is open to those who are currently disadvantaged in the insurance market -- it is not a new insurance market unto itself. That said, if it proves popular and effective, it would be trivial to expand it in the future, letting all businesses, or all individuals, buy in.
The second track is a restructured insurance market. Participating insurers -- and as of yet, it's not clear to me whether insurers have to participate, or whether their participation would be optional -- will have to offer minimum benefits, spend a certain portion of their budget on patient care (rather than profits and advertising), be barred from discriminating on health history, and be forced to justify large premium increases. Employers will have to either pay into this market, or pay into the national plan.
From there, Obama has a lot of the normal additions of preventive health care, electronic medical records, chronic disease management, etc. A notable omission is any sort of mandate for adults: This is a plan that would make universal coverage affordable and feasible, but it is not a plan that create universal coverage. It will undoubtedly cut down on the number of uninsured, but without some sort of individual or government mandate, it won't create 100 percent coverage. The Obama campaign's decision to omit a mandate is a puzzling one, both from a policy perspective -- you want the largest possible risk pool -- and a political one. His plan, unlike others, is not truly universal, it's simply possibly universal.
But I'm actually less concerned about that then certain other features of the plan. All the information I've got is missing a few key details which will decide if it's a very good plan, or a very unrealistic one. Here, for now, are the unanswered questions:
1) Who can participate in the public option? It says small businesses at one point, then suggests that all businesses can buy in if they so choose. If the public insurer is confined to currently disadvantaged groups, it will be considerably less transformative than if it's an across-the-board option. And how it's funded, how much premiums are, and what percentage of payroll employers would pay in decides how likely it is to emerge a viable alternative option. But for now, this doesn't look like backdoor single-payer in quite the way the Edwards or Hacker plans do.
2) Is the insurance exchange mandatory? The plan is unclear on this, too, but it's the crucial point. If all insurers have to register and submit to the exchange's guidelines to remain in business, then it can actually reform the industry. If participation is optional, the plan will fail, just as a similar plan failed in Oregon in the early-90s. I have trouble believing the Obama team would leave this up to insurer goodwill, incentives, or even access to large markets, but it's possible, and no real evaluation of the plan's chances can be offered till we achieve clarity on that point.
3) How do we achieve universality through it? Why is the plan better off without provisions for universality from the start? And what are the subsidy levels? Until we know how much premiums will actually be, we can't even get the actuaries to estimate what take-up will be.
I'll try to get answers on all this and report back. The plan, I should be clear, has just about all the elements of a very good proposal. There are just some odd elements that lack clarity, but are crucial to its success. Props to the Obama team for coming out with a public option and serious insurer regulation, though.
--Ezra Klein
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COMMENTS (4)
Ezra,
It looks like any American (and therefore, presumably, and employer) could buy into the public plan: "Through the Exchange, any American will have the opportunity to enroll in the new public plan or purchase an approved private plan." That's from page 4, section 2 of http://www.barackobama.com/pdf/HealthPlanFull.pdf
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