Obama puts forward last-ditch health care plan

Last Updated: Monday, February 22, 2010 - 22:44

Washington: Making a last-ditch effort to save his health care overhaul, US President Barack Obama on Monday put forward a nearly USD 1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers.
Posted on Monday morning on the White House Web site, the plan would provide coverage to more than 31 million Americans now uninsured without adding to the federal deficit. It comes just four days before Obama`s one-of-a-kind, televised health care summit with Democrats and Republicans.

Even with the latest changes, it`s highly uncertain such an ambitious proposal can get through Congress. Republicans are virtually all opposed, and some Democrats who last year supported sweeping health care changes are having second thoughts in an election year. After a year in pursuit of what was once his top domestic priority, Obama may have to settle for a modest fallback.

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.

Determined to avoid facing voters empty-handed, Obama offered a fresh proposal based on Democratic-passed bills.

The plan conspicuously omits a government insurance plan sought by liberals and viewed as a non-starter 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.

Obama, who deferred to Congress on the specifics for more than a year, has finally put forward a detailed plan of his own. By and large, it follows 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 USD 150 billion over 10 years, it would bring in just USD 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. But it would strip out special Medicaid deals the Senate bill granted to certain states, including Louisiana and Nebraska, that have drawn public scorn. 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 USD 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.

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 USD 250 million in federal grants.

Bureau Report



First Published: Monday, February 22, 2010 - 22:44

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