Raising Women’s Voices

Obama Health-Care Plan Collides With Financial-Crisis Spending

Posted in Uncategorized by raisingwomensvoices on November 6, 2008

Obama Health-Care Plan Collides With Financial-Crisis Spending

By Aliza Marcus

Nov. 5 (Bloomberg) — Barack Obama made revamping the $2.2 trillion U.S. health-care system a centerpiece of his presidential campaign. He will have to make good on the promise in the midst of a financial crisis.

The Democratic president-elect wants to expand government health programs and subsidize coverage for people who can’t afford it, at a cost of up to $65 billion a year. He also would spend $50 billion a year for five years on computerized health records, technology he says would save money.

Obama has called his health-care overhaul “priority No. 2,” after energy independence. He said he will accomplish the makeover during his first term, even though the government has committed $700 billion to rescue banks and more to prop up credit markets. Fiscal and political realities may foil Obama’s ambitions, analysts said.

“We may get incremental change, but I don’t think we’re going to get substantial change,” said Paul Keckley, the Washington-based executive director of the Center for Health Solutions at Deloitte & Touche USA LLP, in an interview. “How much do you want to tweak health care while dealing with bank mortgages?”

Initially, Obama may back spending more on existing programs that subsidize care for low-income Americans, and that would provide more customers for insurers and drugmakers. He also proposes steps, such as cutting Medicare payments to insurers and letting Americans buy medicines in Canada, that are opposed by the companies.

Children’s Health

The new president may start by endorsing expansion of the state children’s health insurance program, or Schip, which subsidizes insurance for 6 million low-income children, Keckley said.

The $5 billion-a-year program must be reauthorized by the end of March, and Democrats who control Congress have said they will push again to add 4 million children, legislation that was twice vetoed by President George W. Bush last year. The rejected measure would have increased tobacco taxes to raise $35 billion over five years.

Expanding Schip and possibly Medicaid, the U.S. health insurance plan for the poor, would benefit insurers that run the plans, said Carl McDonald, an analyst with Oppenheimer & Co. in New York, in an e-mailed response to questions. Indianapolis- based WellPoint Inc. and UnitedHealth Group Inc., of Minnetonka, Minnesota are among providers.

Insurers may be hurt if Obama keeps his campaign promise to cut $15 billion that he says the companies just “skim off” of payments for Medicare Advantage, government insurance for the elderly provided through the companies. UnitedHealth and Humana Inc., of Louisville, Kentucky, are the biggest participants in the program, expected to cost taxpayers $100.1 billion this year….

For the complete story, please visit: http://www.bloomberg.com/apps/news?pid=20601087&sid=alGo5teZDSaI&refer=home

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