Obama unveils plan to insure all Americans

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By Ed Tibbetts | Wednesday, May 30, 2007 12:03 AM CDT | () comments

IOWA CITY — Democratic presidential candidate Barack Obama pitched a health-care plan here Tuesday that he says will cover all Americans by 2012 and reduce premiums for the typical American family by $2,500 a year.

The plan would expand federal control over private insurers, force them to disgorge profits in markets where there is little competition and offer Americans access to coverage via a “national health insurance exchange.”

There, Americans would have the option to choose among private plans that would have to meet certain standards as well as a new public plan open to people who cannot get insurance from work or the government.

All but the smallest businesses would have to provide coverage to their workers or pay into a fund, but there would be no broad mandate that all individuals obtain insurance, a requirement of some state-initiated plans.

All children would have to be covered, however.

“In the richest nation on earth, it is simply not right that the skyrocketing profits of the drug and insurance industries are paid for by the skyrocketing premiums that come from the pockets of the American people,” Obama said at a research facility at University Hospitals here.

Obama is the second Democratic presidential candidate to propose a major health-care plan.

John Edwards, the former U.S. senator from North Carolina, already has done so, proposing a plan to achieve universal coverage by 2012.

Edwards’ plan, among other things, requires individuals to get insurance, which he considers a key ingredient to achieving universal coverage.

“Any plan that does not cover all Americans is simply inadequate,” Mark Kornblau, an Edwards spokesman, said Tuesday.

U.S. Sen. Hillary Clinton’s campaign also issued a statement with a suggestion that Obama’s plan may not achieve universal coverage. Obama’s campaign dismissed the claims, insisting its plan would, indeed, cover all people by 2012.

About 45 million Americans are not insured, including 9 million children.

Obama said his plan was inspired in part by stories of Iowans facing high health insurance premiums.

Amy Chicos, a 39-year-old Decorah woman whose husband, Lane, was diagnosed with cancer 20 years ago, is one of them. The Chicos’ insurance premiums are now more than $1,000 per month.

Cost savings are important to them.

“That’s what we need,” she said.

Improved disease management, better coordination of care and other steps would account for about two-thirds of the savings in Obama’s plan, with the rest coming from inducing greater competition via the national health insurance exchange, the campaign said.

Another $77 billion in annual savings could be achieved by investing in new information technology, the campaign added.

A key component of Obama’s plan would sharpen government investigations of insurance companies’ competitive practices. And in markets where they are deemed not competitive, a cap would be placed on administrative charges.

The plan also proposes that the government help businesses with the health-care costs of their sickest workers.

Obama’s campaign estimated the cost of his plan at $50 billion to $65 billion a year, to be paid for by the Bush tax cuts for Americans with incomes of more than $250,000 when those cuts expire.

Karen Ignagni, president and chief executive of America’s Health Insurance Plans, an industry group, responded to Obama’s plan by saying that insurers have pioneered many of the disease management steps he is proposing.

Achieving universal coverage has long been a goal of Democratic presidential hopefuls. But Obama’s emphasis on cost savings is bound to appeal to people who have insurance but still have seen their costs skyrocket.

Premium costs went up 87 percent between 2000 and 2006, according to the Kaiser Family Foundation.

The insurance industry, however, says the rate of growth has been slowed in the past several years.

Ed Tibbetts can be contacted at (563) 383-2327 or etibbetts@qctimes.com.