Sen. Barack Obama, the Democratic Party’s presidential nominee, proposes several sweeping changes to the current healthcare system as part of his “Plan for a healthy America.” Sen. Obama believes that the major problem with the current healthcare system is the 47 million uninsured or underinsured Americans who cannot afford to pay rising medical costs and higher insurance premiums. Furthermore, Sen. Obama believes that too little is spent on preventive medicine.


Published 10/1/2008
A. Alex Jahangir, MD; Ryan M. Nunley, MD; the Washington Health Policy Fellows

Barack Obama: Plan for a healthy America

Sen. Barack Obama

National, not universal, coverage
Although Sen. Obama would mandate health coverage for all children, no such mandate applies to adults; therefore, his plan is not truly a “universal” healthcare plan. Sen. Obama hopes that his proposed changes will increase access to health insurance. He estimates that using a combination of strategies, his plan would reduce a typical family’s health insurance premiums by $2,500 annually.

Central to Sen. Obama’s healthcare plan is providing access to health insurance to all Americans who currently do not have private coverage. He proposes creating a new national health plan. This national health plan would guarantee eligibility to everyone, regardless of preexisting medical conditions. Benefits would be similar to those currently available to federal employees, and the plan would have affordable premiums, copayments, and deductibles.

Such a national plan would simplify paperwork and rein in the cost of health care, as well as guarantee portability and choice. This would enable participants to change jobs without changing or jeopardizing their healthcare coverage. Insurance companies that participate in this new public program would be required to report data to ensure that standards for quality care, health information technology, and efficiencies in administration are being met.

Sen. Obama also proposes to expand eligibility for the Medicaid and State Childrens’ Health Insurance Programs (SCHIP) and ensure that these programs continue to serve their critical safety net function.

Private market reforms
For individuals who do not participate in the national health plan and opt to purchase a private insurance plan, Sen. Obama proposes the creation of a “National Health Insurance Exchange.” The Exchange would act as a watchdog group and help reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible.

Under this plan, “insurers would have to issue every applicant a policy, and charge fair and stable premiums” that do not depend on the applicant’s health status. All plans offered through the Exchange would be required to include, at a minimum, the same benefits offered through the new public plan, with the same standards for quality and efficiency. The “Exchange” would evaluate plans and make public the differences among the plans, including cost of services.

Reducing healthcare costs
Sen. Obama proposes to reduce the costs of catastrophic illnesses for employers and their employees by reimbursing employer health plans for a portion of the catastrophic costs they incur above a threshold—as long as employers guarantee that these savings are used to reduce premium costs for their employees. He believes that if the federal government offsets a large portion of the highest-cost claims, the price of family health insurance might decrease.

In addition to reducing the cost of health insurance, Sen. Obama also wants to reduce the cost of providing health care. He would require providers who participate in the new public plan, Medicare, or the Federal Employee Health Benefits Program (FEHBP) to use “proven disease management programs,” particularly for patients with chronic conditions such as diabetes, heart disease, and high blood pressure.

To increase transparency about quality and cost, hospitals and providers would be required to collect and publicly report specific measures of healthcare costs and quality, including data on preventable medical errors, nurse staffing ratios, hospital-acquired infections, and disparities in care. Health insurance plans would also be required to disclose the percentage of premiums that are allocated for patient care as opposed to administrative costs. Such transparency would result in companies using a “reasonable” share of insurance premiums for patient care instead of for “exorbitant” profits and administrative fees.

Lowering drug prices is another way that Sen. Obama would reduce healthcare expenses. He would encourage use of generic drugs in any government-supported healthcare plan. In addition, he would repeal the ban on direct negotiations between the government and pharmaceutical companies, which he says would lower drug costs for Medicare beneficiaries.

Finally, Sen. Obama’s plan calls for the elimination of subsidies to the insurance companies that offer Medicare Advantage plans.

Ensuring patient safety, quality care
To promote patient safety, Sen. Obama would require providers to report preventable medical errors. His plan calls for support of hospital and physician practice improvements to prevent future occurrences.

To encourage quality care by providing “incentives for excellence,” Sen. Obama supports a pay-for-performance reimbursement model for healthcare providers. Providers whose patients are enrolled in the new public plan, the National Health Insurance Exchange, or Medicare would be rewarded for achieving performance thresholds on outcome measures.

To eliminate waste and ineffective treatments, Sen. Obama proposes to increase funding for reviews and research on the comparative effectiveness of various diagnostic and treatment options. Such studies would be guided by an independent institute, so that providers and patients would have objective information on which to base decisions regarding their health care.

Support of health information technology is also a part of Sen. Obama’s plan. He has pledged to invest $10 billion a year over the next 5 years to move the U.S. healthcare system to broad adoption of “standards-based electronic health information systems, including electronic health records.”

Insurance reform
Instead of addressing medical liability reform by focusing on the actions of trial lawyers, Sen. Obama puts the focus on insurance companies. He proposes to strengthen antitrust laws to prevent insurers from overcharging physicians for malpractice insurance. In addition, his proposal calls for “new models for addressing errors that improve patient safety, strengthen the doctor-patient relationship and reduce the need for malpractice suits.”

Impact on orthopaedics
How Sen. Obama’s healthcare reform plans will directly affect the practicing orthopaedist is unclear. The plan fails to truly address medical liability reform. Access to and use of proven practice models to improve outcomes may have some benefits, but whether his proposals for insurance reform will have an impact on the medical liability crisis that currently exists is unknown.

For more on Sen. Obama’s healthcare proposals, as well as information on his position on other issues, visit the campaign Web site at

The Washington Health Policy Fellows include A. Alex Jahangir, MD; Ryan M. Nunley, MD; Aaron Covey, MD; James Genuario, MD, MS; John H. Flint, MD; Sharat K. Kusuma, MD; Samir Mehta, MD; Anil Ranawat, MD; and Alok D. Sharan, MD.