Newspaper article The Christian Science Monitor

Obama Health Care Plan: He Needs to Cut Medical Costs First

Newspaper article The Christian Science Monitor

Obama Health Care Plan: He Needs to Cut Medical Costs First

Article excerpt

The Obama health care plan includes a policy shift toward price controls on insurance rates. That wouldn't be necessary if Congress first contained medical inflation.

After more then 13 months in office, President Obama has finally put his healthcare proposals on the table, posting specific details on the White House website.

Why the long wait?

For one, the House and Senate have been stymied in reconciling big differences between their own bills.

Second, there is less public appetite for the pending healthcare bills. Mr. Obama needed to show his cards if he expects passage of any bill this year.

Also, Obama can't very well negotiate a compromise with Republicans at Thursday's healthcare "summit," or later, if no one knows the details of his ideas.

And details matter, not just because of healthcare's complexity but also because Obama keeps changing his tune on healthcare.

He once favored a federal takeover of healthcare insurance (or "single payer" system) before he agreed to keep the employer-based insurance system.

He once opposed the idea that every American now without insurance be required to buy it - until he favored this "mandate."

He once wanted a government-run health insurance entity (the "public option"), until he said it wasn't necessary.

And now, with his detailed plan public, he is suggesting that he doesn't really believe his healthcare reform will end up reining in medical inflation.

He once promised that universal coverage and other reforms would "bend the curve" on rising costs within the medical and insurance industries. But in implicit admission that such reform probably wouldn't bring enough savings, he proposes the creation of a seven- member federal board - the Health Insurance Rate Authority - that would bluntly set price controls on rate increases in health insurance.

In other words, don't expect much savings from the Obama plan, and so government will need to keep a cap on insurance premiums.

Insurance companies are easy political targets but they are not the main drivers of medical inflation. The causes are more fundamental, from Americans living longer to ever more costly medical procedures to too few incentives for consumers to control costs. …

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