What Does Obama's Health Care Plan Mean For Consumers?

Obama Health

In the longest speech of his presidency, President Obama outlined his vision for a health care plan at a gathering of the country's leading doctors group, the American Medical Association.

But the question that lingers is what health care reform being proposed by the administration means for consumers, and what hurdles it will face from the health industry.

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One uncertainty is what changes, if any, will be made to malpractice awards, which could determine how many tests and referrals doctors prescribe and impact the ability of a patient to sue if something goes wrong.

Doctors say costs are spiraling up because they conduct so many unnecessary tests due to fear of malpractice lawsuits.

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"What we asked the president is that if we as physicians are willing to tackle the issue of looking at variation of care and reducing unnecessary tests, we also have to have protection in the courtroom. If we didn't order a test, that we subsequently aren't going to get sued because we didn't order that test that shouldn't have been done in the first place," AMA's incoming president James Rohack told ABC News in May.

The president was hesitant to make any promises to doctors Monday, only telling them that he would not do what they recommend when it comes to medical malpractice reform, and limiting the size of the awards juries give.

"I recognize that it will be hard to make some of these changes if doctors feel like they're constantly looking over their shoulders for fear of lawsuits. ... I understand some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That's a real issue," Obama said.

But, to a chorus of boos, the president added, "I'm not advocating caps on malpractice awards, which I personally believe can be unfair to people who've been wrongfully harmed."

Obama said he wants to work with doctors to encourage "broader use of evidence-based guidelines" and cut back "excessive defensive medicine," but he did not provide details on how that would be done.

How to Tackle Health Care Costs

The second hurdle facing the industry and the administration is cost.

"Making health care affordable for all Americans will cost somewhere on the order of $1 trillion over the next 10 years. That's real money, even in Washington," the president said. "Failing to reform our health care system in a way that genuinely reduces cost growth will cost us trillions of dollars more in lost economic growth and lower wages."

But the question remains as to who will pay for that reform.

The president said the administration will cover costs by the $635 billion Health Reserve Fund in the budget, spending cuts and eliminating inefficiencies in Medicare. But he also said this could be paid for by increasing taxes on those who make more than $200,000 annually.

Sen. Max Baucus, D-Mont., the chair of the Senate Finance Committee, will introduce his health care reform bill this week and it's expected to include a provision to tax health insurance benefits for the first time, a provision then-Sen. Obama attacked when proposed by Sen. John McCain, R-Ariz., during last year's election.

Health and Human Services Secretary Kathleen Sebelius told ABC News that Obama opposes the Baucus proposal.

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