Obama Defends Including Public Health Insurance Option in Reform

By David Alexander
June 15, 2009

President Barack Obama Monday warned doctors the U.S. healthcare system was a ticking time bomb and urged them to support his overhaul plan, which includes a public insurance program that many of them view with skepticism.

Obama took his healthcare campaign to the annual meeting of the influential American Medical Association in Chicago, where he likened the U.S. healthcare system to struggling General Motors, which has filed for bankruptcy protection.

"If we do not fix our healthcare system, America may go the way of GM; paying more, getting less, and going broke," he said.

"Make no mistake: the cost of our healthcare is a threat to our economy," said Obama, who wants a healthcare reform bill on his desk by October. "It is a ticking time bomb for the federal budget. And it is unsustainable for the United States of America."

The president's speech comes as debate sharpens over elements of the healthcare overhaul being drafted by Congress, including how to pay for the plan and whether it should include a public insurance program to compete with private insurers.

Many opposition Republicans reject a public plan and say there is not enough support in Congress for it. They argue it would ultimately drive private insurers out of business.

The AMA also has expressed doubts about any public plan that would be similar to the Medicare program for the elderly. But the group said last week it was willing to consider other public options being considered by Congress, including member-owned cooperatives.

The U.S. healthcare industry costs about $2.5 trillion annually but leaves 46 million Americans uninsured and with little access to medical care. Despite the cost, the U.S. system consistently ranks worse than other developed countries on many key measures.

MORE COMPETITION

Obama said a public healthcare plan would "inject competition into the healthcare market that forces waste out of the system and keeps the insurance companies honest."

He acknowledged that expanding coverage to all Americans would have a short-term cost but stressed it would be deficit neutral in the next decade.

With some estimates putting the cost of healthcare reform at $1.2 million, critics say the reforms will only add to the country's growing mountain of debt.

"There are already voices saying the numbers don't add up. They are wrong," Obama said, outlining how he planned to pay for the reforms, including tax increases on wealthier Americans and savings in spending cuts.

He took a swipe at Republicans and others who accuse him of trying to create a single, government-controlled healthcare system, accusing them of "fear-mongering."

"They'll give dire warnings about socialized medicine and government takeovers, long lines and rationed care, decisions made by bureaucrats and not doctors," he said. "We've heard it all before and because these fear tactics have worked, things have kept getting worse."

In Washington, Senate Republican Whip Jon Kyl predicted momentum for healthcare reform would slow as the public learns more about Democrats' plans.

"There is a reason why the president says, 'If we don't get this done soon, it is not going to happen,"' Kyl told reporters on Capitol Hill.

"He knows momentum will inevitably slow for something that is extraordinarily costly, will deny people coverage that they already have, will ration their healthcare and could provide some kind of government insurance company that is going to drive out private insurance companies."

While Obama insisted he was not advocating caps on malpractice awards, he also called for exploring a range of ideas to scale back "excessive defensive medicine."

Doctors have long complained they have to shoulder high malpractice insurance premiums because of the lack of limits on malpractice suits and those costs are often passed on to patients in the form of higher fees.

(Writing by David Alexander and Ross Colvin; Editing by Bill Trott)