Barack Obama & Joe Biden's Healthcare ReformsAnyone who has watched the presidential debate of Obama and McCain will recall that Healthcare was one of the most prominent focus points of Obama's campaign. Finally the time has come when the actually promised Healthcare reforms will be signed into a bill. It is expected that the reforms will be passed by Senate and come into force by late this year (2009). This post describes some of the background in which these healthcare reforms will come into place and what one can actually expect from Obama's initiative on Health Care. The details of actual reforms are not out yet but as soon as they are, updates will be available on Investo Blog. You can subscribe to this blog's feed via RSS or Email to get the latest updates.
Rising Health Care costs in America - what is the exact problem?
The HealthCare costs in America are rising at a much faster rate than the salaries of an average American. Healthcare costs have increased four times the wages of an average American and the following four points underline the plight of United States healthcare system. (number from BBC).
- Nearly 47 million people (out of total population of about 300 million) in United States are uninsured (without Health Insurance) since they cannot afford to pay health insurance anymore. That is a whopping 15.5% of the total population ! In addition to this, 25 million are under insured.
- The percentage of employees with an annual deductible greater than $1,000 increased from 1% to 18% between 2000 and 2008.
- Over 50% of all Personal bankruptcies in the United States are at least partially the result of medical expenses arising from inadequate coverage of health insurance.
- As a nation, United States spends over $2.2 tn (or 16% of the GDP) on Health-Care. This is twice the amount of the average spending by other OECD countries.
A possible reason - Health Insurance companies as middlemenMost individuals in United States buy their own Health Insurance from health insurance companies. Remember that the amount of health insurance premium paid by individuals not only covers the cost of actual medical treatment doctor's and hospital fees, but it also pays for the salaries and income of the Health Insurance companies. This in my opinion is an unnecessary burden on the individual and indeed it is quite high. Add to this the occasional healthcare scams that eat into millions of valuable dollars. So what is the solution? In my opinion the best solution is to minimize the role of middlemen - the Health Insurance companies. The only way this can be done is by Government run HealthCare schemes. This will be another step after bailouts that United States will have to take away from Capitalism.
What to expect in Obama's HealthCare reforms package
- Most employers will provide employees with healthcare coverage.
- Medicaid is currently a HealthCare program run by the United States government to provide healthcare to families with low income. According to proposals for new healthcare reforms, Medicaid will be expanded to cover more individuals.
- House committees proposed a 1-5% surtax on Americans earning over $350,000 to pay for the additional costs which Government will incur in order to run its HealthCare reforms.
Obstacles to passing of Obama's Healthcare reforms packageThe main obstacle or point of disagreement in passing the proposed Healthcare reforms is the revenue generating mechanism needed to fund the new reforms. President Obama failed to persuade Congress to cut tax deductions for wealthy Americans' charitable donations. Visit again for more updates.
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