Obama and His Health Care Plan

2009-09-10 by

Today TaxMama wants to summarize the high points of President Obama’s Health Care speech last night.

Dear Family,

You can read the text of the President’s speech using the link in the Resource Box below. Print it out and analyze it to your heart’s content .

Obama has three basic goals:
· To provide more security and stability to those who have health insurance.
· To provide insurance for those who don’t.
· To slow the growth of health care costs for our families, our businesses, and our government.

Details:

· If you have insurance coverage through your job, that will not change:
... o Insurance companies will not be able to deny you coverage because of pre-existing conditions, or presently being ill.
... o Insurance companies will not be permitted to water down your coverage in the middle of treatment for critical illnesses – which has caused the death of some people in the past.
... o Businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers.
......§ 95 percent of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. That’s nice, but it won’t help their employees much, wil it?

· Folks who don’t presently have health insurance will have affordable choices:
... o There will a health insurance exchange offering competitive prices.
... o There will be tax credits to help those who cannot afford even those lower rates. (How will we be paying for this?)
... o However, just as with auto insurance, buying coverage will be mandatory for all Americans.
... o Those who still cannot afford any coverage whatsoever and cannot get it work will get a hardship waiver.

·The overall plan will take 4 years to implement.
... o In the meantime, there will be low cost coverage for those with pre-existing conditions to cover the costs of catastrophic illnesses without bankrupting individuals.

The President did not specifically mention portability as part of the plan – being able to take your coverage with you when you leave a job. He implied it. But when you don’t specify something, it may not end up in the plan.

He insists that this will be revenue neutral, that the plan will pay for itself through cost savings, the reduction of waste and the focus on wellness care, rather than wasteful procedures recommended simply to avoid malpractice issues.

Read the President’s remarks, using the link in the Resource Box below, and tell us what do you think? Can it be done?

And remember, you can find answers to all kinds of questions about health care and other tax issues, free. Where? Where else? At TaxMama.com.

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President Obama's Speech on Health Care Reform

# | Posted in Tax Quips | Comments » (8)



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  1. chris.frizzell Says:
    September 10th, 2009 at 07:18 am

    I listened to the president’s speech with bated breath. I was under the impression that he would clarify his plan so all Americans could understand and join with him on his crusade. Unfortunately he was vague on the points that mattered. The president’s plan is not deficit neutral, Washington always under budgets when looking at the costs of a new plan. Unless he cuts Medicare spending, i.e. benefits, and increases taxes there is no mathematical way it is neutral. It looks like this yet another example of washingtons new math. I see the some major issues with the presidents conclusions of where the problems lies. He believes the problems lie with the insurance companies, if that is true, it could only be caused by a lack of competition and over billing by hospitals. When looking at the profit margins of insurance companies over any five year time period they do not realize much more than a 12% profit margin. The president wants to increase competition, I think the way to increase competition is to remove restriction and allow all insurance companies to compete in all states. There are over 1300 health insurance companies in the U.S., Let them fight over my business. I guarantee the prices will come down. Ronald Reagan said government is not the solution it IS the problem. The results of the Presidents health care initiative will be felt nationwide. Because of the penalty portion of the Bill the small and medium buseness employers would rather pay the fine than to pay for the insurance coverage. Its a busieness decision not a moral one. This will cause the 5% that the president thinks will join the government plan to be closer to 25% and steadily climb after that. But I have a business question for the President, If the government is running a health insurance company and that insurance company does not have to operate at a profit and is paying my medical bills, what happens when the U.S. can’t borrow any more money and is broke? We currently have a $10 Trillion deficit and is ever climbing. I won’t lend money to a company that is bankrupt and neither will China. I think Health insurance reform is needed but the plan that the president laid out is not the right one.

  2. Mary Dahlberg, EA Says:
    September 10th, 2009 at 08:08 am

    President Obama's Speech – Points that mattered to me:

    1. It will be against the law for insurance companies to deny coverage,drop your coverage,and no arbitary cap on amount of coverage.

    2. New insurance exchange, a marketplace where individuals and small businesses will be able to shop for health insurance at competitives prices, because we will not be limited to insurance companies like Alabama that has one company insure almost 90% of the state. How does this happen? This is how congress gets affordable insurance they have a pool of health insurance companies to pick from.

    3. Everyone must have insurance. This along should bring down prices. We are now paying for those who do not have insurance as they can not be refused service at the hospital ER. Small busineses with a narrow profit margin will be exempt. Mc Cains idea to give tax credits for the people who can't afford it? Were will they get the money meanwhile, but we have to start some were.

    The senior citzens I talk to are happy with Medicare. In the early 60's when Ted Kennedy pushed for Medicare people were calling it socialism and were afraid. Look at it now.

    Cost – President Obama stated he would not sign a bill that would add to our deficit. He feels the plan will be paid for by savings within the existing health care system which is full of waste and abuse. Cut out unwarranted subsidies in Medicare that go to insurance companies. Create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead. He states his plan will cost around $900 Billion over 10 years, less than we have spent on the Iraq and Afaghanistan wars, and less than the tax cuts for the wealthiest few American that Congress passed about 8 years ago. Also by slowing the growth of health care cost by 1/10 of 1% each year, it will reduce the deficit by $4 trilllion over the long term.

