February 22, 2010 in Nation/World

Obama puts forward last-ditch health care plan

Associated Press
 

Details of Obama health care plan

President Barack Obama released a health care overhaul proposal Monday that builds on legislation passed Christmas Eve by the Senate, and makes some changes to placate Democrats in the House.

Here are some of the main features:

• HOW MANY COVERED: Like the Senate bill, Obama’s proposal would cover 31 million uninsured Americans.

• INSURANCE MANDATE: Like the bills approved last year by the House and Senate, the proposal would require most everyone to be insured or pay a fine. There is an exemption for low-income people. The Senate bill exempted people with incomes under the federal poverty level ($21,200 for a family of four) whereas Obama’s plan, like the House version, would exempt people under the tax-filing threshold ($45,295 for a family of four). But the fines levied under the insurance mandate would be higher than the Senate proposed. Obama also keeps a “hardship exemption” that excuses anyone from buying insurance if it would cost more than 8 percent of their income.

• INSURANCE MARKET REFORMS: Like the House and Senate bills, Obama’s proposal would stop unpopular insurance industry practices such as denying coverage to people with pre-existing conditions or charging women more. In response to a recent 39 percent rate hike announcement by Anthem Blue Cross in California, Obama would give the federal government the authority to block rate hikes, roll back premium prices and force insurance companies to give rebates to consumers.

• MEDICAID: Like the Senate bill, Obama’s proposal would expand the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. The federal government would pick up more of the tab, paying 100 percent of the cost for newly eligible individuals through 2017. Obama eliminated a special deal that would have given Nebraska 100 percent federal funding for newly eligible Medicaid recipients in perpetuity. A different, one-time deal negotiated by Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million stayed in.

• TAXES: Obama scaled back a tax on high-cost insurance plans that was opposed by House Democrats and labor unions. The tax would be delayed from 2013 until 2018 and the thresholds at which it is imposed would be moved up from policies worth $8,500 for individuals and $23,000 for families, to $10,200 for individuals and $27,500 for families. Those changes mean $120 billion in lost revenue over 10 years that Obama would replace mostly by applying an increased Medicare payroll tax to investment income as well as wages for individuals making more than $200,000, or married couples above $250,000. The Senate bill had applied the tax only to wage income.

• PRESCRIPTION DRUGS: Obama would close the “doughnut hole” coverage gap in the Medicare prescription drug benefit that kicks in once seniors have spent $2,830. The Senate bill would have provided a 50 percent discount on the cost of brand-name drugs in the doughnut hole but Obama would close the gap entirely by 2020. The added cost, which the White House did not disclose, would be paid for in part by an additional $10 billion in fees on the drug industry.

• EMPLOYER RESPONSIBILITY: Obama keeps the approach in the Senate bill, which doesn’t require businesses to offer coverage, but charges fees to companies with more than 50 employees if the government subsidizes employees’ coverage. Obama increases the fees to $2,000 per worker instead of $750, but grants companies an allowance that was not part of the original Senate plan.

• SUBSIDIES: Obama provides more generous subsidies overall for purchasing insurance than the Senate bill did. The aid is available for households making up to four times the federal poverty level ($88,000 for a family of four).

• HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges. Liberals hoped Obama would go with a national exchange like the House bill did, but he stuck with the Senate’s state-based approach. People working for big companies would not see major changes.

• GOVERNMENT-RUN PLAN: Obama did not include the government-run insurance plan sought by some Democrats. He kept the Senate approach, which gives Americans purchasing coverage through new insurance exchanges the option of signing up for national plans overseen by the federal office that manages the government health plan available to members of Congress. Those plans would be private, but one would have to be nonprofit.

• ABORTION: Obama did not change the abortion language in the Senate bill, which is opposed by anti-abortion groups that say it allows federal funding of abortion. The bill tries to maintain a strict separation between taxpayer funds and private premiums that would pay for abortion coverage. No health plan would be required to offer coverage for the procedure. In plans that do cover abortion, beneficiaries would have to pay for it separately, and those funds would have to be kept in a separate account from taxpayer money. States could ban abortion coverage in plans offered through the exchange. Exceptions would be made for cases of rape, incest and danger to the life of the mother.

WASHINGTON — Making a last-ditch effort to save his health care overhaul, President Barack Obama on Monday put forward a nearly $1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers.

The White House immediately demanded an up-or-down vote in Congress on the plan, or something close to it. But it’s highly uncertain that such sweeping legislation can pass. Republicans are virtually unanimous in opposing it, and some Democrats who previously supported a health care remake are having second thoughts in an election year. After a year in pursuit, Obama may have to settle for a modest fallback version of what once was his top domestic priority.

