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Obama Health Care Plan's Price Tag Jumps to $950 Billion

5 years ago
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President Obama unveiled his plan for health care reform Monday morning, four days before the summit at which Republicans and Democrats are scheduled to sit down with the president to forge a bipartisan compromise on the matter.

The White House communications director, Dan Pfeiffer, said Monday that Obama's proposal is intended to "bridge the gaps" between the different health-care-reform bills passed by the House and Senate last year, and represents the Democrats' "opening bid" for the talks with Republicans this week.

"The president is coming to the meeting with an open mind; we hope the Republicans will come with an open mind, too," Pfeiffer said.

The plan, which is posted on the White House's Web site, keeps much of the health reform framework passed by Senate Democrats in December, including a mandate that requires individuals to purchase health insurance, a process for the federal government to subsidize people who cannot afford coverage, and taxes and fees to raise revenue to pay for those subsidies.

Like the Senate-passed bill, the president's plan would create health insurance exchanges, where individual customers could shop for insurance, in some cases across state lines. A public insurance option is not in the president's plan, although Pfeiffer said Obama "supports a public option."

The new proposal does make some significant changes to the Senate bill. For example, it eliminates the "Cornhusker Kickback," the provision negotiated by Sen. Ben Nelson (D-Neb.) to require the federal government to pay for his state's portion of the costs for Medicaid expansion in the bill. Instead, the federal government will pay for 100 percent of the Medicaid increase for all states through 2018, and will cover a declining share after that.

Also, the president's proposal delays the implementation of the excise tax for expensive insurance policies for all policy holders, not just union members (as had been negotiated), until 2018, and increases the threshold of plans that are subjected to the tax to $27,500 for a family plan, an increase from the $23,000 threshold in the Senate bill.

Finally, the White House proposal creates $40 billion in small-business tax credits to help employers pay for insurance for their workers, although only businesses with more than 50 employees will pay penalties for not doing so.

One element in the plan that neither the House nor Senate has passed is a proposal to give the federal government authority over insurance rates. Right now, rates are regulated only at the state level, and in some states are not regulated at all. Sen. Dianne Feinstein (D-Calif.) introduced a federal-rate-authority measure this month after California's largest insurance provider for individuals alerted its customers that their premiums could increase by as much as 39 percent this year.

White House adviser Nancy-Ann DeParle estimated that the changes proposed by the White House would increase the cost of the overall health care bill to $950 billion over 10 years, which she said will be offset by additional fees for health providers and penalties on large employers that do not cover their workers.

Democrats struggled earlier this year to move health care reform to a final vote, but House and Senate negotiators failed to come to agreements on several issues, including language restricting abortion financing. Pfeiffer said Monday that the president will recommend using the Senate abortion language, originally proposed by Nelson, rather then the stricter House language championed by Rep. Bart Stupak (D-Mich.).

Since the election of Sen. Scott Brown (R-Mass.), Democrats have searched for a process to move reform through Congress with or without his support, including the possibility of breaking the larger package into small pieces for individual votes, or using a Senate procedure known as "reconciliation," which allows legislation directly related to the federal budget to pass the Senate with 51 votes, instead of having to clear the 60-vote threshold required for most other bills.

With expectations low that Thursday's televised meeting will yield many real results, senior Democrats have refused to rule out any procedural tactic to pass health care reform this year. At the end of January, Speaker Nancy Pelosi explained the approach Democrats are taking to pass health care reform.

"We will move on many fronts, any front we can," she told reporters at a press conference. "We will go through the gate. If the gate is closed, we will go over the fence. If the fence is too high, we will pole-vault in. If that doesn't work, we will parachute in. But we are going to get health care reform passed for the American people for their own personal health and economic security and for the important role that it will play in reducing the deficit."

On Monday, White House advisers indicated that reconciliation remains a viable option. "There have been no determinations on which process we will use going forward," Pfeiffer said. But he warned that Democrats will examine all of their options, "if the opposition takes the extraordinary step of filibustering health care reform."

"The president expects and believes the American people deserve an up-or-down vote on health care reform," Pfeiffer said.
Filed Under: The Capitolist

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