US healthcare reform: Obama reforms

 

Long-term problems in US healthcare have been a driving force in Americans going overseas for treatment. Many agencies and overseas hospitals have based business plans on this continuing and increasing. If President Obama succeeds in the most dramatic reform of the US healthcare system for forty years, things could change dramatically. Senator Edward Kennedy aims to push Obama’s main domestic priority through Congress. The goal is to provide insurance to most of the nation’s 50 million uninsured, and lower the soaring cost of care.

The legislation would require all Americans to have health insurance, prohibit insurers from refusing to cover pre-existing conditions and place other restrictions on the industry including prohibiting insurers from denying coverage or charging more due to medical history. Insurers would be required to cover some preventive services. Annual or lifetime limits on coverage would be prohibited. There would be a sliding scale of federal subsidies for mid- to low-income families to help them purchase insurance. It would establish online exchanges, gateways where the uninsured and employees of small companies could shop for affordable insurance policies. Reinsurance funding would be provided for plans participating in the gateway. A new medical advisory council would establish minimum benefit levels for companies participating in the gateways. Millions of people would become eligible for state Medicaid health plans for the poor. People with incomes up to 150 percent of the poverty level would be able to get Medicaid. Incentives would be created for employers who automatically enrol workers into offered health plans.

Kennedy has held back on two provisions that are being negotiated with Republicans, creation of a government-run program to compete with private insurers and a requirement that all employers provide health benefits to workers. Republicans continue to speak out against the idea of a public option. Democrats want the proposed new public plan to be an option offered in exchanges.

Senator Conrad is circulating a proposal as middle ground on the public option issue. His plan would create non-profit cooperatives that would offer insurance policies to compete with private insurers. The cooperatives would be controlled by their members, not the government, and would be subjected to the same rules as private companies.

Obama has called on Congress to pass legislation by October to overhaul the $2.5 trillion healthcare system, aiming to cut costs and ensure that millions of Americans now without health insurance get coverage. The goal is to have new measures from 2010.

Democrats say a public plan that competes with private insurers is the only way to contain costs and keep premiums low. Republicans and insurers argue that it would drive insurance companies out of business and lead to an entirely government-run U.S. healthcare system.

It is almost certain that the Democratic-controlled Congress will pass legislation, but nobody is betting what The American Health Choices Act will look like. The public plan is probably a dispensable stalking horse to force the insurance and health industries to accept change.

Until this is all settled, few US insurers or businesses are going to consider adding insured or employer paid medical tourism to employee benefits.

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