The Ticking Time Bomb of American Health Care

Reform of the U.S. health care system has been through ups and downs. Though President Barack Obama signed the health care reform bill on March 23, the House of Representatives needs to pass a separate law to enact the changes. After this tough vote, a dream that the Democrats have pursued for more than 70 years, health care for all Americans, will come true. With his outstanding political wisdom, strong faith and make-it-or-break-it courage, Obama worked hard to win the health care reform battle. There is, however, a great difference between the bill that Obama signed and his original goals.

At the beginning of 2009, the new American President Barack Obama proposed the most sweeping health care reform plan in U.S. history, not only in terms of financial investment but also the concept of reform. Obama’s goals were historic breakthroughs: establishing a brand new foundation for sustainable development, building a supportive system and professional environment for doctors, and providing the best medical services at the lowest costs for all Americans. This system would reduce corporate pressure, encourage economic vitality, create more jobs, increase wages and boost economic growth by tens of billions of dollars every year, which would strengthen both the health care system and the economy.

The core of Obama’s health care reform was the public option, which would simultaneously ensure universal coverage and control insurance costs. The bill passed by the House of Representatives on Nov. 7, 2009, offered the public option and allowed the government to set insurance rates, similar to Medicare and Medicaid. Opposition from interest groups and ideological differences made Obama’s ideal bill nearly impossible to pass. Since November 2009, Obama had to make concessions, such as allowing states to decide whether to join the public option and allowing insurance companies to negotiate with health care providers. By the end of 2009, the public option had vanished from a significantly weakened House bill.

After the special election in Massachusetts, the Democrats fill only 59 out of 100 seats in the Senate, making it nearly impossible for them to prevent the Republicans from filibustering the bill. In order to appease Republican Senators, the reform bill degenerated to one in which the government subsidizes insurance and the public option is not an option, making the goal of lowering Medicaid costs an elusive one.

In order to gain support in the House and the Senate, the Obama administration compromised on the breadth of coverage. The House bill called for insurance that would cover 96 percent of Americans under the age of 65 years rather than universal coverage. The signed bill would cover 95 percent of the 32 million uninsured Americans instead of 85 percent.

Frankly, Obama’s health care reform is a victory watered down by compromise. Despite the expansion of coverage, the U.S. still has inefficient health care and the highest overall medical spending. Moreover, medical spending will continue to rise as more people buy coverage. The failure of the public option means that the U.S. government continues to pay for medical insurance without any safeguard to control spending, waste, abuse and fraud. The staggering cost of American health care is a ticking time bomb.

Translator’s note: The author is a professor at the Center for Economic Research at Peking University.