President Obama’s Healthcare Address to Congress

President Obama’s Healthcare Address to Congress

On September 9, 2009 President Obama gave a Congressional address to make his case for healthcare reform. In the address he stated:

“There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s—(applause)—where we would severely restrict the private insurance market and have the government provide coverage for everybody. On the right, there are those who argue that we should end employer-based systems and leave individuals to buy health insurance on their own.”

What does this speech tell us about the future of health reform in America?

This edition of our expert panel includes:

Arnold Kling, economist and author of Crisis of Abundance
Stephen Parente, Academic Director, Medical Industry Leadership Institute Carson School Of Management, Finance & Insurance, University of Minnesota
William Winkenwerder, former assistant secretary of health affairs at the Department of Defense
Benjamin Zycher, senior fellow at the Pacific Research Institute
By Arnold Kling

“For me, the most striking thing the President said was that Medicare would not be changed to voucher “on my watch.” What that means is that Medicare’s costs will not be contained on his watch. Because a voucher system is the only way to limit the dollar expenditures of Medicare.

With the current system of reimbursement, there is no way to set a budget for Medicare. The government has to spend whatever doctors and patients want to spend. This open-ended commitment to pay for unlimited health care is simply not sustainable. If President Obama does not change the nature of that commitment, then he certainly will not be the last President to have to reform health care.”

Arnold Kling is an economist and an adjunct scholar with the Cato Institute. He teaches statistics and economics at the Berman Hebrew Academy in Rockville, Maryland. Kling is the author of three books: Under the Radar: Starting Your Internet Business without Venture Capital (Perseus, 2001); Learning Economics (Xlibris, 2004); and Crisis of Abundance: Rethinking How We Pay for Health Care (Cato, 2006). He is a contributing editor to His web site at and he co-edits EconLog.

By Stephen Parente

“In the speech the President ‘doubled down’ on seeking health reform with a set of principles that are somewhat bipartisan but also polarizing. A few reveals. The public option will be a ‘not-for-profit’ health plan inserted to compete against private insurers. The solution example given to the problem of lack of ‘choice & competition’ in 34 states was Alabama with one firm providing 90% of insurance. Intrigued by this assertion, I went to and put in my family’s age and gender info for a zip code in Alabama to see the problem. What I got back was 62 health plan choices with premiums as low as $182 a month for a high deductible family plan for 4. Looks like the exchange the President talked about has been already built. Another detail to be spelled out was the meaning of ‘Basic Insurance Coverage’. I would hope it is high deductible insurance for catastrophic events as well as prevention coverage. Finally, a detail I hope gets clarified. Will for-profit insurers now providing prescription drug and health plans to millions of Medicare seniors as well as Medicaid recipients need to convert to non-profit insurers to continue offering services to those populations? If no change, than the President’s first assertion that no one in Medicare or Medicaid would be affected by this initiative would be true. But then why would the public option be restricted to only non-profits? Over $1.5 trillion of health care expenditures flows through for-profit insurers or subsidiaries per year. I guess if Empire Blue Cross Blue Shield converted to a for-profit, there is no reason why it can’t convert back along with half the other Blues plans in the country.”

Stephen T. Parente is an Associate Professor in the Department of Finance in the Carlson School of Management at University of Minnesota where he specializes in health economics, health insurance, medical technology evaluation and health information technology. He has extensive experience directing empirical analyses utilizing primary and secondary data bases and is acknowledged as a national expert on using administrative databases, particularly Medicare and health insurer data, for health policy research.

By William Winkenwerder

“Last evening President Obama in an emotional speech that lasted nearly an hour exhorted Americans to support his very liberal version of health system reform. Seeking to dispel the broad confusion and deep concern of most Americans regarding the “reform” bills now in Congress, he made his case for a $900 billion plan that mandates coverage for all employers and individuals, introduces a new government-run insurance program, imposes vast new insurance regulations, and pays for it all with major tax increases and cuts to the Medicare program.

His messages and their delivery felt alternately like they might have come from a Puritan preacher or from Hugo Chavez—moralistic, divisive, demagogic, and anti-capitalistic. Not a positive word was said about the current American healthcare system, its’ innovations or excellence or many accomplishments. Health insurers were cast as villains without souls. Critics of his plan were labeled as liars or bickerers.

It is obvious that Obama is not listening to what the American public and many in Congress have been saying for more than two months. He is determined to pursue his vision—essentially that of a socialist—at any cost to the Treasury and to the life of the US economy. It is incredible that so many of our lawmakers are willing to indulge this President’s dreams when there is a $1.8 trillion federal budget deficit this year and a $9.0 trillion projected deficit for the next decade (not including this health plan which is conservatively estimated to further enlarge the deficit by $1.25 trillion over the next twenty years).

There are many steps that should be taken now to reduce the rate of cost growth in health care, make insurance coverage more affordable, and sensibly assist those who lack adequate means. We also need to truly reform the Medicare program before it collapses. None of these is in the Obama plan.

The President did not bring together the American people with this speech. Instead he laid down a gauntlet. Expect bitter divisions to continue within the Democratic Party and ongoing fierce debate among all parties. It will be unfortunate if Americans do not get the reforms we need, or if the wrong prescriptions borne of dreams create a crushing burden from which we’ll never escape.”

William Winkenwerder, Jr., MD is the former assistant secretary of health affairs at the Department of Defense and currently is the Chairman of The Winkenwerder Company, a healthcare consulting and advisory company based in Alexandria, Virginia. He is also a board director and advisor to several companies. At the Department of Defense, Dr. Winkenwerder was the leader of the Military Health System (MHS) with a $40 billion annual budget, and the principal medical advisor to the Secretary of Defense. The MHS with 132,000 personnel, cares for 9.2 million people through a national network (TRICARE) of physicians and hospitals, and 70 military hospitals worldwide.

By Benjamin Zycher

“So there we have it. Millions of additional people will have health-care coverage. There will be no more annual or lifetime limits on such coverage. Preventive care will be covered at no cost to patients. Pre-existing medical conditions no longer will allowed to serve as grounds to deny coverage, which, by the way, means automatically that premiums paid by the insured cannot be allowed to reflect relative risks. (That is why an individual mandate is required to make socialism in health coverage work, even merely in principle.) There will be no rationing: No one will interfere with medical decisions made by patients and their doctors. And how will all this be financed? Largely or wholly by eliminating existing waste in Medicare and Medicaid! Can it possibly be the case that the political experts in the White House actually believe that ordinary people will buy this?”

Benjamin Zycher is a senior fellow at the Pacific Research Institute, the President of Benjamin Zycher Economics Associates, and an adjunct Professor of Economics and Business at the Martin V. Smith School of Business and Economics, California State University, Channel Islands. In addition, he is a member of the advisory board of the quarterly journal Regulation, of the advisory council of USA for Innovation, and the advisory council of Consumer Alert.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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