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January 25, 2011 12:00 AM

Obama willing to adjust reform law

Jessica Zigmond
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    In a State of the Union address that focused on economic growth and called upon the nation to out-innovate, out-educate and out-build the rest of the world, President Barack Obama said he is willing to make improvements to the Patient Protection and Affordable Care Act, but he is unwilling to return to the days when health insurance companies could deny coverage to those with pre-existing medical conditions.

    “Now I've heard rumors that a few of you have some concerns about the new healthcare law,” Obama said, drawing laughs from many members of Congress. “So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you,” he added.

    “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses,” he said, referring to the contentious 1099 provision, which requires businesses to file a 1099 Form with the Internal Revenue Service for every vendor with which they have at least $600 in transactions.

    Earlier Tuesday, Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) introduced a bill to repeal the provision. Obama was emphatic—and received cheers and applause—when he said “instead of re-fighting the battles of the last two years, let's fix what needs fixing and move forward.”

    The president also proposed a freeze in annual domestic spending for the next five years, a move he said would reduce the deficit by more than $400 billion over the next decade, and bring discretionary spending to the lowest share of the nation's economy since the Eisenhower Administration. He also mentioned the work of his bipartisan fiscal commission late last year, which he said concluded that the only way to tackle the deficit is to cut excessive spending wherever it exists.

    “This means further reducing healthcare costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit,” Obama said. “Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the healthcare law would add a quarter of a trillion dollars to our deficit,” he added. “Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice to rein in frivolous lawsuits.”

    The president's mention of medical liability reform also drew applause, including from Republican members. On Monday, Dr. Phil Gingrey (R-Ga.), along with Reps. Lamar Smith (R-Texas) and David Scott (D-Ga.) introduced the Help Efficient, Accessible, Low-cost, Timely, Healthcare, or HEALTH, Act, to lower healthcare costs and improve the relationship between physicians and their patients.

    Rep. Paul Ryan (R-Wis.), chairman of the influential House Budget Committee, offered the official Republican response to the president's speech. In it, he praised the president's call last week for a review of government regulations, and said his party believes the healthcare bill is a great place to start.

    “Costs are going up, premiums are rising, people will lose the coverage they have,” Ryan said of the reform law, adding that jobs are being stifled in the process. Businesses and unions are asking for waivers to mandates in the bill, and the government should not be in the business of choosing winners and losers, said Ryan, who promised that House Republicans will work to replace the bill with fiscally responsible, patient-centered reforms that drive down costs and improve coverage.

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