State of the Union and Health Care Reform

Thursday, January 28, 2010

As expected, in his State of the Union speech to a joint session of Congress and the American people on Wednesday night, President Obama called for renewed bi-partisan efforts to implement health care reform in the immediate future. Stating that nothingless than national economic recovery and vitality was at stake if, as a nation, we failed to achieve the long-term control over health care costs. Singling out middle-class families he stated, “we still need health insurance reform. Yes, we do.” Directing his attention at Congress he asked Congress, “Don't walk away from reform.”

While the President has repeatedly failed to lay out a specific road map to reform, he did restate his desire for certain key features, including:

• Allow individuals to keep their own doctors and plans,
• Reduce costs and premiums for families and businesses,
• Eliminate pre-existing condition exclusions,
• Protect individuals from financial hardship,
• Protect individuals from the worst practices of the insurance industry,
• Give businesses and individuals a chance to choose affordable health care plans,
• Create a competitive health insurance market, and
• Require insurance plans to cover preventive care.
  

Nowhere in his speech did he mention “Universal coverage”, however, it seems that covering all individuals has to be included in health care reform to achieve the desired reduction in costs. Nor did he mention a “public health care option”, nevertheless, is that is what is meant by “affordable health care plans” and "competitive health insurance market".

Even with the rah-rah from Wednesday night’s speech, it is still up to the House and Senate to reconcile their two separate bills and achieve a single bill that will pass in both houses and be signed by the President. While the President continues to voice his strong support for a broad and swiping reform of the US health care system, it is to be seen whether Congress can deliver.

Most Americans appear to want some kind of reform, however, many of the recent polls have indicated that the nation is almost equally divided and skeptical on how much reform is needed. The public seems to be saying that reform is OK for my neighbor, just not with my family and health care plan. Businesses, large and small, continue to struggle with the cost of health care and their ability to provide it for their employees, yet the thought of mandated employer provided health care is dreadful to many.

As a witness to the 2006 Massachusetts health care reform, many organizations found it cheaper to pay the penalties rather than provide the required coverage. At $295 per year per employee, Massachusetts’ penalty for an employer not providing or contributing to the employee’s health care will not go very far towards purchasing a policy for an individual much less a family. Will national health care drive employers to abandon health care for employees? Will the increased cost of benefit administration and mandates force employers to rethink employer-sponsored health care plans and view individual coverage as a viable alternative? Will employer-sponsored health care plans go the way of traditional defined benefit pension plans?

At this point, all eyes are focused on the House and Senate and their efforts, or lack there of, to deliver a unified reform bill the President is willing to sign into law. One possibility remains, Congress may scale back its efforts and produce a number of piece-meal attempts directed at specific reforms on individual targets rather than one overall reform measure.