White House Unveils Revamped Reform Plan, GOP And Industry React

President Obama began a final surge to overhaul the nation's health system Monday, unveiling a White House-drafted plan days before a planned meeting with Republicans, The Washington Post reports. "This is the opening bid for the health meeting" on Thursday, a White House spokesman said. The president's proposal reflects Senate Democrats' already-passed overhaul plan, which Republicans have said should be scrapped. "By offering his own proposal, Obama is betting that Americans watching the health care summit will provide his efforts new momentum" (Shear and Balz, 2/22).

Link to the president's proposal (Kaiser Health News, 2/22).

"The bill is intended to achieve Mr. Obama's broad goals of expanding coverage to the uninsured while driving down health premiums and imposing what the White House calls 'common sense rules of the road' for insurers, including ending the unpopular practice of discriminating against people with pre-existing conditions," The New York Times reports. "The proposal would provide more money to help cash-strapped states pay for Medicaid over the next four years and eliminate the unpopular 'donut hole' coverage gap in the Medicare prescription drug program" (Stolberg and Herszenhorn, 2/22).

The Senate-leaning bill does includes compromises to assuage Democratic House members, the Los Angeles Times reports. "It boosts subsidies to help low- and moderate-income people buy insurance on the new state exchanges, a key demand of House Democrats. (The plan does include a national exchange, as some House Democrats had wanted.)" In addition, it would scale back the proposed "Cadillac tax" on high-cost health plans (Levey, 2/22).

The new White House's proposal would cost $950 billion over 10 years, more than the bill approved by the Senate but less than the House measure. It was posted on the White House Web site Monday morning," The Wall Street Journal reports. "The proposal doesn't incorporate any major Republican ideas that weren't already in the Senate bill, although aides have said the president is open to doing so" (Meckler, 2/22). 

The New York Times Prescriptions blog: House Minority Leader John Boehner, R-Ohio, said in a statement, "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. 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" (Herszenhorn, 2/22).

Fox News: Other Republicans added that the proposal ignores Republican ideas and popular sentiment. Senate Minority Leader Mitch McConnell, R-Ky., said, "It's disappointing that Democrats in Washington either aren't listening, or are completely ignoring what Americans across the country have been saying." The White House counters that 160 Republican amendments have been included in congressional versions of the legislation, even lists GOP-sourced ideas on its Web site, including anti-fraud measures and employer wellness programs (2/22).

Politico: The president's proposals is "aimed at pleasing the warring wings of his own party and bringing along skeptical voters, in part by including a provision to put off an unpopular tax on high-cost health insurance plans until 2018." It appears designed to "allay liberals in the House" without going so far as "to alienate Senate moderates." Additionally, the plan "also gives the federal government sweeping new powers to curb exorbitant rate hikes by the nation's health insurance companies ... – a proposal designed to win over skeptical voters as Obama announces his own health insurance legislation for the first time Monday." This provision is likely an effort by Obama "to play off voter anger toward recent double-digit increases by Anthem Blue Cross of California and show that his plan is designed to protect vulnerable Americans, both those with insurance and those who are seeking to obtain it" (Brown, 2/22).

The New York Times reported Sunday, "[t]he president's new provision [on insurer's rates] also seemed to offer Republicans an opening for a new line of criticism - that Mr. Obama and Democrats are anticipating the possibility of hefty price increases for health insurance even after their big legislation is adopted." Republicans had already begun criticism of the yet-unreleased proposal Sunday. Republican Senate Leader Mitch McConnell told Fox News, "If they are going to lay out the plan they want to pass four days in advance," he said on Fox, "What are we discussing on Thursday?" (Herszenhorn and Pear, 2/21).

Investors seemed to ignore Obama's rate-curbing plan as stocks for the country's health insurance firms rose Monday, MarketWatch reports. "[Investors] apparently doubted such an initiative would see the light of day." Drug firms, however, "were mostly mixed as Obama proposed to close the Medicare donut hole as well as increase tax penalties on the industry" (Britt, 2/22).

Associated Press/ABC News: "[T]he Blue Cross and Blue Shield Association warned against separating premium reviews from the responsibility of state regulators to make certain that health insurers have enough money to pay claims. A separation like that could lead to 'multi-plan insolvencies,' the association said in a statement." The insurer WellPoint said soaring medical costs are the cause of rate increases, rather than insurer's business practices (Murphy, 2/22).

Roll Call: Business groups rejected plans that include mandates for individuals to buy insurance or taxes on business that don't offer coverage to employees. The Chamber of Commerce and other groups said in a letter to the White House, "We strongly urge you to avoid the punitive approach taken by the House and Senate-passed bills and instead focus on a fresh approach that places top priority on immediately reducing the cost of care and coverage for all" (Roth, 2/22).