Obama Health Plan May Cost More, Deliver Fewer Savings
President-elect Barack Obama’s proposed healthcare policy would provide coverage to two-thirds of America’s uninsured at an estimated 2009 cost of $75 billion, and may not deliver meaningful savings for families for a decade or more, according to a PricewaterhouseCoopers Health Research Institute study.
President-elect Obama’s proposals could lead to lower margins for providers, pharmaceutical companies and health plans that increasingly depend on government payment.
In the free report,“Healthcare Policy in an Obama Administration,” PwC points out that 40 percent of the estimated 30 million Americans who would gain coverage under Obama’s plan, would do so through their employers – a development that would be welcomed.
PwC compares Obama’s plan to the healthcare system in Massachussets, where many of Obama’s plans are being tested and where 97 percent of residents have received expanded healthcare.
Other Findings:
- Approximately one-third of the cost of Obama’s plan could come from existing funding for the uninsured. The remaining amount will have to be raised through repealing tax cuts, raising taxes or other limitations in spending.
- Reforms are aimed at providing tax subsidies for the healthcare disenfranchised which includes the estimated 15% of uninsured Americans and those small businesses that cannot afford to offer coverage.
- Expanding coverage will exacerbate current deficiencies in the health system, such as labor shortages.
- Without successful cost containment strategies, growing healthcare costs would increase the costs of the Obama plan dramatically over time and reduce the effectiveness of mandates – making federal costs unsustainable.
- The health industry can improve care and lower costs through public-private efforts.
The study joins others released in the past week, and written about here, including a Moody’s Investors Service analysis of winners and losers under Obama’s plan.
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