NCPA - National Center for Policy Analysis


May 30, 2007

Sen. Barack Obama (Ill. - D) proposed a major overhaul of the nation's health care system on Tuesday, aimed at covering the nearly 45 million uninsured Americans and reducing premium costs for everyone else.

Obama said he would rely on a combination of the existing employer-based system and a new government program to make health insurance accessible to everyone. He also promised to reduce the cost of health insurance by helping with expenditures for catastrophic illnesses that are a major factor in driving up employers' rates. Obama pledged new scrutiny and new limits on the profits of the biggest insurance companies, declaring it was simply "the right thing to do."

  • Obama would pay for his plan by not renewing President Bush's tax cuts for the most affluent Americans -- those making more than $250,000 a year -- when they expire at the end of 2010, aides said.
  • Campaign officials estimated that the net cost of the plan to the federal government would be $50 billion to $65 billion a year, when fully phased in, and said the revenues from rolling back the tax cuts were enough to cover it.

Obama's proposal includes a new requirement that employers either provide coverage to their employees or pay the government a set percentage of their payroll to provide it. Similar requirements have proven intensely controversial, notably in 1993-94, when the Clinton health care plan went down in large measure because of a small business backlash.

Obama advisers said the smallest businesses would be exempt from this requirement.

Obama would create a public plan for individuals who cannot get group coverage through their employers or the existing government programs. Children would be required to have health insurance; subsidies would be available for those who need help with the cost of coverage.

Source: Robin Toner, "Obama outlines health care overhaul; Wider, cheaper coverage would be paid for by not renewing tax cuts," Houston Chronicle, May 29, 2007; and Jackie Calmes, "Why Health Care No Longer Makes Politicians Leery; Shift in Public Attitudes Since '94 Clinton Fiasco Emboldens Candidates," Wall Street Journal, May 30, 2007.


Browse more articles on Health Issues