Health Reform the 2008 Election Jonathan Oberlander University

Health Reform & the 2008 Election Jonathan Oberlander University of North Carolina-Chapel Hill Russell Sage Foundation

Health Policy Hero

The U. S. Health Care System • 46 Million Uninsured (including 8 million children) • Average Cost of Health Insurance, 2007: $4, 500 (individual) $12, 100 (family) • Percentage of U. S. companies providing health insurance: 2000 69% 2007 60% • Uneven Quality of Care (Americans get recommended medical care only about 50% of the time)

Without Health Benefits, A Good Life Turns Fragile New York Times March 5, 2007 “She tried to buy a policy in the individual insurance market, but — having had cancer — could not obtain coverage, except at a price exceeding $27, 000 a year, which was more than she could pay. ”

When Health Insurance is Not a Safeguard New York Times, October 23, 2005 “Zachery Dorsett's parents thought their son was an average child who was having trouble getting over a passing illness. He was 7 months old, and it was his second case of pneumonia… But Zachery, who was eventually found to have an immune system disorder, kept getting sick, and the expense of his treatment - fees for tests, hospitalizations, medicine - kept mounting, eventually costing the family $12, 000 to $20, 000 a year… Earlier this year, the Dorsetts stopped making mortgage payments on their ranch house, because they could not afford them. In March, they filed for bankruptcy. ”

How Do John Mc. Cain and Barack Obama Propose to Fix the Health Care System?

Obama Plan • Modified Employer Mandate (small business exemption + subsidies) • National Health Insurance Exchange (subsidized coverage) • Regulation of Insurance Industry • New Public Insurance Program • Individual Mandate for Children • Bottom Line: Expands Coverage, Needs Financing*

Mc. Cain Health Plan • Eliminate Tax Exclusion for Employer-sponsored Insurance • Refundable Tax Credits ($2500 and $5000) • Encourage Individual Purchase of Insurance • Deregulate Insurance Market (Insurers Can Sell Across State Lines) • Guaranteed Access Plan (High Risk Pool) • Bottom Line: Has Financing, Doesn’t Expand Coverage Much* *My thanks to Jon Gruber for this formulation

Political Challenges Democrats • Employer mandate • Regulate insurers • Enact new Medicarelike government plan Republicans • Tax health insurance benefits • Move away from employer-sponsored insurance

Obstacles to Reform • • • Power of the Status Quo Congress & 60 Votes Budget Deficit Limits of Consensus Agenda Competition

What Happens After the Election?

We Have Failed at Health Reform Before: Is Anything Different This Time? • • • Ask Me After the Election Problems Are Worse Reformers Are Smarter Business Role Signs of Bipartisanship? Ron Wyden Bob Bennett Steve Burd

Washington, DC: January 2009 “Mr. President. I Know It’s 3 AM. But Here’s How to Pass Health Reform. ”

Memo to the Next President • • Time is not on your side Make the economic case Persuade the insured Explain costs of not reforming the health care system • Don’t forget that improbable is not impossible