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President Obama: “I have no interest in putting insurance companies out of business.”

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President Obama’s Health Care Address to Congress last night was a dense and succinct explanation of his proposed plan for health care reform, bookended by invocations of history, sentimental anecdotes, and a posit on the definition of American character. The president’s speech was received positively by the American public, with sixty-seven percent of speech watchers agreeing with his proposed plans (CNN).

I would be curious, however, to see what percentage of people who work at insurance companies would approve his plans. The president proposes many restrictions on health insurers that would fundamentally change the way private insurers do business, posing a unique challenge to the tens of thousands of American men and women who work for private insurance companies, some of whom we at VUE Software have the privilege to work with on a daily basis.

Mr. Obama stated that his plan would make it “against the law for insurance companies to deny coverage for preexisting conditions” or to “drop coverage when you get sick or water it down when you need it the most.” He also said that insurers would “no longer be able to place a cap on the amount of coverage you can receive.” Mr. Obama ingratiated himself by stating that people who work at insurance companies do not do these things because they are bad people, but because these actions can increase profits. Since the president maintains that his plan would also lower the cost of health care in general, it may become easier for insurers to offer more affordable premiums and stay profitable.

In addition to these changes, a more drastic proposition of Mr. Obama’s is a new “insurance exchange” that would allow Americans to shop amongst insurers’ options for competitive prices.  Insurers would elect to participate in the insurance exchange, which would allow them to compete for the business of the millions of Americans who are currently uninsured. In order to participate, each of the private insurers would be required to provide a base package of benefits, as regulated by the government. Mr. Obama states that “As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage.” He points to large employer groups as the basis for this claim.

This plan has all sorts of implications that Mr. Obama did not expand upon.  We encourage you to share your thoughts on the issue of health care reform, and tell us how you think the president’s plans may affect your business.



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