The Facts

In preparation for the bipartisan White House health care summit on February 25, 2010, President Obama unveiled on February 22 his own health care reform proposal. The president's plan largely tracks the health reform bill passed by the Senate in December 2009. The proposal, estimated to cost $950 billion over 10 years, would cover an additional 31 million people and is intended to serve as a springboard for bipartisan discussion at the summit. It is unlikely, however, that the proposal will draw bipartisan support given that the proposal appears to have been crafted to attract additional support from liberal Democratic members of the House of Representatives. Already, the early read from the Congressional Progressive Caucus is positive. The president and Democratic leaders are hopeful that this new proposal, along with the high-profile White House summit and recently announced double-digit premium increases by some insurers, will help produce health reform legislation soon.

Like the December Senate bill, the president’s proposal does not include a public option or the more restrictive abortion language passed by the House. Some key differences made to provisions in the Senate bill include the following:

  • Delaying enactment of the "Cadillac" tax on high-cost insurance plans to 2018
  • Including strengthened measures to address Medicare fraud, abuse and waste
  • Eliminating the “cornhusker kickback” that would have directed extra Medicaid monies solely to Nebraska, and instead increasing the federal share of Medicaid costs for newly eligible beneficiaries in all states
  • Providing additional tax credits to certain U.S. residents to purchase insurance
  • Eliminating the Medicare prescription drug benefit “doughnut hole” by 2020
  • Extending the 2.9 percent Medicare payroll income tax to unearned income for couples earning more than $250,000
  • Including a provision that would give the HHS Secretary—in conjunction with a Health Insurance Rate Authority board—the power to review and determine whether proposed insurance rate increases are “reasonable and justifiable”

What’s at Stake

If the current gridlock over health care reform cannot be resolved in a bipartisan manner, Democrats will likely attempt to use the budget reconciliation process, which requires only a simple majority vote in the Senate, to pass health reform legislation.

Steps to Consider

All in the health sector, including health care consumers, should evaluate the president’s proposal and continue to monitor the progress of the health reform debate.