Health-Plan Guru On Obama: Almost There

The reaction is in from a leading proponent of universal health care coverage to Barack Obama’s recently announced proposal to reform American health care. The verdict: nice plan – too bad it doesn’t go further.

Jonathan Gruber, an MIT economist who helped develop the health care plans of John Edwards and Hillary Clinton as well as Mr. Obama, said that while the proposal unveiled by the Obama campaign on May 29 makes strides in making insurance more accessible and affordable, its lack of a requirement to make insurance obligatory for all Americans would mean that many of the people currently without coverage would stay that way.

“My estimates are you can’t even get half way to universal coverage without some mandate,” said Mr. Gruber. “Even when it’s affordable, healthy people won’t take it.”

Mr. Gruber, who played a key role in the formation of the ground-breaking plan in Massachusetts to provide universal coverage, said that he convinced then-governor Mitt Romney to move to a mandate system in part by showing him that it would be the only way ultimately to insure a significant chunk of the uninsured population.

“The only benefit is the freedom of individual choice,” he said of Mr. Obama’s plan.

From the point of view of a champion of universal healthcare, that is a significant shortcoming.

Mr. Obama’s long-awaited proposal for overhauling the national health care system – it was the most far-reaching and significant domestic policy proposal from him in the race to date – was very much in keeping with the moderate, deliberately unspectacular tone of his overall campaign.

The plan he unveiled this week has the goal of covering nearly 45 million uninsured Americans and improving the overall efficiency of the system, but it hinges on the simple-sounding assumption that uninsured people wish to be insured. A health policy staffer on the campaign, speaking on background, explained that it is one of Mr. Obama’s core beliefs that that people will buy insurance if they can afford it.

The idea that people will voluntarily seek insurance if it is made affordable to them has emerged the clearest fault line between Mr. Obama’s plan and that of his rivals in the Democratic presidential primary. A plan put forward earlier by Mr. Edwards requires by law that every American be insured. Mrs. Clinton’s plan, which will be unveiled in the coming months, is expected to include a similar mandate.

“The biggest blaring difference is Edwards said that when it is affordable you have to have it. All businesses have to contribute and once it’s affordable, you have to participate,” said Dr. Jon Cohen, the former Chief Medical Officer at the North Shore-LIJ Health System. “Obama does not say that. He says that every employer has to purchase at some level, but he does not mention an individual mandate. So the question is, when it is affordable, how many people will actually purchase it and take the option. And that’s been a policy debate that has been going on a long time.”

Mr. Obama’s decision surprised some health care policy experts, who say they assumed that the issue of requiring coverage for all Americans had already been put to rest among the Democrats running for president.

“It seems as though it is the price of admission into the Democratic nomination process to have a proposal for universal coverage,” said Paul Ginsburg, president of the Center for Studying Health System Change, a non-profit, non-partisan research group.

When asked why Mr. Obama had only put forward a plan that provides for universal access without requiring universal coverage, Mr. Ginsburg said he was “a little baffled.”

Still, many of the same health care experts say that Mr. Obama’s plan would, if enacted, be a vast improvement over the current system.

The plan introduces mechanisms to drive health care prices down to levels for disadvantaged customers whose buying power would be boosted with government subsidies. The insurance companies would join a regulated pool where they would compete for the new, subsidized, clients and, according to the plan, “insurers would have to issue every applicant a policy, and charge fair and stable premiums that will not depend upon health status.” Enrollment would be made sufficiently painless, the idea goes, that everyone will eventually sign up.

Mr. Edwards’ plan, by contrast, aims to create a public-private competition structure in which private companies compete against Medicare to drive down prices. And every person able to afford insurance will have to buy it.

Mrs. Clinton’s first effort to reform health care in the early 1990’s, as all of this year’s Democratic candidates are acutely aware, was doomed by an excess of detail and lack of transparency in the drafting stage. And more recently, John Kerry’s pragmatic-sounding health care reform proposals — they included a provision advocated this year by Mr. Obama for the government to aid small businesses when they incur exceptional health care costs — were drowned out during the 2004 campaign by the debate over Iraq and, of all things, Mr. Kerry’s Vietnam War record.

Mr. Gruber, who likes the Edwards plan best of the ones presented so far, said that the Obama plan is nevertheless as sign of how much progress there has been since then.

“If you think about how far we have come since 2004, that [the Obama plan] gets viewed as modest is already stunning,” said Mr. Gruber. “That’s a really fundamental change in the insurance environment. So let’s not be too hard on the man.”

Health-Plan Guru On Obama: Almost There