Page last updated at 14:08 GMT, Thursday, 24 December 2009

US healthcare: Who wants what?

Hospital syringes
Healthcare reform: Controversial and contested

Overhauling the US healthcare system is a priority for US President Barack Obama.

The Senate passed its version of a healthcare reform bill on 24 December.

This must now be squared or "reconciled" with the House bill passed in November, a process that is expected to begin in mid-January.

With the various players in the debate all wanting different things from the reform process, the final passage of the legislation will still need much discussion.


In a speech to Congress in September 2009, the president laid out the main aims of his reforms.

He said he wanted to provide more security for those who already have health insurance, provide insurance for those 30 million who do not, and slow the growth of the cost of insurance to families and businesses, as well as government.

His proposals included making health insurance mandatory for nearly everyone, using subsidies to help low-income Americans buy insurance, offering small businesses tax breaks as an incentive to provide employees with insurance and threaten larger businesses with penalties if they did not.

He also called for tougher regulations for the insurance industry, to ensure that people with pre-existing conditions cannot be refused cover, and to prevent insurers from dropping people's coverage when they get ill.

The president advocated the creation of a government-run insurance scheme for those whose employers do not provide coverage. But he indicated that he would still support a bill that did not include this so-called "public option".

The House bill has a public option but the Senate version does not, making its future inclusion in the final bill uncertain.


Many American liberals are disappointed with the compromises that have been introduced to ensure the passage of the bill.

If the public option - which was dropped in the Senate to ensure the support of independent Senator Joe Lieberman - does not make it into the final version, the bill is likely to come under criticism from liberals who complain that without it, meaningful reform will not have been achieved.

But overall, liberal Democrats favour the increased regulation of the insurance industry that Mr Obama has proposed and support efforts to extend coverage to all Americans by offering generous subsidies to the less well-off.


Moderate and conservative Democrats in the House of Representatives belong to a grouping called the Blue Dog Coalition.

They advocated a bill which is "fiscally responsible over the long term".

They also demanded that more small businesses be exempted from the requirement to provide healthcare for their employees and insisted that any public scheme would be barred from paying the same (low) rates to doctors and drug companies as the government-run Medicare programme.

Democratic leaders agreed to some of the Blue Dogs' requests, smoothing the bill's passage through the House.

In the Senate, blue dog Ben Nelson was eventually also brought on board after receiving numerous benefits for his home state of Nebraska, along with promises on tighter curbs on abortion, which he opposes.

Those curbs on federal monies going to subsidise abortions are likely to lead to serious wrangling between liberal and conservative Democrats when the House and Senate versions of the bill need to be reconciled.


Republicans in the House and the Senate have been staunchly opposed to the Democrats' healthcare proposals, scuppering the president's plans for a bipartisan bill.

Sen John McCain said he would take the battle to the American public. "We are not going to give up after this vote, believe me," he said just hours after a Republican attempt to block the bill in the Senate was overcome.

During the 2008 presidential campaign, Sen McCain outlined his healthcare reform plan: end the tax-free status of employee health benefits, and give all Americans tax credits for the purchase of health insurance.

This would remove the incentives for Americans to keep their employer-provided health coverage, so more Americans would shop around for private insurance. The power of the free market would then force costs down, Mr McCain argued.

He also argued that medical malpractice lawsuits were forcing up the cost of hospital care, and favoured caps on the amount of money patients could claim.

Some Republicans have described similar proposals when asked to outline their plans for healthcare reform, but the party's strategy appears to be geared more towards defeating the Democrats' policies than coming up with alternatives.

Many of the features of reform that Republicans attacked - like the so-called "death-panels" or coverage for illegal immigrants - were not in any of the plans put forward by Democrats.


Although vilified by many liberals as the enemy of reform, health insurers had - in public - been fairly supportive of the Democrats' efforts for several months.

But that approach changed in October with the release of a report claiming many people would face significantly higher costs if the proposed reforms went ahead than they would under the current system.

The study, commissioned by the industry body AHIP, was quickly dismissed as a "hatchet job" by senior Democrats, while some analysts suggested it was biased and based on cherry-picked data. However, the insurers stood by their claims.

The report says the cost increases will be the result of new taxes and a decision by lawmakers to weaken the requirement for Americans to get insurance coverage. Insurers say that means many people will wait to sign up until they become ill, thus driving up costs for everyone else.

The insurers' earlier cautious support for the Democrats' efforts was attributed in part to the fact that the reforms could benefit them.

In particular, the "individual mandate" (the rule forcing all Americans to take out health insurance or face a fine) will create a lot of new customers for insurance companies, and many of the newly-enrolled members will be young, healthy people who have previously opted not to get insurance.

However, the insurance companies are less sanguine about the prospect of the public option, fearing it could drive them out of business. Heavy lobbying on their part contributed to the provision being dropped from the Senate bill.


US doctors (represented by the American Medical Association or AMA), and hospitals (represented by various organisations, including the American Hospital Association and the Federation of American Hospitals) broadly back the Democrats' reform proposals.

The AMA has especially welcomed some of the compromises in the Senate reform bill which the architect of the bill, Sen Harry Reid, included to secure doctors' support:

A proposed $300 fee for doctors to enroll in Medicare - the government programme for the elderly - and payment cuts to specialty physicians were both dropped.

In return, the three biggest hospital groups in the US have offered to reduce their costs by $155bn over 10 years in an attempt to make health reform more affordable.

The reductions will be achieved by cutting the amount of subsidies that hospitals receive from the government to cover uninsured people in emergency rooms. As more and more people get insurance, the hospitals reason, the need for the subsidies will be reduced.


Manufacturers of drugs and medical equipment are not very supportive of the Democrats' reform plans.

But the industry - represented by the Pharmaceutical Research and Manufacturers of America (PhRMA) - won a number of important concessions in the Senate, which dropped plans to let the government negotiate drug prices for Medicare recipients.

Makers of brand-name biotech drugs were also offered 12-year protection from competitors of generic drugs and proposals to allow the importation of cheaper drugs from Canada and other countries was dropped.

Pharmaceutical companies remain opposed to the reformers' proposal to establish a government body to conduct research into the relative effectiveness of different treatments.

Drug companies argue that this could eventually lead to a situation in which government bureaucrats dictate to doctors which drugs they are allowed to prescribe.

Supporters of the proposal insist that "comparative effectiveness research" is simply a useful tool to help doctors avoid prescribing expensive drugs that work no better than cheaper treatments.


Print Sponsor

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific