Wednesday, October 21, 2009

What is Obama Health Care Plan for 2009 ?

The American health insurance scene desperately needs reform. In a nation where over 15% of the population were without health insurance in 2008 and 16% of the gross domestic product is spent on health care, everyone agrees that change is necessary. The nature of that change, however, is up for debate. Those on the left advocate a single-payer approach that would cover all Americans, while those on the right champion private options such as health savings accounts and competition among health care providers. President Obama frames his plan as a middle of the road approach which would require coverage for all Americans, keep costs affordable, and ensure that coverage cannot be denied based on pre-existing health conditions.

The first aspect of President Obama's plan makes health insurance a requirement rather than an option. The reasoning behind this idea is that those who can afford to buy coverage but choose not to place a drain on the system by visiting emergency rooms for unexpected injury or illness and taking advantage of taxpayer money to cover the cost of the visit. Requiring everyone to purchase health insurance would create a larger pool of funds to draw from in order to cover the cost of the overall health care plan. Fines would be imposed on those individuals or businesses who chose not to purchase health insurance coverage. Those who cannot afford private insurance coverage would have access to a public option as well as a tax credit based on need. Critics say that fines levied on businesses would be passed on to consumers and would be the equivalent of a tax increase paid, not by the business, but by customers. They also point out that fines levied on individuals who cannot or choose not to purchase insurance are the equivalent of a tax on people making less than $250,000 a year, something Obama promised not to do in his campaign.

The second goal of President Obama's healthcare plan is to create an insurance marketplace that would provide affordable insurance options and healthy competition. Private insurance companies could participate and the opportunity to gain new customers would be the incentive for doing so and for keeping costs down. Opponents of this aspect of the plan claim that private insurance companies could not hope to compete with a government option and would therefore eventually be driven out of business, placing all health insurance care under the public option umbrella.

Third, President Obama hopes to ensure coverage for all Americans by eliminating the possibility for insurance companies to deny coverage based on pre-existing health conditions as well as doing away with caps on lifetime coverage amounts. He would also limit what consumers can be required to pay out of pocket for care. While many champion this part of the plan as providing fair and equal access to healthcare for all Americans, critics point out that it would do away with any incentive for consumers to monitor their health care consumption, in turn causing costs for insurance companies to skyrocket. Many private companies would be forced out of business, again placing more health care under the government's oversight.

Without a doubt, health care in America needs reform. Costs continue to increase and people die due to lack of coverage. Whether President Obama's plan will meet the need or not remains to be seen as Congress gears up for health care debate.



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