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What Is Obama's Health Care Reform Plan?

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What Is Obama's Health Care Reform Plan?
Question: What Is Obama's Health Care Reform Plan?
Answer: President Barack Obama's health care reform plan became law in 2010 as the Patient Protection and Affordable Care Act, more commonly known as Obamacare. The mandate to require everyone to buy health insurance was legally challenged. In 2012, the Supreme Court ruled that the Federal government had the Constitutional right to tax those who didn't purchase insurance, therefore upholding a key component to make health insurance affordable for all.

Obama's plan to reform health care is to lower costs by making health insurance affordable for more people. This allows more of them to get preventive care, avoiding the high costs associated with emergency care. It also subsidizes medications for the elderly, so they can successfully treat their chronic illnesses. These subsidies are paid for by taxes on higher income families and some health care providers, and by requiring young and healthy people to pay health insurance premiums.

Obama Plan to Reform Health Care

Obama initially announced plans to reform health care as part of his 2008 Presidential campaign platform. His initial proposal was centered around a publicly-run program similar to that enjoyed by Congress, the Federal Employees Health Benefits Program (FEHBP). Obama's goal has always been to lower health care costs while improving the quality of life for those who didn't receive health care insurance through their jobs. (For more, see Why Reform Health Care?)

Obama promised "portable" coverage, which meant people would no longer be tied to their employer's plan, but could choose their own plan and keep it with them. They could choose the government-run "public option" or purchase their own insurance through an exchange. No one could be denied health insurance because of a pre-existing condition.

The Federal government would expand funding for Medicaid, and even provide subsidies for those who made too much to qualify for Medicaid, but could really afford insurance premiums. Despite all these benefits, many people were afraid of this intrusion of the Federal government into their lives, saying it was leading down the path toward socialized medicine. (For more details, see Obama 2008 Health Care Proposal)

Once in office, Obama sent his proposal to Congress. Obama's 2009 health care plan promised to reduce the nation's health care costs by 1.5% a year by using the Federal government's buying power to negotiate lower medical bills.

However, the "public option" was met with significant resistance, even fear. Many people thought this meant that the Federal government would dictate what kind of health care coverage they could get. Those who were happy with their existing health insurance were afraid they'd have to give it up, even though this wasn't true. Others were concerned about a proposed expert government panel that would determine what would be covered by new insurance plans (including government-sponsored ones) and what would not. Conservatives were especially worried that the government might decide to pay for abortions that wouldn't require any documentation or permissions for underage girls. Last but not least were objections to the cost and what it would do to the budget deficit. (For more, see Opposition to Obamacare)

President Obama's purpose was to initiate discussion, which it certainly did. In fact, Obama's 2009 health care reform plan inspired Congress to develop its own plans. First out of the box was the House bill, which was approved on November 8, 2009. It retained Obama's public option. It also increased coverage for the Medicare prescription drug program, and increased Federal funding for state-run Medicaid programs. It also shifted health insurance industry regulations from the state to the Federal government.

Next, the Senate bill was approved on December 24, 2009. This was similar to the House bill, but substituted a state-run health care insurance exchange instead of the Federally-managed public health care option.

The confusion and complexity between all the proposals created much rumor-mongering, which led to myths about what was being proposed. For example, the House bill ensured coverage for an "end of life" counseling session for seniors who wished to discuss this with their doctors. This was interpreted to mean that the government would mandate that seniors have these discussions on how to end their life sooner, heading down a "treacherous path toward government-encouraged euthanasia." (Source: CBS News, Top Ten Myths)

Both bills were to be merged before being sent to President Obama for signature. However, they stalled on January 26 2010 when Democrats lost their filibuster-proof 60-vote majority in the Senate, when Republican Scott Brown won Ted Kennedy's seat in Massachusetts. Despite this seeming setback, on March 30 2010, President Obama signed into law the Reconciliation Act of 2010 (H.R. 4872) which combined elements of the Senate and House bills. It kept a state-regulated insurance exchange, and restrictions on federal funding for abortion, but cut back taxes on high end health plans. It increased the Medicare payroll tax on upper-income earners and added Medicare taxes on investment income. Those with pre-existing conditions who had been denied coverage would also get access to temporary health insurance coverage until the exchange is set up.

This became the Affordable Care Act, which significantly changed health care by making insurance available to 32 million more Americans, or 95% of the legal population. Over the first 10 years, the Act would cost $940 billion. However, these costs would be offset by decreasing costs in the higher education loan program and increasing revenues from taxes on high income households. Over ten years, the Act would actually reduces the deficit by $138 billion

More on Obama's Plan to Reform Health Care

(Article updated July 11, 2013)
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