Obama's Health Plan Criticized

Obama outlines universal healthcare plan

By Edward Luce in Washington

Published: May 29 2007 19:26 | Last updated: May 29 2007 19:26

Barack Obama joined his Democratic presidential rivals Hillary Clinton and John Edwards on Tuesday in offering a plan to provide all Americans with "affordable, universal healthcare".

Speaking in Iowa, which holds the first presidential caucus next January, Mr Obama laid out a five-point plan that he said would lower average family health-insurance costs by $2,500 (€1,859, £1,263) and would bring the 45m uninsured Americans into full coverage.

Mr Obama, a first-term senator from Illinois who was criticised at a Democratic debate in March for being the only presidential contender without a healthcare plan, had strong words for the pharmaceutical and health-insurance companies. He said the two sectors had spent $1bn in the past decade lobbying Congress to ensure that America's expensive and inefficient system of healthcare remained intact. Premiums had risen by 90 per cent in the past six years - four times the rate at which wages have risen. Over half of all American personal bankruptcies are caused by medical crises, he added.

"In the richest nation on earth it is simply not right that the skyrocketing profits of the drug and insurance industries are paid for by the skyrocketing premiums that come from the pockets of the American people," he said.

"The cost crisis is trapping us in a vicious cycle. As ­prem­iums rise, more employers drop coverage and more Amer­icans become uninsured."

Like Mrs Clinton and Mr Edwards, Mr Obama would help pay for his plan by allowing George W. Bush's principal tax cuts to expire in 2010, a proposal attacked by Republicans as a tax increase. Mr Obama would also save on healthcare costs by fully computerising medical records, inc­reasing competition between insurance companies and offering the uninsured the same coverage as federal employees.

Mr Obama's plan was criticized for failing to sever the link between employers and healthcare and also for omitting to specify whether tax breaks would continue to be available to the very wealthy - one of the highest costs associated with US healthcare.

"The Obama plan relies heavily on the current employer-based system, which leaves workers at risk of losing their healthcare if they lose or change their jobs," said Ron Wyden, a Democratic senator for Oregon. "It also puts US companies and workers at a disadvantage in the long term when they have to compete in a global economy against overseas companies whose workers get their healthcare paid by their government."

All the Democratic candidates are likely to face strong criticism from Republicans for proposing to roll back Mr Bush's tax cuts and for increasing public subsidies for healthcare. According to opinion polls, the cost of healthcare will be one of the three issues of most concern in the 2008 election.

On Tuesday Mrs Clinton outlined her plans for addressing rising income inequality in a speech in New Hampshire. "I believe that one of the most crucial jobs of the next president is to define a new vision of economic fairness and prosperity for the 21st century," she said.

The Financial Times