“The proposal from President Obama helps put health coverage for all Americans and insurance reform back on the front-burner where they belong,” said J. James Rohack, president of the American Medical Association.
Posted on the White House Web site, the president’s 11-page proposal released Monday attempts to merge the approaches advocated earlier by the House and Senate while incorporating additional ideas from Republican members of Congress.
For the most part, however, the proposal is largely reminiscent of the bill passed by the Senate on Christmas Eve, though Obama made several concessions to please House Democrats.
“It is a close cousin of the Senate bill, modified presumably after discussion with members of the House … in order to increase the likelihood that they will vote on it,” said Henry Aaron, a senior fellow in economic studies at the Brookings Institution.
Obama’s proposal does not call for a public option, which is a government-backed insurance plan that aims to reduce premiums by competing with the private sector. Instead, the president chose to include state-based insurance marketplaces, an approach which some House Democrats fear will result in uneven outcomes between states.
Obama would opt to pay for his legislation with a Medicare payroll tax on couples earning more than $250,000 annually and individuals earning more than $200,000. Like the Senate version, his plan omits restrictive language on abortion that would prevent insurers from providing abortion coverage to people with federal subsidies.
Though the proposal largely adheres to the Senate’s approach, it compromises with the House in many ways.
First, it would require all Americans to purchase health insurance, though it would allow for hardship exceptions. Compared to the Senate’s plan, it would also provide greater federal subsidies to low-income families and individuals, and it would close the Medicare prescription drug “doughnut hole” for seniors.
The plan puts forth a new approach to so-called “Cadillac” health care plans—high cost insurance plans which would have been taxed under the Senate bill. It raises the threshold for health care plans hit by the tax, and it delays implementation of the tax for all plans until 2018.
Finally, Obama removed a special deal which would have given Nebraska additional funds to cover increased Medicaid costs resulting from health care reform. Rather than favoring one state, he would provide similar assistance to every state.
The president went beyond previous Senate and House measures by proposing a federal authority to regulate insurance-rate increases. This addition comes on the heels of a 39 percent proposed rate increase by California insurance company Anthem Blue Cross.
White House officials estimate that Obama’s plan would extend coverage to about 31 million uninsured Americans at a 10-year cost of $950 billion—more than the Senate plan ($871 billion) and less than the House ($1.05 trillion). Eliminating several sources of waste and fraud, the bill would cut about $100 billion from the federal deficit during that period.
Still, some interest groups have concerns about the package.
“It’s unfortunate that this proposal does not address Medicare physician payment, as a 21 percent Medicare cut to physicians begins in one week,” said Rohack.
Many Republicans also complain that Obama’s proposal ignores their views. As GOP leaders prepare for Thursday’s summit, many are advocating smaller changes as opposed to a radical overhaul.
“It’s interesting that this proposal came out yesterday when the health care summit is on Thursday,” said Matt Patterson, a policy analyst at the National Center for Public Policy Research, a conservative think tank in Washington. “It seems to me that it would have been fairer to wait and listen to what Republicans at the summit have to say, thinking about those suggestions and then coming out with a proposal which incorporates them. At this point, why even have a meeting?”
Others argue that Obama has taken a number of conservative points into account.
“Built in the bill’s DNA is bipartisanship,” said Aaron, who explained that the individual mandate has Republic roots. “[Obama’s proposal] already incorporates major elements from legislation that Republicans have previously advocated.”
By revealing a blueprint for health care overhaul, experts say the administration is trying to inspire Republicans to submit their own concrete steps for reform during Thursday’s televised meeting. If the bipartisan summit fails to foster agreement between the two parties, Democrats may push the bill forward through reconciliation, passing it in the Senate on a simple majority vote. In this way, Congress could overhaul the health care system without the 60-vote supermajority required to avoid a Republican filibuster.
“The primary audience for this proposal and Thursday’s event is the American public, and the second audience is the Democrats, especially in the House,” said Aaron. “Obama is trying to remove misconceptions and unfounded worries. I think Republicans are invited to make suggestions that will add to or marginally change the bill, but they are not being invited to scrap the bill altogether.”
In the end, Aaron believes specific provisions of the proposal are less important than its ability to gain political support.
“This is an exercise in political feasibility,” he said. “It’s an attempt to fashion a bill that can pass both houses of Congress. Given the importance of that objective, I think the proposal will and should be judged on whether it achieves its main goal: to get passed.”