In a plan the White House says “bridges the gap” between House and Senate health reform bills, President Barack Obama laid out a comprehensive proposal he feels will make coverage more affordable and accessible, while calling for greater accountability by stakeholders in the market.
Barack Obama
Today (Feb. 22), the White House unveiled the president’s proposal for health care reform, which bypasses a public health insurance option favored by the House, and instead promotes health insurance exchanges where private insurers will compete for business based on cost and quality, according to a copy of the proposal. The plan will cost an estimated $950 billion over the next decade, but would reduce the deficit by $100 billion over the same time frame, according to the White House.
Another feature of the plan includes the creation of a new Health Insurance Rate Authority, providing federal assistance to states in conducting reviews of “unreasonable” rate increase requests, according to the White House.
In Obama’s plan to reduce the number of uninsured Americans is a middle class tax cut, reducing premium costs for millions of families and small businesses and aiding 31 million in accessing coverage, according to the White House.
While the House and Senate bills seek to increase competition for private insurers to drive down costs – through a public option and increasing Medicare coverage – the president’s plan lowers premiums for families of four with incomes between $22,000 and $88,000. It also gives families with earnings below $55,000 extra cost sharing assistance.
The proposal includes an individual mandate to secure coverage, with exemptions for hardships. It mirrors the Senate bill by forgoing a mandate on employers to offer or provide insurance, but does require them to help defray the cost if taxpayers are “footing the bill for their workers,” the proposal states, enacting a $2,000 per person fine for large businesses not aiding employees.
In what can be seen as a break for insurance companies, the president’s plan also delays and reforms proposed taxes on high-cost insurance plans and a proposed $67 billion assessment on insurers. Under the president’s plan, the effective date for excise taxes on so-called “Cadillac” health plans is delayed from 2013 to 2018 to allow more transition time. The proposal would raise the amount of premiums exempt from the assessment for individuals from $8,500 to $10,200, and from $23,000 to $27,500 for families.
In his weekly address, Obama continued the administration’s focus on health insurance companies, calling for Democrats and Republicans to come together to aid the American public and enact strong changes.
“The bottom line is that the status quo is good for the insurance industry and bad for America,” Obama said in the address. “Over the past year, as families and small business owners have struggled to pay soaring health care costs, and as millions of Americans lost their coverage, the five largest insurers made record profits of over $12 billion. And as bad as things are today, they’ll only get worse if we fail to act.”
Timing of proposal details
The White House report comes a few days before a televised bipartisan health care summit to iron out a final piece of reform legislation and just days after a report highlighting insurers’ premium hikes as a key reason for reform.
The report, by the U.S. Department of Health and Human Services, noted several insurers across the nation and their recent premium increase requests amid billions in profits for the companies making the requests. HHS Secretary Kathleen Sebelius said in a statement that while families are struggling, insurance companies were not and that is a key reason for reform.
In response to the report, America’s Health Insurance Plans (AHIP), representing nearly 1,300 insurers, again reiterated its stance of more than a year now that reform must focus on the entire health care system and not just health insurance.
“It’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation,” said AHIP President and CEO Karen Ignagni said in a statement.
The rising premiums, Ignagni said, are due to “soaring medical costs and because younger and healthier people are dropping their coverage due to the economy.”
AHIP did not immediately have a statement in response to the president’s health plan plan proposal.
Additional details
Other details of the plan, available online, are:
- Eliminating Nebraska’s Medicaid exemption, secured during the Senates’ negotiations over their health care bill;
- Closing the Medicare prescription drug “doughnut hole,” by replacing the $500 increase in the initial coverage limit with a $250 rebate and phasing down the coinsurance so it is the standard 25% by 2020 throughout the coverage gap;
- Strengthening provisions to fight fraud, waste and abuse in the Medicaid and Medicare systems;
- Investing $11 billion in community health centers;
- Broadening the Medicare Hospital Insurance tax base for high-income taxpayers by adding a 2.9% assessment on income from interest, dividends, annuities, royalties and rents on taxpayers making more than $200,000 as individuals and $250,000 for married couples; and
- Aiding states in the cost of Medicaid and the Children’s Health Insurance Program (CHIP).
Obama’s health reform plan omits public option, targets premium hikes via IFAwebnews.com .
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