Obama Wins: What It Means for Health Care

Experts Say Financial Crisis Could Affect Obama's Plans for Health Care Reform

Medically Reviewed by Louise Chang, MD on November 04, 2008

Nov. 5, 2008 -- Tuesday's election of Democrat Barack Obama ushers in a new administration that is all but certain to include some level of health care reform. Less clear is how extensive that reform will be and when it will come.

The Illinois senator has proposed sweeping changes in the health care system designed to provide health coverage to millions of uninsured Americans.

But experts tell WebMD that the current financial crisis makes sweeping change unlikely any time soon.

"I have no inside track, but I would bet that in this economic climate it is far more likely that changes will be phased in over time," says Karen Davis, president of the health policy and research group Commonwealth Fund.

University of Michigan health economist Thomas Buckmueller, PhD, agrees that the economic climate is likely to slow reform. "I am not extremely optimistic that major reform will happen, but this seems to be the best chance we have had in a long time."

Obama's Health Plan

Obama spoke often during the campaign about his mother's battle with ovarian cancer to illustrate his commitment to changing the health care system.

He told of her final days, spent battling insurance company bureaucrats who did not want to pay for her cancer treatments. "I know what it's like to see a loved one suffer, not just because they are sick, but because of a broken health care system," he said at a rally last week and at countless campaign stops before that.

His plan would extend health coverage by expanding existing private and public programs with the help of federal subsidies and mandates.

He has repeatedly claimed the reforms will lower the average family's health insurance premiums by about $2,500 a year.

These reforms include:

  • Requiring employers, except small businesses, to provide health insurance to their employees or contribute to the cost.
  • Requiring that all children have health insurance.
  • Expanding Medicaid and the State Children's Health Insurance Program (SCHIP).
  • Creating a National Health Insurance Exchange to pool risk and give people the choice of competing private or public health plans.

According to the Tax Policy Center, a nonpartisan tax analysis group, the president-elect's plan, if fully implemented, would reduce the number of uninsured Americans from a projected 67 million to 33 million over the next decade at a cost of $1.6 trillion.

Obama has said he would pay for his plan by rolling back President Bush's tax cuts on people making more than $250,000 a year and keeping the estate tax at 2009 levels, but he has not been more specific. He has not provided a timetable for seeking his proposed reforms and has not said if he would present a comprehensive health care reform package or try for incremental change.

Expansion Likely for State Children's Health Insurance Program

Experts interviewed by WebMD agreed that expansion of the children's insurance program SCHIP is likely to be the first of the proposed reforms to be considered.

Last December, Democrats in Congress lost a yearlong fight to boost federal spending that would have expanded the program after two separate vetoes by Bush.

The program will be up for congressional review next March, and experts say it will probably be the Obama administration's first chance to make good on a health care promise.

"SCHIP is one of the big success stories in health policy over the last 20 years," Buckmueller says. "It has succeeded in getting kids the preventive care they need to keep them out of the ERs."

Medicare Reform More Problematic

Many of Obama's other proposals -- from the expansion of Medicare to his National Health Insurance Exchange -- will be much harder to win support for, even with a largely friendly Congress behind him.

Buckmueller believes the best chance for major reform lies in seeking bipartisan support for his proposals.

He says a key reason for the failure of President Clinton's 1993 health care reform effort is that his administration did not reach across the aisle. "Assuming that Obama has learned from the Clinton debacle, I think he would be wise to say, 'Here are the basic principles of my plan. You work out the details, get bipartisan support, and I'll sign it.'"

Health Spending 'Not Sustainable'

While sweeping reform may not come soon, experts contacted by WebMD agreed that the nation's broken health care system must be addressed and that this must happen sooner rather than later.

The statistics bear this out:

  • 45 million Americans have no health insurance.
  • 25 million more have health plans but are considered underinsured because their policies offer only minimal coverage, according to the Commonwealth Fund.
  • 42% of U.S. adults under age 65 are uninsured or underinsured, up from 33% in 2003.

Total spending on health care represented around 16% of the gross domestic product in 2007, and the Congressional Budget Office says spending will rise to a quarter of gross domestic product by 2025.

"We are not going to reduce health care spending," says former Congressional Budget Office Director Alice Rivlin, PhD, who is now a scholar with the Brookings Institution. "The best we can do is reduce the rate of health care spending growth. That should be the No. 1 priority of any health care reform."

If jobs are the next thing to go in the current economic crisis, as many economists are predicting, the number of Americans without health insurance will quickly increase beyond projections.

"Something has to happen over the next few years, because the cost of doing nothing is too great," Rivlin says.

Davis echoes the thought. "We can't afford to stay on the path we are on with regard to total health spending," she says. "Employers can't afford it, the government can't afford it, and individuals can't afford it. It is just not sustainable."

Show Sources


Karen Davis, president, Commonwealth Fund.

Thomas Buckmueller, PhD, professor of business economics and public policy, Ross School of Business, University of Michigan, Ann Arbor.

Alice Rivlin, director, Greater Washington Research project, Brookings Institution.

Tax Policy Center: "Presidential Candidates Tax Plans," Sept. 12, 2008.

Congressional Budget Office, health care spending, 2007.

© 2008 WebMD, LLC. All rights reserved. View privacy policy and trust info