Healthcare policy in an Obama administration: Delivering on the promise of universal coverage

President Obama has indicated that his administration will reform the American health system to expand access and make health care more affordable. However, his administration will need to address how these programs will be paid; the impact of expanding health insurance coverage; and the potential shortages or strains these reforms could pose for the existing health care system.    

This report examines the challenges the President faces, explains how these reforms may be enacted, the potential impact for employers as well as those in the health industry and provides five ideas for making health care more affordable.

Key findings from the report include:

• PwC estimates that President Obama's plan would provide coverage for two-thirds of the uninsured; costing $75 billion if it were enacted in 2009.
• Forty percent of the estimated 30 million Americans who would gain health insurance would obtain this through their employers reversing a critical trend in the erosion of employer-based coverage.
• Many of the reforms proposed have been tested at the state level in Massachusetts, which enacted universal healthcare legislation in 2006. The state now has the nation's lowest uninsured rate in what had been the most costly healthcare state.
• Approximately one-third of the cost of Obama's plan could come from existing funding for the uninsured. The remaining amount will have to be raised through repealing tax cuts, raising taxes or other limitations in spending.
• Reforms are aimed at providing tax subsidies for the healthcare disenfranchised which includes the estimated 15% of uninsured Americans and those small businesses that cannot afford to offer coverage.
• Expanding coverage will exacerbate current deficiencies in the health system, such as labor shortages.
• Without successful cost containment strategies, growing healthcare costs would increase the costs of the Obama plan dramatically over time and reduce the effectiveness of mandates - making federal costs unsustainable.
• The health industry can improve care and lower costs through public-private efforts; PwC has identified five ideas for the Obama administration to consider.