The Obama administration this morning released a roughly $950 billion health reform proposal that tracks closely with the Senate's already-passed bill, but would increase coverage subsidies, require greater accountability for health insurance companies and direct the federal government to pick up most of the tab for a deep expansion of Medicaid.
Obama releases $950 billion health reform plan
The package, however, does not contain a government-backed insurance option despite some momentum on Capitol Hill to include such a measure.
The 11-page outline, released online on the White House's Web site, comes just days before the planned Democrat and Republican healthcare summit on Feb. 25, where lawmakers hope to find a bipartisan path to reform. “We view this as an opening bid for the health meeting,” White House spokesman Dan Pfeiffer said, adding that the president would attend the confab open to new ideas.
By design, President Obama's proposal includes a number of “fix its” to both bills, many of which were sticking points as Democratic leaders tried to meld the two together. For instance, the blueprint eliminates the Nebraska Medicaid provisions, the so-called “Cornhusker Kickback,” while providing a boost to all states in federal dollars for the safety-net program. It also closes the Medicare prescription drug coverage gap, known as the “donut hole.”
Addressing one of the thornier provisions, the White House's package would increase the threshold for an excise tax on high-valued health plans to $27,500 from $23,000 for families and starting it in 2018 for all plans.
Also addressed are measures to fight fraud, waste and abuse in Medicare and Medicaid, as well as provisions to shield private health insurance customers from unjustified rate increases.
The proposal includes a measure that would give the federal government more oversight over private insurers' rate increases, calling for the creation of a Health Insurance Rate Authority, which would enforce and monitor insurance market behavior.
Last week, HHS Secretary Kathleen Sebelius released a five-page report that highlighted recent proposed rate increases in the individual market across seven states. The report highlighted Blue Cross and Blue Shield of Michigan, which last year requested a 56% rate hike on individual policies, which later was negotiated down to 22%. Likewise, Regence Blue and Blue Shield of Oregon requested a 20% rate increase, while three insurers in Rhode Island asked for 13% to 16% increases. Most recently, Anthem Blue Cross of California, a WellPoint subsidiary, said it would bump its rates up to 39% for those customers in the individual market—a move they later delayed but said was needed to offset the overall high cost of healthcare.
The reform blueprint, one of the most visible yet by an administration that has seen it's message on healthcare get crossed and favorability polls dip, strengthens the proposed requirement for employers to provide coverage by increasing the fee for not doing so to $2,000, up from the $750 in the Senate's reform bill passed in December. The added costs tallied by the White House's reform roadmap are offset by tweaks to the House and Senate's revenue raisers, said White House Office of Health Reform Director Nancy-Ann DeParle.
Changes to the affordability structure and the enhanced coverage proposed by the administration comes to roughly $75 billion, which would be offset by overall health savings as well as changes in penalties to employers and individuals who don't offer or buy coverage. Other revenues raisers include an expansion of the Medicare tax to include unearned or investment income and about $10 billion in fees on branded pharmaceuticals, DeParle said.
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