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Obama's health funding plan

2nd March 2009

US president Barack Obama has proposed funding worth US$634 billion as a "down payment" on a complete reform of the country's healthcare system.


The money would pay for a restructuring of the way the government pays hospitals, with a heightened focus on follow-up support.

The funds would represent just over half the money needed for Obama's proposal to dispense health care to some of the 48 million in the US who are currently uninsured.

The current plan would pay for many of the reforms by raising taxes in 2011.

Nearly one half of the initial US$634 billion would come from limiting the itemised deductions that wealthy families may make on their taxes, though it would not affect families making less than US$250,000 annually.

For taxpayers in the current top tax bracket, tax deductions for donations to charity would drop from 35 cents per US dollar to 28 cents.

Over the course of ten years, the provision would raise somewhat less than half of the starting money, or US$300 billion.

The other half of the money would come from the plan's full-scale reduction of its current healthcare program, and a decrease of government subsidies in health insurers, as well as in hospitals and physicians.

House Minority Leader John Boehner said that increasing taxes during a recession would be disastrous for the economy, and that Herbert Hoover's failed attempt is well-known.

The Majority Leader Steny Hoyer said that the budget is a serious document for serious times, and that it does not sacrifice long-term needs to the politics of the moment.

Some healthcare providers were positive about the new changes.

Charles Kahn said the plan was clearly moving in the right direction and making a statement about coverage and health reform, and that the Federation of American Hospitals supported it.

As part of the budget's strategy for allocating funds, hospitals with high rates of readmission will be paid less if patients are readmitted to the hospital within the same period of 30 days.

Some health insurers have praised Obama for prioritising health care, although America's Health Insurance Plans (AHIP), the industry's trade association, expressed concerns.

Karen Ignagni, AHIP president and CEO said that a cut of this scale would jeopardise the health security of more than 10 million seniors enrolled in Medicare Advantage.

She said that it would turn back the clock on the innovative payment incentives which improve the quality of care that patients receive.

One of the other aims of the new plan is to give patients access to cheaper medicines by supporting the manufacture of cheaper versions of high-tech drugs.

One of the ways it will do this is by closing legal loopholes in the current drug patent system.


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Article Information

Title: Obama's health funding plan
Author: Luisetta Mudie
Article Id: 10401
Date Added: 2nd Mar 2009


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