The ObamaPlan - Can di date s ' P l an s The Obama Plan:...

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The Obama Plan: More Regulation, Unsustainable Spending If the economic incentives that drive spending growth are not addressed, any savings gained through Barack Obama’s proposed reforms will disappear. by Joseph Antos, Gail Wilensky, and Hanns Kuttner ABSTRACT: The health reform plan put forth by Sen. Barack Obama (D-IL) focuses on ex- panding insurance coverage and provides new subsidies to individuals, small businesses, and businesses experiencing catastrophic expenses. It greatly increases the federal regula- tion of private insurance but does not address the core economic incentives that drive health care spending. This omission along with the very substantial short-term savings claimed raise serious questions about its fiscal sustainability. Heavy regulation coupled with a fallback National Health Plan and a play-or-pay financing choice also raise questions about the future of the employer insurance market. [ Health Affairs 27, no. 6 (2008): w462– w471 (published online 16 September 2008; 10.1377/hlthaff.27.6.w462)] O nceaga in ,healthcarereform is taking a prominent place in an American election. Although concern about the economy has reduced the relative importance of health care for the public—to number three in Feb- ruary and number four in June—the issue remains a serious one for the country. 1 The fundamental problems of cost, quality, and the uninsured are well known. Al- though there is wide agreement that these are serious concerns, there is less agree- ment about which problems are more important and what should be done. The health reform plan put forth by Sen. Barack Obama (D-IL) during the 2008 presidential campaign focuses on expanding insurance coverage, providing a vari- ety of subsidies to individuals and small businesses, and expanding eligibility for Medicaid and the State Children’s Health Insurance Program (SCHIP). 2 It greatly increases federal regulation of private insurance, including what benefits must be offered by all insurance plans, but it does not address core economic incentives w462 16 September 2008 Candidates’ Plans DOI 10.1377/hlthaff.27.6.w462 ©2008 Project HOPE–The People-to-People Health Foundation, Inc. Joe Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute in Washington, D.C. Gail Wilensky ( is a senior fellow at Project HOPE in Bethesda, Maryland. Hanns Kuttner was, until recently, a senior research associate at the Economic Research Initiative on the Uninsured at the University of Michigan in Ann Arbor. Wilensky is a volunteer adviser to the McCain campaign.
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that drive health care spending. The plan does not promise universal coverage, and it does not include a mandate on everyone to purchase insurance, which was cen- tral to Sen. Hillary Clinton’s (D-NY) plan during the Democratic primary. The one group for whom there is a mandate is children—actually, a mandate on parents to purchase coverage for them or enroll them in a government health program.
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The ObamaPlan - Can di date s ' P l an s The Obama Plan:...

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