Wednesday, September 9, 2009

The Obama Plan

The White House has finally laid down the specifics of its healthcare plan for the country.

It is very long on the benefits - complete coverage, protection of existing benefits, anti-discrimination,.... It is very short on how it will all be paid for - pay-as-you-go, vague references to cost savings, malpractice reform, downloading costs to 'large' employers (those with more than 50 workers). Its not a very reassuring plan. There are no specifics on what will be cut. Healthcare cost is a systemic problem and if tackled piecemeal will merely result in the shifting of costs to other players without representation in Congress (such as the doctors). Therefore, any cost saving initiatives will likely occur in the distant future, if at all.

Given that the benefits are immediate and must be paid for without increasing the deficit, the most likely scenario is an increase in taxes and a massive hit on small and medium sized enterprises, which the Small Business Administration defines as under 500 employees. No matter how you cut it, this is socialized medicine and the most sweeping 'spread the wealth' program ever to emerge from the White House since FDR.

No wonder the electorate is not convinced. An honest plan must include the following: caps on the punitive portion of malpractice awards to under $10,000; drug formularies that mandate the use of generics where they exist but will pay full price otherwise; mandated profit margins that cover the cost of capital for insurance companies (effectively turning them into public utilities); preventive healthcare requirements (and benefits) to qualify for coverage (smoking cessation, weight control).

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