February 23, 2010 in Nation/World

Obama offers up health reform

President ends near-silence with 10-year, $1 trillion proposal
David Lightman And Steven Thomma McClatchy
 

At a glance

The White House bill:

•Costs $950 billion over 10 years.

•Requires everyone to buy insurance or pay a penalty, but adjusts the penalty for some workers.

•Does not include a public option.

•Does not require companies to provide insurance, but penalizes those that don’t.

•Raises Medicare taxes.

•Fully closes the “doughnut hole” that can cause a gap in drug coverage under Medicare, but cuts payments for Medicare Advantage.

•Establishes new federal oversight of insurance company rate increases.

WASHINGTON – President Barack Obama on Monday launched a last-ditch effort to revive health care legislation that’s unlikely to gain Republican support but may restore Democratic momentum for the bill by placing the president squarely at the center of the messy process of drafting legislation.

“It sends a clear signal what he’s comfortable with,” said Stephen Zuckerman, a senior fellow at Washington’s Urban Institute, a research group.

Democratic loyalists were enthusiastic, viewing Obama’s nearly $1 trillion proposal as a sign that his yearlong reluctance to engage in shaping the bill had ended.

“We’re very pleased to see the president being more forceful in his leadership,” said Ralph Neas, who heads the National Coalition on Health Care, an advocacy group. “He is the one indispensable player in this mix.”

Obama’s blueprint, or a bipartisan summit to discuss health care scheduled for Thursday, seemed unlikely to trigger a new bipartisan effort to pass a bill, however. Republicans reacted bitterly to the proposal.

“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,” said House Republican leader John Boehner of Ohio. Senate Republican leader Mitch McConnell of Kentucky branded the Obama plan “another partisan, back-room bill.”

Republicans want the president to start over. Forget it, White House Communications Director Dan Pfeiffer said.

“Starting over makes no sense,” he said.

Obama’s proposal, which the White House said would cut the budget deficit by $100 billion over 10 years – a figure that couldn’t be verified independently – borrows heavily from legislation that the Senate and House of Representatives passed last year, but with some significant changes.

Most Americans would have to get insurance coverage or face penalties, and there would be federal help for lower-income families who struggle to afford premiums.

The president, however, axed the so-called “public option” of a government-run insurance plan, which had drawn opposition from moderates and conservatives.

He also scaled back the tax on high-end policies, which labor unions had opposed. Under Obama’s proposal the tax wouldn’t go into effect until 2018, five years later than it would under the bill the Senate passed. He also increased the premium levels at which the tax would kick in to $10,200 for singles and $27,500 for families.

That would cut the amount of money the tax would raise from $150 billion to about $30 billion through the end of the decade.

Obama would keep the Senate-passed plan’s Medicare tax increase on individual wages above $200,000 for individuals and $250,000 for couples, which would raise the current rate from 1.45 percent to 2.35 percent. He would add a 2.9 percent assessment at that level for income from interest, dividends, annuities, royalties and rents.

The president’s proposal has another new feature: The federal government, working with state officials, would be able to roll back health insurance premium increases, at least for a while. Under the proposal, federal and state authorities work together, and “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates or take other actions to make premiums affordable.”

In addition, insurers could be required to provide rebates if they were found to be spending too much on administrative costs and advertising.

The chief value of the plan, however, analysts said, is the role that Obama is assuming after letting Congress craft its own legislation, a strategy that backfired by making Washington look dysfunctional.

That may help Democrats maintain unity on the proposed overhaul, something that has been difficult despite them controlling 59 of the Senate’s 100 seats and 255 of the House’s 435 seats.

“Democrats will have more comfort now in getting behind a plan,” said Len Nichols, the director of the health policy program at the New America Foundation, a public policy institute.

Said Neas, “There have been those on the Hill who have been waiting for the president to say, ‘Here’s what I want.’ ”


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