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.
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 Democratic 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, 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 “doughnut hole.”
Addressing one of the thornier provisions, the White House's package would increase the threshold for a tax on high-valued health plans, to $27,500 from $23,000 for families. Then, in 2018, that threshold would apply to all health 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 reform blueprint, one of the most visible yet by an administration that has seen its 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 last December. The added costs tallied by the White House's reform road map 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 Obama 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 revenue-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.