Democrats Are Increasingly Confident About Reform

Despite costs and public skepticism, Democrats are increasingly confident that they'll enact a vast health care overhaul. McClatchy reports: "The White House is ramping up its behind-the-scenes lobbying of Congress. President Barack Obama is signaling that he could drop some key principles of his campaign if necessary to jump-start negotiations, opening the door to broad tax increases and a plan that could, he now concedes, push people into a government-run insurance program against their will. Senate Democrats also said last week that they were heading toward agreement again after a momentary stall. ... Republicans, too, concede that the Democrats who control Congress and the White House are back on track to push an overhaul into law."

According to McClatchy, "Two big questions still loom: How will the government pay for insurance for the 50 million people now uninsured, and will the government offer its own insurance to compete with 1,300 private insurance companies in hopes of driving down costs? Obama thinks he's found a way to pay for almost all of a price tag estimated at $1 trillion over 10 years: by cutting Medicare and Medicaid and by raising taxes on those making more than $250,000 a year through limits on their itemized tax deductions. But many congressional Democrats prefer to raise taxes on health insurance itself, which is now deducted from taxable income. Some propose capping the deduction at $13,000 to $17,000 a year, so that the most expensive plans would be taxed and even discouraged. Obama, who opposed taxing health coverage when Republican John McCain proposed it during their campaign, now says he's open to some version of it."

McClatchy notes: "Congressional Democrats also are debating whether to include a so-called 'public option'... Supporters say it would create competition and drive down costs; critics say the government plan, with no profit margin and perhaps taxpayer subsidies, would drive private insurers out of business. Obama conceded last week that the availability of lower-cost government insurance could violate one of his keystone promises: not to force people to give up doctors or insurance plans they like. He acknowledged that companies providing health insurance might choose the less expensive government insurance over their private insurers, thus forcing employees into the government fold...The government insurance option isn't yet final, however. Several Senate Democrats propose instead that nonprofit cooperatives also could provide competition and drive down costs" (Thomma and Lightman, 6/28).