President Obama Impact on the Health Insurance Industry in the United States

Healthcare reform is one of the key issues of the new Obama administration. With Democrats now in control of both the White House and Congress, they have a chance to pass reform legislation to provide healthcare coverage for the more than 46 million uninsured Americans (about 15% of the total population).

The new coverage will be funded to a large extent by the federal government (which most experts estimate will cost between $120 billion and $150 billion, depending upon the scope of the package). This package would likely expand access to affordable healthcare coverage for individuals and increase revenue for the providers of the medical products and services, especially pharmaceutical companies.

One issue that is going to be greatly effected by the new administration is the Medicare Part D prescription drug program.  Obama plans to eliminate the non-interference clause in the Medicare Part D prescription drug program, which helps fund drug coverage for some 44 million elderly Americans.  Under the present system, the government is prohibited from engaging in Medicare drug pricing negotiations with pharmaceutical manufacturers.  Negotiations are handled strictly by private-sector managed care and pharmacy benefit management firms.

President Obama and congressional Democrats favor changing the program to allow or possibly require direct government negotiations with drug manufacturers, which is expected to sharply lower the program's cost.  Another likely money-saving tactic will be greater use of inexpensive generics through new incentives.