White House Unveils New Health Care Proposal

BY Jason M. Breslow  February 22, 2010 at 10:18 AM EDT


Updated 11:55 a.m. ET

In an “opening bid” leading to this week’s health reform summit, President Obama released his own version Monday morning of a health reform proposal that he hopes to pass later this spring. It’s a plan that is built on the foundation of the Senate bill passed in December, but with some significant changes, including the creation of a national insurance regulating board, additional Medicaid money for states, more subsidies to help people buy insurance, and delaying the onset of an excise tax on high-cost insurance plans.

The most significant change comes in the form of a national insurance regulator. A new Health Insurance Rate Authority would be created to oversee and push back “if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable,” according to a summary of the plan released on WhiteHouse.gov. The new proposal comes in the wake of a recent announcement by California health insurer Anthem Blue Cross planned to increase premiums up to 39 percent for customers with individual policies in the state.

White House officials said in a conference call this morning that they estimate the total cost of their package around $950 billion — which is higher than the Senate bill — but believe their proposal would be deficit neutral because of changes made in the revisions.

According to text released by the White House, the president’s plan would:

• Close the Medicare prescription drug “donut hole” coverage gap

• Increase the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and start it in 2018 for all plans

• Provide significant additional federal financing to all states for the expansion of Medicaid

• Improve insurance protections for consumers and creating a new Health Insurance Rate Authority to provide Federal assistance and oversight to States in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans.

The New York Times notes that the White House measure closely echoes the version of legislation passed by the Senate on Christmas Eve. Senior White House officials acknowledged that they used that bill as a template, according to the Times report.

Politico, meanwhile, reports that the plan “appears designed to allay liberals in the House while not going too far in a way that would alienate Senate moderates. For example, it vastly scales back the tax on ‘Cadillac’ insurance plans, which will please liberal Democrats, but by leaving out the public option, hopes to win over moderates.”

“I do believe that there is more fertile soil today than when we first took this up,” House Minority Whip James Clyburn, D-S.C., told the Associated Press.

Republicans, however, were quick to attack the White House plan as detrimental to a final deal on health care reform.

“The president has crippled the credibility of this week’s summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected,” said House Minority Leader John Boehner, R-Ohio.

National affairs senior producer Murrey Jacobson contributed to this report.