Obama's Final March for Health Reform

As President Obama makes his final march for health reform, with Nancy Pelosi scheduling a House vote for as early as next week, he is making a lot of promises:

The part most voters agree with is protection from health insurance company abuses. Here, President Obama promises Americans will never again:

• Be denied coverage because of pre-existing conditions.
• Be hit with arbitrary premium hikes.
• See your coverage revoked just when you get sick or injured.
• Face unlimited out-of-pocket expenses for your care.

But there is a reason health insurance companies engage in these games. If you're not working for a company that provides health insurance to its workers, you're going to be facing sticker shock when you find out how much health insurance actually costs. If you are healthy and feeling lucky, the temptation to go without health insurance is high.

And people who are to sick to work eventually lose their jobs and show up at the health insurance company doorstep. That leaves a lot of sick people in line at the health insurance company window, which drives up costs and gives healthy people in line more incentive to do without. And the cost spiral prices at the low end of the economic scale out of the health insurance market.

Are the health insurance companies evil, or just dealing the best they can with a situation they didn't create? As long as they make money off the people still in the system, they don't have a lot of incentive to fix the cost spiral.

So that's where the President's plan tries to put the incentives back on individuals and businesses to purchase health insurance. The stick is mandates, and tax penalties for not having or offering coverage. The carrot is tax credits and a new place to purchase health insurance:

• Small business owners receive tax credits that make it easier to provide coverage for employees.
• Struggling individuals and families receive tax credits to make coverage more affordable.
• Uninsured individuals and small business owners will become part of a powerful negotiating pool that promises to lower prices and increase choice.

The President is also making promises to reassure those who already have coverage:

• If you have health insurance through your employer and you like your plan, you can keep it.
• If you have Medicare, the President's plan guarantees that your benefits will not be cut, and the Medicare Trust Fund will be extended for more than 9 years.

And the President promises to reduce costs:

• Save billions of dollars every year by reducing waste and abuse in our current system.
• Save and create millions of jobs, raise wages and strengthen the economy
• Cut the deficit by nearly $1 trillion over two decades.

That is a lot of promises, I have to say, and requires a lot of trust in government. Nonetheless, I think President Obama has identified the fundamental problem with doing nothing to reform the current health insurance system:

• Even those who have insurance today will be less secure, and more likely to lose coverage if they switch jobs or lose their job due to rising costs on the individual market or being denied coverage due to a pre-existing condition.

Even though the existing system doesn't work for everyone, I think it did work for a lot of people when they stayed in one job and one health plan for most of their working lives. But in our musical chairs economy, that's no longer realistic. A serious health problem, followed by a layoff or getting tripped up by insurance rules that deny coverage, and you're out of your life savings, out of your home, and out of the middle class.

Where's the insurance in that? Why buy into that system? If a good health reform doesn't pass, it may be time for the American public to make other arrangements.