Obama’s Health Care Plan Vague On Uncompensated Care Expense, Costs: Experts

Most hospital executives support some form of universal health care coverage because they say more insured people will translate into less uncompensated care expense, with bad debt expense seeing the biggest decline.

Joseph Antos, a health care policy expert with the American Enterprise Institute, told insideARM  that  Democrat Presidential Candidate Barack Obama’s health care reform plan aims to provide coverage to millions more uninsured Americans, but that doesn’t mean hospitals will end up with less uncompensated care expense.

Antos said Medicare reimbursements to hospitals would be among the first savings the government would seek to curb costs under Obama’s plan.

“Obama is talking about finding $200 billion in savings from health care. Where will that comes from? ” Antos said. “Hospitals represent the biggest chunk of money that goes into health services. They are more likely to see the evil eye of Congress cast upon them first.”

Antos added that under Obama’s plan, hospitals that rely on federal funds to reimburse them for treating uninsured immigrants would dry up.  So would funds earmarked for state programs that provide higher reimbursements to hospitals that treat a disproportionate number of low-income Americans.

“If you don’t have any more uninsured, you don’t need a bad debt pool,” Antos said. “There is a greater certainty of (those funds) drying up than hospitals seeing additional money coming in because more people have insurance.”

Antos, who served as the assistant director for health and human resources at the Congressional Budget Office before joining AEI in 2001, said taxpayers may have to pay in other ways if federal funds are redirected from other programs to help pay the cost of providing coverage to as many as 34 million uninsured Americans.

Meanwhile, Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation said that while Obama’s plan purports to save the average family $2,500 a year, it could cost taxpayers far more than the projected $50 billion to $65 billion a year price tag. He cited Obama’s proposal to have the federal government pay a percentage of employers’ cost to cover employees with high cost claims.

“(Obama) doesn’t say what the threshold (for committing government funds) is going to be, so we don’t know where the taxpayer obligations will kick in,” Moffit said.

Additionally, Moffit fears that Obama’s plan would encourage more employers to drop health coverage because their employees could join a national health plan supported, in part, by employers who don’t provide insurance to their employees.

“A lot of employers will look at this and think, ‘why do this (offer health insurance) when I can dump my employees in the (government) plan,’” Moffit said.  He anticipates a massive transfer of people out of employer-based health insurance plans into the government plan. And that, Moffit said, would set the government up to compete with the private insurance sector.

“I don’t think you will have fair competition,” Moffit said. “When you have private insurers assuming risk on their own, and a government plan backed by taxpayers, how can you have a level playing field?”

America’s Health Insurance Plans Association, the national association representing nearly 1,300 health insurers, told insideARM that it doesn’t support either presidential candidate’s plan. However, it does support some form of universal coverage to improve the quality of care and stem the rising tide of health care costs.

Moffit said he believes McCain’s free market proposals would bring more competition that health care providers want, but that insurance companies are unlikely to embrace.

“Insurance companies exercise geographical control, where two or three insurance companies dominate,” Moffit said. “They don’t want to compete.”