Liability or Destiny: Obama’s Health Care Reform

The Reform of the health care system is Barack Obama’s most important project – he cannot afford to fail.

Most likely Barack Obama’s most important project, health care reform, is entering the deciding phase in Congress. The president is pressuring both chambers of Congress, the House of Representatives and the Senate, to have a finished bill in place by August so that the conciliation proceedings can be completed after summer recess, and a compromise can be reached before the year’s end. Should that fail, they will have missed the time frame. Autumn 2010 will bring midterm elections, the congressional elections in the middle of a presidential term. In a campaign, such reform is seen as futile.

The last democratic president’s case is a warning for Obama. In 1992, the elected Bill Clinton planned to have health care for all Americans. He did not succeed to bring a compromise through Congress before the midterm elections in 1994. This failure led to an election defeat and derailed the health care reform.

Obama pitches daily for the reform; it was a central campaign promise. He dedicates at least an hour a day to talks with experts, and telephone calls to lobbyists, in order to hear their concerns and pressure them to make concessions. Part of the strategy is that he is not putting forward any bill. The bill should be worked out by expert committees in Congress so it does not seem like Obama is sidestepping Congress.

The president simply says which principles he would like to see considered: every American should have affordable private health insurance, and for children it should be mandatory. Citizens who earn little should receive help from the State. Of late Obama is stressing that the costs may not be financed through debts. The debate has shifted in the first six months of his administration. Originally the 45 million uninsured, approximately 15 percent of Americans, stood in the forefront. In the meantime, the question of who should pay, and the fear of rising costs, have made their way to the fore. Basic coverage for all would cost a billion dollars over the next ten years. According to a recent poll, a majority of people think that reducing costs is a more important goal than insuring everyone.

Most Americans have a different attitude toward health insurance than Europeans. Health care is also organized differently. The main problem, however, remains the same: the costs of Medicare are rising faster than the prices of other goods, and even worse, faster than the economy. Therefore, a larger piece of the gross national product is taken up by it. One of Obama’s nightmare scenarios is: if the cost explosion of recent years is not slowed down, the State would have to use a foreseeable 50 percent of the budget to subsidize Medicare. The expenditure for health, when Clinton took office in 1992, was up to 1.3 billion dollars. At the time of Bush’s election in 2000, the costs had risen to 1.8 billion, and in 2008 for Obama’s election it was about 2.6 billion. The costs are projected to be 4.4 billion in 2018.

Many Americans are skeptical of mandatory insurance, and a clear majority disapproves a state-organized health care system. Sickness is considered by most a life risk just like other risks. In their eyes everyone should decide for him- or herself if he or she wants to be insured or not. It is seen as a question of freedom, not as necessary care for the State and society, because the risk for the citizens is too high for the individual to bear.

Traditionally, in comparison to Europeans, Americans pay a much higher portion of health care costs themselves. Only half is covered by insurance and state subsidies; for example, tax-breaks for premiums and doctor’s bills. The other half is paid out of pocket.

As much as the Americans have health insurance, it is overwhelmingly organized through employers. The breadth of coverage for employees, and usually their families, is negotiated upon hiring, much like salary. The employer signs a contract with a large health care company to insure all employees. If the job ends, so does the insurance. 50 percent of U.S. citizens are insured this way. Small businesses, as a rule, do not offer health insurance.

Insurance coverage for retirees over 65 years old has been covered since 1965 by Medicare, a reform put in place by the democratic president Lyndon B. Johnson. At the same time, Medicaid was established as basic insurance for people of working age who could not afford insurance. 15 percent of the country is covered by Medicare, and 13 percent by Medicaid. Five percent of Americans are not covered by either program, and must pay for health insurance out-of-pocket. 15 percent are uninsured.

In comparison, the health care coverage of the highest-earners in America is better than in Europe, but the cost is much higher. America pays twice as much per person for health care than Germany does. The coverage of the average citizen is better in Germany. Nevertheless, even Democrats label the European system as a “socialist” system that does not jibe with the idea of individual responsibility in the U.S. A system change in America is not acceptable to the majority.

Only the Democrats in the House of Representatives have said how they want to pay for the reform: through savings in the health care system and a tax-increase of 5.4 percent for those who earn more than 350,000 dollars per year. That is not acceptable for Republicans. In the Senate, Obama has so far not found a majority for his goals. Moderate Democrats wait patiently.