Five Major Hurdles to Pass Health Care Reform in the US

TIME Magazine has an article which list the five major problems that legislators fight with to pass the Health Care Reform.

As I have tried to discuss earlier, the question is why there should be any problems for a popular president with clear majorities in Congress to pass this bill. There are the following issues in this now 1000 page bill:

1. Curbing Costs
2. Raising Revenue
3. Coverage Questions
4. Personal Touch from the President
5. Public Perception

Curbing Costs: It is now twice as expensive per capita to insure an American compared to a Canadian. On top of this, the costs outrun inflation and the growth of the GDP. When the Swedish and Canadian Health Care systems cost 10% of GDP, the American costs 15%. What they claim in this article is that it is very difficult to see how costs are going to be reduced in the long run with the proposed bills.

Raising Revenue: It is necessary to raise $1 trillion/10 years to pay for the changes. $237bn will come from fines on employers and individuals who don't comply with new rules. $525bn will come from reductions in Medicare payments to private insurers and money ponied up from drug companies. $37bn will come from corporate and foreign tax changes. The rest of the money $200 to $320bn will have to come from some form of taxation. They have been talking about taxing only people over a certain income, i.e. $350,000 or $1m a year but there are also a number of other suggestions.

Coverage Questions: Both the House and the Senate HELP bills include a public plan that will compete with private plans which is controversial with republicans. This is to insure the 47m people now without coverage.

Personal Touch: The bill from Clinton that failed was made in secret by the president, and his wife, and delivered to Congress for approval. Therefore Obama is almost doing the reverse today and have given Congress the job of writing the bill up. There is, however, a need for input from the White House and this has failed somewhat. President Obama has paid attention to this the last week and have been active with input. Rahm Emanuel, the Chief of Staff, was also in a meeting with the Blue Dogs, fiscally conservative Democrats, this week.

Public Perception: Some people say that Obama is doing "too much, too soon" and the failure of meeting the deadline before the August break for Congress might add to these sentiments. The political wing of the Obama administration--Organizing for America--is therefore going to operate all through the August recess. Obama has 8m supporters on email lists.

As can been seen from this short summary of the article, what David Brooks and Paul Krugman said in their columns this week about going to the core of the cost problem is what must be the most important issue but also the most difficult. There has unfortunately not been any further debate on this issue in the press. The article is very vague on actual measures that would improve the cost situation. The critique becomes serious when cost reductions cannot be addressed properly and when the taxation issue is as controversial as it is.

However, deficit neutrality and reduction of the cost increases are clearly stated goals by President Obama. What is also important is that there is going to be regulations that prevents the insurers from dropping the insured when the costs become high and which will prevent insurers from not accepting the insured if they have preconditions.