The healthcare debate II

A couple of nights ago I watched Obama deliver his plan on healthcare to congress. I feel like his plan deserves another blog entry, even though my previous one was on healthcare as well.

Firstly there are a couple of simple points he made that would have an instant positive impact; insurance companies will no longer be able to refuse treatment based on pre-existing conditions, and also the ban on annual or lifetime caps on coverage that may be received. Even if the plan achieved only this it would have been worthwhile, although it doesn't resolve the issue of people not being able to afford health insurance to begin with, or choosing not to have it. However the latter problem was also resolved by the plan to make health insurance compulsory for all, just like car insurance.

The only contentious issues seems to be the methods of allowing everybody to have access to universal healthcare. The proposal allows an insurance exchange which enables individuals and small businesses to gain insurance collectively, and shop around for a variety of private plans; which is how large corporations currently get insurance. However, the plan includes a public option to ensure that nobody slips through the cracks, and also to create competition and prevent cartels forming.

This aspect of the plan is being greatly exaggerated; Obama himself assured congress that there would be no public treatment for illegal immigrants, and also confirmed that "death panels" were an outright lie. Nor would this public option be compulsory for anyone, or effect anyone who already has private insurance. It merely exists to provide an alternative to private health insurance; and as a supporter of the private and free-market, I have faith that the private options will remain preferable. It is a contradiction to state that the free-market is superior to public options, and then assume the public option will replace the private options when both are competing fairly against one another.

The danger is that the public option will have an unfair advantage as it can collect taxes; however this was also covered in the speech. Obama stated that the public insurance option would be self-funding, using money given to it in the form of insurance premiums rather than taxes. Not only this, but he promised that if taxpayers money was used, there would be tax cuts elsewhere to balance this. This aspect of the plan is worthwhile if it stops private cartels forming, and gives access to insurance for the 40 million people in America currently going without. Especially when the costs are estimated to be lower than that of the Iraq and Afghan wars; which many, including myself, didn't even support to begin with.

The fact Obama stated in this speech his back-up plan in case the government overspent on healthcare shows the key difference between British and American politics. In the UK the government will make a proposal, follow it, and be genuinely suprised if and when it overspends and goes wrong - in contrast America has a healthy mistrust for large government. I for one would vote in favour of Obamas healthcare reforms, and I hope it is passed - if it successfully becomes a universal healthcare system with low tax costs and maximum competition, innovation and efficiency, I would certainly prefer their system to the NHS. I think the UK needs to keep a beady eye on the state of American healthcare in the future.