Release of the plan on the White House Web site comes just four days before Obama’s one-of-a-kind, televised health care summit with Democrats and Republicans. The White House said the plan would provide coverage to more than 31 million Americans now uninsured without adding to the federal deficit.

On Capitol Hill, Democrats cautiously welcomed the proposal, while Republicans gave a thumbs down.

House Speaker Nancy Pelosi, D-Calif., said in a statement she looks forward to reviewing the plan and discussing it at the summit. “We must pass comprehensive, affordable health insurance reform, and I am hopeful that Thursday’s meeting will help us achieve this goal,” she said, reaffirming her commitment.

House Republican Leader John Boehner of Ohio dismissed the proposal, saying, “the president has crippled the credibility of this week’s summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected.”

Senate Republican Leader Mitch McConnell of Kentucky said it was “disappointing that Democrats in Washington either aren’t listening, or are completely ignoring what Americans across the country have been saying.”

The 11-page plan is Obama’s most detailed proposal since he took up the health care overhaul effort a year ago. At the time, he sought to avoid the problems former President Bill Clinton encountered when he issued Congress a detailed prescription in the 1990s, a plan that failed and contributed to the Democrats lost of Congress in 1994. Now Obama is being criticized for having been too deferential to lawmakers.

White House spokesman Dan Pfeiffer said the plan is an “opening bid” going into Thursday’s summit. It would cover more Americans — but also includes a new tax on investment income that Republicans object to.

“The president is coming into the meeting with an open mind,” said Pfeiffer. “If the Republicans do, too, our hope is that we can find some areas of agreement. If the Republicans bring good ideas to the table we will find ways — look for ways to incorporate those into our proposals.”

Weeks ago, the president and congressional Democrats were on the verge of an historic step — a long-sought remake of the nation’s health care system after a half-century of unsuccessful attempts by scores of politicians. Then Republican Scott Brown stunned Washington with an upset win in the Massachusetts Senate race, denying Democrats their 60-seat majority and reversing any political momentum.

Now, Obama may have to settle for a scaled-down plan that smooths some of the rough edges from the current health insurance system, but stops well short of providing coverage for nearly all Americans. It could include ideas Democrats and Republicans have both supported, such as federal funding for high-risk pools that would extend coverage to people denied because of medical problems, and a new insurance marketplace for small employers and individuals buying their own policies.

Determined not to abandon Democratic bills that took a year of arduous effort, Obama’s plan builds on them. That’s no guarantee that it won’t run into problems.

The plan conspicuously omits a government insurance plan sought by liberals and viewed as a nonstarter by conservatives and some congressional moderates. It includes Senate-passed restrictions on federal funding for abortion that have been adamantly opposed by abortion foes as well as abortion rights supporters.

The new White House plan would give the federal government the power to regulate the health insurance industry much like a public utility. The Health and Human Services Department — in conjunction with state authorities — would be able to deny substantial premium increases, limit them or demand rebates for consumers.

Oversight of insurance companies has traditionally been a state responsibility. Obama’s proposal for a new federal role calls for setting up a seven-member Health Insurance Rate Authority to monitor insurance industry practices and issue an annual report. States that beef up their consumer protection programs would be eligible for a share of $250 million in federal grants.

The plan closely tracks the bill passed by Senate Democrats on Christmas Eve, with changes intended to make it acceptable to their House counterparts.

It would require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums. Insurance companies would be barred from denying coverage to people with medical problems or charging them more.

The plan dramatically scales back a Senate tax on high-cost health insurance plans objected to by House Democrats — and labor unions. Instead of raising $150 billion over 10 years, it would bring in just $30 billion, the administration said. A Medicare payroll tax increase on upper-income earners would help plug the revenue gap. For the first time, Medicare taxes would be assessed on investment income, not just wages.

Like the Senate bill, the Obama plan would create competitive insurance markets in each state for small businesses and people buying their own coverage. It would strip out a special Medicaid deal the Senate bill granted to Nebraska that drew public scorn as the “Cornhusker Kickback” but leaves in a special Medicaid deal for Louisiana. It also would gradually close the Medicare prescription coverage gap, make newly available coverage for working families more affordable. Those changes move in the direction of the House bill.

Estimated to cost about $1 trillion over 10 years, Obama’s plan would be paid for by a mix of Medicare cuts, tax increases and new fees on health care industries.

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