    It is a shame that the US is one of the wealthest countries and we let people die because they are denied health care. The insurance companies should not be allowed to be a death pannel.

  3. John Hartert Says:
    September 10th, 2009 at 08:24 am

    The biggest problem with the President's plan is affordability. He hasn't convinced me that he can pay for his reforms. It certainly is not deficit neutral. If there is so much fraud and waste in Medicare and Medicaid, most of that would have been done already. Any low hanging fruit has already been picked. We still need more specifics on his cost containment plans. Tort reform is needed and should be included in any plan. The President tried to throw a bone to the Republicans by offering to do a study case on it. We know this would help drive down doctor's costs and help minimize defensive tests and procedures. Overall, on the most important speech on this subject, the President didn't really provide anything new nor the specifics to win over the independents.

  4. Hank Pinto Says:
    September 10th, 2009 at 09:03 am

    I thought tax people were, above all, logical. However, it defies logic that we're going to cover millions more, with the same number of doctors/hospitals/care facilities, it it will bring the cost down. ??? If we will pay for some/most of it with efficiency improvements, why not implement the efficiency improvements NOW – without a bunch of new laws? ??? If, as the bill is written, part of it will be paid with $50 billion in Medicare REDUCTIONS, how will that NOT effect current Medicare services? ??? Convince me that a bureaucratic Medical Evaluation Panel is different that a Hospice Chute? ??? Convince me that ONE government program ever cost what the bureaucrats projected it would cost? By even at TWICE the dollars projected? ???
    Convince me that the wonderfully successful Medicare program is nothing less than a tremendous UNFUNDED LIABILITY of the U.S. Govt about ready to explode further with the coming eligibility of the Baby Boomers? ???
    I could go on, but logical thinkers, like tax people, should start to get the idea.

  5. Kathleen Says:
    September 10th, 2009 at 01:17 pm

    This speech was supposed to provide clear direction to our legislators. Pres. Obama did not say anything that we haven't heard before.

    There are some significant flaws in the speech:

    1. He said that this will not add one dime to the deficit. That doesn't mean it is tax-neutral, which several people seemed to think.
    2. He speaks of using an insurance exchange. This is not a proven solution. If we are going to bet the farm on something unproven, we had better have specifics.
    3. He did not promise to veto any bill which contains one dime of pork. This is a campaign promise that has been pushed to the side. 1000-page bills are replete with pork every time.
    4. We cannot pay for health care with savings from Medicare. Let's be realistic: Medicare is close to bankruptcy, so we shouldn't pretend that this is a government-run program that is efficient and effective. Doctors certainly are not over-paid. Will savings from Medicare Advantage programs be sufficient to save Medicare AND pay for universal healthcare? I don't think so.
    5. I agree that everyone should be insured; without that, we cannot expect insurance companies to eliminate pre-existing conditions without huge premium increases. What is the "or else"? If someone becomes ill and doesn't have insurance, are we going to turn them away? This simply hasn't been thought through.
    6. We can make an excellent start in subsidizing premiums for the poor by making a public option profitable by law. A small profit, e.g., 10%, would help greatly in paying the subsidies and removes part of the argument against a public plan. Further, most government-run organizations are bloated, bureaucratic entities because they don't have to explain their costs or make a profit. Run it like a real business.

  6. Norman Says:
    September 10th, 2009 at 03:22 pm

    To TaxMama, regarding Kathleen Says:
    September 10th, 2009 at 01:17 pm:"

    If you haven't got the message now, when will you?

    Obama has already broken so many campaign promises, who are you to say he will not break some more?

  7. aaron crowe Says:
    September 11th, 2009 at 01:13 pm

    Health care or not, I’m partisan to a president that can lower my taxes and fix what the housing market “greed” created… Just get the job market back up and avoid more scams…including “communism”

  8. Jim Says:
    September 11th, 2009 at 08:20 pm

    The truth is that this is a complex problem, and most people want simple answers. The savings that will come from a national health plan will certainly hurt someone. Probably insurance companies. The economist in me says that all government regulation is bad for consumers. Unfortunately, with freedom comes greed. So, in many cases, the consumers need protection – in the form of regulation. That increases costs. We have to hope that our elected officials are selflessly working to make things better for US. So, it is up to them (in representing us) to balance the scales. All we need are some public minded selfless officials, who will do the right thing by US. Unfortunately, they have a very hard time getting elected. Who do WE tend to elect? Those who get the biggest barrel of pork.
    Bonus questions for those who think the program costs too much:
    1) What happens if no plan is approved, and we continue with the plan we have? (think rising costs)
    2) What do we do about all of the uninsured Americans who are (right now) using the nearest emergency room as their health care option? (No one talks about this any more. Check with your local hospital, and ask how much they spend on uninsured ER patients.)

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