The Obama and Congressional Plans

President Obama has called upon Congress to pass legislation that will transform the American health care system. The reforms rest upon four distinct pillars:

1. Mandates for employers and individuals
2. Subsidies for the middle class
3. Increased insurance regulation
4. A government-run health care plan, like Medicare, that will compete with private insurance.

While it appears the White House will not be putting forward its own specific plan, major components likely to emerge from Congress can be clearly identified, and include:

• Employers would be required to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
• Every American would be required to buy an insurance policy that meets certain government requirements. Even individuals who are currently insured, and happy with their insurance, will have to switch to insurance that meets the government's definition of "acceptable insurance."
• A government-run plan similar to Medicare would be set up in competition with private insurance, with people able to choose either private insurance or the taxpayer-subsidized public plan. Subsidies and cost-shifting would encourage Americans to shift to the government plan.
• The government would undertake comparative-effectiveness research and cost-effectiveness research, and use the results to impose practice guidelines on providers — initially, in government programs such as Medicare and Medicaid, but possibly eventually extending such rationing to private insurance plans.
• Private insurance would face a host of new regulations, including a requirement to insure all applicants and a prohibition on pricing premiums on the basis of risk.
• Subsidies would be available to help middle-income people purchase insurance, while government programs such as Medicare and Medicaid would be expanded.
• The government would subsidize and manage the development of a national system of electronic medical records.

Individually, each proposal could have an extremely negative impact. Collectively, they are harmful to taxpayers, health care providers, and to the quality and range of care patients would receive. CLICK HERE TO DO MORE RESEARCH AT CATO