American Politics Today - Essentials (3rd Ed)

SOCIAL POLICY| 457

for more substantial, unexpected health care costs. Also, Medicare’s prescription
drug plan went into eff ect in 2006. Despite these reforms, though, discontent with
the system continued.
President Obama’s primary focus when he took offi ce in 2009 was to get
the economy going; however, he also campaigned on reforming our health care
system—controlling costs, providing as close to universal coverage as possible,
and paying for the program without adding to the defi cit. His goal of comprehen-
sive coverage was essential. If insurance companies were forced to cover people
with preexisting conditions without a mandate that everyone have insurance,
people would wait until they were seriously ill to get coverage. Healthy people
had to be pooled with sick people to spread the costs of expensive care. This was
achieved by requiring businesses with more than 50 employees to provide cov-
erage, and individuals not covered by employers to purchase insurance through
state-regulated private health insurance exchanges (to be in place by 2014). Busi-
nesses and individuals who do not comply with the mandate will face fi nes. How-
ever, individuals who cannot aff ord insurance will receive federal subsidies on a
sliding scale (a formula that provides the biggest subsidies to the poorest people
and some support all the way up to four times the federal poverty rate). Other fea-
tures of the law include incentives to computerize medical records, which would
improve the quality of care, reduce the number of mistakes, and facilitate evalu-
ating quality of care.
Another goal was that health care had to pay for itself. With a price tag of
just under $1 trillion over the fi rst 10 years, paying for the bill was a challenge.
However, a combination of higher Medicare taxes, a new investment tax on the
wealthy, an excise tax on insurers for expensive health care plans, new fees for
drug companies and health insurers, and cuts in Medicare reimbursement meant

PROJECTED NATIONAL SPENDING ON HEALTH CARE

If current spending patterns hold, an increasing percentage of federal spending will be devoted to health care, crowding out
other programs. Clearly such trends are not sustainable. What changes do you support to reduce health care spending in
the long run?

FIGURE » 14.8

Percentage of grossdomestic product

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080

0

5

10

15

20

25

30

35%

Social Security

Medicare, Medicaid,

CHIP, and exchange subsidies

Other noninterest

spending

Revenues

Actual Projected

Total primary

spending

Source: Congressional Budget Offi ce, “The Long-Term Budget Outlook,” June 2010 (revised August 2010), Figure A-1, p.68, available at http://www.cbo.gov/
ftpdocs/115xx/doc11579/06-30-LTBO.pdf (accessed 9/24/12).