President Obama’s Budget: Cheers for Health,
Down Payment on Health Reform

February 27, 2009

President Obama is using his new budget as a bully pulpit for health care reform, an encouraging sign in itself that he will exert leadership to keep the issue moving. It supports critical programs that will make a difference for people’s health, including new initiatives in clinical care and public health, and programs that will reduce income inequality. But the budget is still in the “down payment” stage towards transformational health reform, that would cover the nation’s 47 million uninsured, and make the system affordable for the future.

The economic crisis demands that we get a grip on health care costs, which have grown twice as fast as wages. And lower costs can go hand in hand with better quality of care and universal coverage. The President’s proposals, as reflected in the budget, while headed in the right direction, don’t quite get there. The budget takes modest steps towards improving clinical care. And it reduces excessive payments to private health insurance plans in the Medicare Advantage program, where the federal government already has the greatest leverage. But it doesn’t take on wasteful practices by insurance companies in the private sector, a key driver of costs.

The President offers a new and complex program that might or might not work, creating a Medicare-like backup plan to cover the uninsured and possibly others. In the present dire economic circumstances, it would be quicker and more effective to expand who is covered under Medicare, Medicaid and other public programs. Only the public sector has the clout and resources to assure that everyone is covered, and to negotiate successfully with powerful health care interests, including drug companies and medical device companies. Medicare already has administrative costs licked, and is geared towards covering a large national population that uses lots of health care: the elderly and disabled. Medicare and Medicaid have been under attack, but Congress is moving forward to address problems with underfunding and privatization in Medicare, and eligibility issues in Medicaid. Ready legislation (H.R. 676, H.R. 193) describes in detail how we can move from here to there.

The Administration has carefully nurtured and encouraged the political will for reform. Pressure and support from the public will be essential to keep it moving on the right track.

Details:http://www.centerforpolicyanalysis.org/id28.html