*Note: This commentary explores some aspects discussed by Obama in his speech during the joint session in Congress last September, which I wrote for my Math260 class. I do not claim full knowledge on the issue at hand.
Universal health care has remained that “great unfinished business” of American society. While the effort of President Barack Obama to finally own the challenge of reform is outstanding, U.S. citizens cannot help but feel overwhelmed with negativity and paranoia about change. The skepticism brought about by an economy fresh from a financial crisis glares in contrast with the idealism of the Democrats’ proposed health care plan. Three basic goals addressed in this bill are: security and stability for the insured, quality and affordable choices for the uninsured, and slower growth of health care costs for everyone. Opponents have slammed the proposal as being unrealistic and expensive, declaring that it will only impact the public the other way around. In this case, is it really worth going out on a limb to push for reform? Or will such an endeavor prove to be too costly that it is no longer worth its long-term gains?
The first issue in the speech that is of primary interest to me is the creation of an exchange where insurance companies can participate and compete with a public option. Obama mentioned that the purpose of this exchange is to offer better prices to those who do not yet have health insurance. I agree that the presence of competition can also reduce, if not prevent certain abuses by insurance companies, and it will also compel them to provide quality coverage to the insured. At the same time, insurance companies will also have to abide by new consumer protections – such as providing routine checkups for no extra charge, or placing caps to people’s out-of-pocket expenses. Now this will surely be good for consumers – but I think it puts too much pressure on insurance companies, especially those which are doing their jobs well in the first place. Such new restrictions will incur more costs, thereby generating higher premium rates – but with the public option in place, they will have no other choice but to forcibly lower their rates in order to compete. Otherwise, a government-sponsored health insurance will remain the most attractive option even to those who already have insurance. And so, while Obama does not intend to put insurance companies out of business, I’m inclined to believe that his new plan just might do exactly that.
The second matter that caught my attention is that the plan seeks to limit premium discrimination based on health risks or “pre-existing conditions” (even gender and age). First of all, I strongly favor the idea that insurance companies should not be allowed to deny anyone coverage, or drop it unexpectedly because of some pre-existing condition that they or the patient have not been initially aware of. I also find it ironic that those with health problems have greater difficulty obtaining coverage when they are the ones who need it the most. However, there are some conflicting issues associated with imposing “unbiased” premium rates. Higher health risks imply higher premium rates – that’s how insurance works; you pay more if you need more. Once the premium rates are no longer based on one’s well-being, overall rates will be higher relative to the healthier or younger ones, and they will end up paying more for those who are frequently sick. In other words, making insurance more affordable to those who have pre-existing conditions might make it unaffordable to those who don’t. In this perspective, it does not seem to be a good idea. But on the other hand, it is precisely that discrimination that gives people the incentive to conceal any pre-existing conditions in order for them to be able to acquire coverage. When that happens, either the insurer will eventually have to water down their coverage or else other people will still end up paying more for the costs. To prevent such cases, perhaps a community rating will be just as favorable. I personally wouldn’t mind paying a bit more if it means giving someone else with a serious illness the opportunity to afford health care.
There’s already a lot of tension between having to drive down premium rates through competition, and being required to cover pre-existing conditions at the same time. Indeed, insurance companies in the U.S. have the most to lose. But it also serves to remind them that their services to the public are more valuable than their profits are to them. And it is the obligation of the government to lay down its hand when the quality of health care is deteriorating because of greed (read: not applicable in the Philippines). Still, I can argue to some extent that Obama may perhaps be undermining the insurance companies too much. Let’s not forget that people abuse insurance companies too by committing fraud. I thereby echo Obama in emphasizing that real reform can only be achieved if everyone does his or her part, insurer and insured alike.
A third aspect I’d like to point out is that under the Democrats’ plan, there will be individual mandate to carry basic health insurance. This is to address the concern that those with insurance are being forced to pick up the tab for the ER expenses of the uninsured by paying higher premiums (or higher taxes) for it. The mandate can therefore level out premium rates by making everyone chip in for the costs of health care, which I believe is only fair. However, making it a requirement of the law though may be a little stringent or restrictive to the lower-income individuals, who may have other immediate priorities than health insurance. Well, Obama did say that individuals and small businesses who still can’t afford insurance will be given tax credits, or a hardship waiver for exemption from the requirement. I guess regulation and enforcement will be the most difficult undertaking with this proposal, but otherwise I don’t see anything wrong with it.
In the three main points I mentioned among many others, I can see that some aspects of the plan can make costs go up, while other aspects can make it go down. We have yet to see which one outweighs the other, and what macro effect it will have on American society. All in all, being the powerful speaker he is, Obama’s speech was rather convincing. He clearly addressed all the controversies and rumors hounding his plan. He did say that American taxpayers will not be subsidizing the public insurance option, in which case competition should be more reasonable. And he did say that the new plan will not add a single dime to their deficit. Of course, while things are easier said than done, clean implementation and enforcement will be the next bigger challenge. The weeding out of waste and inefficiency in Medicare to fund for the plan, while protecting the benefits of the elderly, is not an easy task. Nevertheless, it is admirable for Obama to boldly take up this cause instead of making the politically or financially safe move to stick to the status quo. He mentions that the issue of health care is no longer just a material concern, but a moral one. True, we are not always aware of how big a difference it makes to give other people the means to afford life when they are losing it. And finally, while Obama’s plan of making health insurance accessible to everyone is grounded on noble intentions, it is obviously not a win-win plan. In fact, there may never be a win-win plan. There will be gains, but there will always be costs, and the debate goes on. What’s left for the Americans to decide is whether to trust their President or not. If I were an American citizen though, I would be willing to give it a shot.
