Democratic presidential candidate Sen. Barack Obama (D-IL) unveiled his universal health care plan today while speaking at the University of Iowa. “We now face an opportunity — and an obligation — to turn the page on the failed politics of yesterday’s health care debates,” he says. “It’s time to bring together businesses, the medical community, and members of both parties around a comprehensive solution to this crisis, and it’s time to let the drug and insurance industries know that while they’ll get a seat at the table, they don’t get to buy every chair. We can do this. The climate is far different than it was the last time we tried this in the early ’90s.” (I disagree. The political climate is about the same as it was then).

Obama would create a national health insurance plan that would allow the uninsured to buy coverage, with premiums based on income level. Obama’s plan is not mandatory for all, but he would create a health insurance oversight body called The National Health Insurance Exchange. The Exchange would set the rules and standards for private insurance plans. A big change is that the insurance companies would have to issue a policy for any applicant regardless of their health. The Obama campaign says that the Exchange will lower premiums and save the average family $2,500 per year, but I question how premiums are going to drop if insurance companies have to insure people with preexisting conditions.

Obama would also spend $50 billion over five years to convert all health care records from paper based to an electronic system. According to the Rand Corporation, this could save $70 billion annually, but it would take 15 years to fully implement the technology. Obama’s plan would also allow Medicare to negotiate their own drug prices. It is estimated that this step would save $30 billion critical dollars per year for a system that will be swimming in red ink when the Baby Boomers retire.

This plan already has an unrealistic house of cards feel to it, but the kill shot is the way he plans to pay for it. Obama would do two things, first he would repeal the Bush tax cut to the wealthiest Americans, and, “To help pay for this, we will ask all but the smallest businesses who don’t make a meaningful contribution today to the health coverage of their employees to do so by supporting this new plan,” Obama said. Small businesses are a political sacred cow. No Republicans and very few Democrats will vote for a plan that causes small businesses to pay more taxes. On top of this, the campaign estimates that their plan will cost a very expensive $50-65 billion a year.

Unless the Democrats pick up nine Senate seats in the 2008 election, there will be no universal health care plan, no matter who the president is. The Democrats will need 60 votes to pass this type of plan, because no Republican will vote for it.  It is like the Obama campaigned learned nothing from Clinton’s health care reform failure in the 1990’s. A comprehensive universal health care plan will never pass. A National Health Insurance Exchange is a great theory, but not very practical. Instead of creating more bureaucracy and a federalized program, Obama should focus on giving more money to the states to let them develop their own universal health insurance plans.

He should be rewarding tax benefits to those small businesses that provide quality health insurance. There is some bipartisan consensus for universal children’s health care, and even for lowering the cost of prescription drugs, but I think that if Obama were elected president, this plan would crash and burn. The plan is too big and it tries to do too much. A universal health plan that those without health insurance can buy into, with premiums based on income, is a really good idea, but I think they are trying to do too much, and going about it in the wrong way.

Related article from Bloomberg

Jason Easley is the editor of the politics zone at  His news column The Political Universe appears on Tuesdays and Fridays at

Jason can also be heard every Sunday afternoon at 1:30 pm (ET) as the host of The Political Universe Radio Show at
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