Obama offers new health-care plan; GOP slams it as 'government takeover'

For Immediate Release:

February 22, 2010

Contact:Michael D. Shear and Dan Balz

Washington Post

President Obama made it clear Monday morning that he intends to make a final push for a comprehensive overhaul of the nation's health-care and insurance system, offering a new health-care plan that largely embraces the approach already taken by the U.S. Senate.

The plan, which went live on the White House Web site at 10 a.m., rejects repeated calls from Republicans to scrap Democratic efforts from last year and start over. Instead, it attempts to merge the Senate legislation with its counterpart in the House in ways that would address some of the most controversial provisions in the stalled bill.

Shortly after the president's plan went online, Republicans slammed it as "the same massive government takeover of health care" and said it undermined the bipartisan goals of the summit this week.

"This new Democrats-only backroom deal doubles down on the same failed approach that will drive up premiums, destroy jobs, raise taxes, and slash Medicare benefits," said House Minority Leader John A. Boehner (R-Ohio). "This week's summit clearly has all the makings of a Democratic infomercial for continuing on a partisan course."

Among the changes Obama seeks is a delay of the tax on high-end insurance plans until 2018, an end to the special Medicaid deal that negotiators had cut for Nebraska Sen. Ben Nelson (D) and new federal authority over health-care insurance rate increases. The plan does not call for a public option health plan despite pressure from progressives in Obama's Democratic party to do so.

Senior White House officials said the 11-page summary of the changes, labeled "The President's Proposal," would serve as the starting point for the bipartisan, televised health-care summit to be held Thursday. They urged Republicans to come together around their own proposal and make it public.

"This is the opening bid for the health meeting," White House Communications Director Dan Pfeiffer said. "We took our best shot at bridging the differences. It makes some strong steps to improving the final product. . . . The president is coming to the meeting with an open mind."

Pfeiffer said the White House has made "no determinations" about whether Democrats might use a parliamentary tool called "reconciliation" to pass the bill without 60 votes in the Senate. But Pfeiffer hinted that the White House is open to the idea, saying that the president's proposal is designed for "maximum flexibility."

"The president expects and believes the American people deserve an up-or-down vote on health care," Pfeiffer said. "This is designed to provide us maximum flexibility if the opposition decides to take the extraordinary step of filibustering health reform."

By offering his own proposal, Obama is betting that Americans watching the health-care summit will provide his efforts new momentum after a nearly year-long process that ground to a halt while negotiators cut deals in back rooms and Republicans intensified their criticisms.

But the decision is not likely to sit well with Republicans, who have concluded that most Americans do not want radical changes to their health care. Instead, the GOP has been pushing a series of modest changes they say could bring down costs and improve coverage, including tort reform and new freedoms for insurance companies to sell their policies across state lines.

Obama's health plan does not include those Republican proposals, although White House officials said several times Monday morning that the president will be open to Republican ideas at the meeting on Thursday.

The president's plan does leave intact language relating to abortion already in the Senate bill that is less restrictive than the House measure. That would leave open the possibility that conservative Democrats in the House who oppose the use of federal money for abortion would oppose the measure.

Among the key changes that Obama would make to the Senate bill:

* Obama's plan would raise the threshold for the expensive health-care plans that would be hit with an excise tax, and would delay the imposition of that tax on any plan until 2018. That would essentially put in place for all such plans a deal that had been worked out last month for labor-negotiated plans.

* The plan would eliminate a deal that negotiators made with Nelson to provide Nebraska with additional assistance for increased Medicaid costs his state might encounter under the legislation. Instead, the plan adds fees so that similar help can be given to states across the board.

* The president's plan would close the "doughnut hole" for seniors by increasing the amount of money provided for rebates to beneficiaries and by reducing co-insurance payments by 2020.

* Low-income families and individuals who do not have insurance would receive higher subsidies from the federal government to buy the insurance than had been the case under the Senate plan. Individuals would still be required by the government to get health insurance, but hardship cases would be exempted.

Obama is calling for new government power to regulate insurance-rate increases as part of comprehensive changes to the health-care system that the White House unveiled on its Web site Monday. To try to generate support for his ideas, the Obama administration recently has pointed to rate increases as evidence that his proposed changes are necessary.

Last week, Health and Human Services Secretary Kathleen Sebelius drew attention to a California health insurance company, Anthem Blue Cross, which planned rate increases of up to 39 percent. Obama mentioned the increases in his weekly radio address and at a town hall meeting in Nevada.

The proposal released Monday would give Sebelius new authority to oversee, and potentially block, rate increases that are deemed unfair. It would be based, at least in part, on legislation initially proposed last week by Sen. Dianne Feinstein (D-Calif.).

The legislation would create a rate board, called the Health Insurance Rate Authority, that would broadly determine what increases are reasonable and justifiable. The seven-member board would have consumer, industry and medical representatives, as well as experts in health economics.

A top official said Sebelius would conduct an annual review of premium increases and could work with state insurance officials to deny increases that were seen as excessive.

Republicans have criticized the president's health-care proposals as too reliant on government involvement. Obama's latest proposal drew similar fire.

"At first glance, this seems to be an admission from the Obama administration that their massive government takeover of health care will, despite their promises, increase health-care premiums for millions of Americans," said Kevin Smith, a spokesman for Boehner.

But it could prove tricky for Republicans: They must be careful not to be seen in an election year as siding with big insurance companies that are imposing drastic rate hikes on Main Street Americans.

Senior Obama aides said the changes Obama is proposing could add up to $200 billion to the Senate bill's $871 billion price tag.

Republicans have accused Obama of using Thursday's summit as political theater, and they had raised the prospect of not attending. But the Senate's top Republican promised Sunday that he and his members are "ready to participate," while accusing Democrats of being "arrogant."

"You know, they are saying, 'Ignore the wishes of the American people. We know more about this than you do. And we're going to jam it down your throats no matter what,' " Senate Minority Leader Mitch McConnell (R-Ky.) said on "Fox News Sunday."

Pfeiffer said in response that "the upcoming meeting is an opportunity to get beyond oft-repeated and completely false talking points like these."

McConnell dismissed the idea of a GOP boycott, saying that "we're discussing the -- sort of the makeup of the room and that sort of thing, but yeah, I intend to be there and my members will be there and ready to participate."

He said, however, his party will continue to oppose Democrats if they try to use reconciliation.

"We believe that we think a better way to go is to, step by step, move in the direction of dealing with the cost issue, targeting things like junk lawsuits against doctors and hospitals, interstate insurance competition, small-association health plans," he added.

Health care dominated discussions at the National Governors Association for a second day Sunday. Four leaders of the organization issued a plea to Obama and Congress for states to have a greater voice in the deliberations over health care. But they had no plan to offer; nor did they ask to be included Thursday.

Obama met with the governors Monday at the White House.