President Obama's Health Care Plan Proposes Fixes to Senate Bill

White House officials say proposals set stage for upcoming bipartisan summit.

February 21, 2010, 8:58 PM

WASHINGTON, Feb. 22, 2010— -- The White House today unveiled President Obama's health care overhaul bill, which it says will expand health insurance to 31 million more Americans and reduce the federal budget deficit by $100 billion in the next 10 years.

The White House also released the changes Obama wants to see in the Senate Democratic health care bill. Even before its release, the White House's plan had already met with fierce Republican resistance.

The White House estimates the cost of their health care plan, with the proposals to fix the Senate bill, would be roughly $950 billion over ten years, but there is unlikely to be a cost estimate from the nonpartisan Congressional Budget Office. CBO director Douglas Elmendorf said today there is not yet enough information from the White House to create a detailed cost estimate yet and even if there was, the assessment wouldn't be done this week.

Administration officials call the health care bill a "starting point" point for Thursday's televised, bipartisan discussions on health care overhaul.

"I think it's a starting point in as much... as Republicans come to Thursday's meeting with constructive proposals that they're willing to discuss," White House Press Secretary Robert Gibbs said today.

Nancy-Ann DeParle, director of the White House Office of Health Reform, said this is "the Senate bill with some targeted and important changes that achieve the president's goal and bridge the gap between the House and Senate proposals."

A senior White House official said the proposal was "informed by our conversations from negotiations" before Sen. Scott Brown, R-Mass., was elected, thus depriving Democrats of their 60-vote majority, as well as from subsequent discussions.

The White House proposal doesn't just represent ideas, but a potential strategy -- to have the House pass the Senate bill, with fixes to come to make it more palatable.

With Brown's win in Massachusetts last month, Democrats no longer have a filibuster-proof majority, so they would pass the "fix" using a controversial maneuver that requires only 51 votes.

White House officials are thus signaling that Thursday's discussion won't be just a parlor meeting to chat about health care principles, though they insist their minds will be open to incorporate some Republican ideas.

"The president believes that we have done a lot of very good work on health reform over the last year, and starting from scratch doesn't make sense," Pfeiffer said. "However, we are coming to this meeting with an open mind to additional ideas and we hope the Republicans will do the same."

Pfeiffer said the White House hopes the Republicans will put forward their plan this week.

"There are a number of Republican plans out there," he said. "Hopefully, they can work together and consolidate."

House Speaker Nancy Pelosi, D-Calif., believes passing the bill is "possibly doable," a senior White House official said. "But she may ultimately decide the math is impossible."

If that does not work, the next plan is to push a more modest bill -- a smaller expansion of health insurance reform, some tax breaks for small businesses to help provide insurance for employees, a more modest expansion of Medicaid and the creation of the health insurance exchanges.

Among the fixes to the Senate bill that the president is proposing are "an additional series of measures proposed by Republicans to eliminate waste, fraud and abuse," a White House official said. "The president believes the bipartisan discussion on Thursday will be the most productive if Democrats come to the table with a consolidated proposal -- what he's releasing today -- and he hopes the Republicans will follow suit and come with their own unified proposal. He'll be open to Republican ideas, and he hopes they'll be open to ours."

The Democratic Senate bill includes a tax on insurance companies for high-cost health care, so-called Cadillac insurance plans. The White House is proposing to add a transition period for everyone, not just union members, who had opposed the tax. The tax wouldn't start until 2018; for family plans costing $27,500 and more, with exceptions for high-risk professions and others. At the same time, instead of raising $150 billion in 10 years, it would bring in just $30 billion, per the White House proposal.

Key changes that the White House wants to see removed include the so-called "Cornhusker compromise," the deal to win the vote of Democratic senator from Nebraska, Ben Nelson, by having the federal government pay for his state's Medicaid expansion.

For the president, the conversation starts with four key parts of the Senate health care bill, which passed on Christmas Eve after weeks of deadlock.

First are insurance reforms, such as prohibiting insurers from being able to deny coverage based on pre-existing conditions, a reform that Republicans have also said they would like to see happen.

Second, as proposed in both the House and Senate bills, the president wants to see health insurance exchanges created at the state level to ensure competition, a thorny point for Republicans.

Third, there would be no option of a government-run insurance plan that would compete with the private sector. The House health care bill includes a public option, but the Senate legislation does not, and even though the president initially pushed public option as part of a health care overhaul package, he has said that to achieve compromise it would need to be given up. Republicans are staunchly against any public option, saying it would hurt competition and the private sector.

Fourth, all Americans would be required to have health insurance coverage, and Medicaid would be expanded for low- and middle-income Americans to purchase health insurance. Both are points of contention for Republicans.

White House Unveils President Obama's Health Care Plan

The language regarding abortion, also from Nelson, would allow women who receive government subsidies to purchase insurance policies that cover abortion, but they would have to write separate checks. In some ways this is less restrictive than the House language from Rep. Bart Stupak, D-Mich., that would prohibit women who receive government subsidies from taking out plans that provide abortion coverage.

A brand-new proposal would give Health and Human Services Secretary Kathleen Sebelius the power to block insurance company premium increases if they don't meet certain criteria, for states where regulators do not already have that authority. Sen. Dianne Feinstein, D-Calif., came up with the proposal after news surfaced that the largest insurer in her home state, Anthem Blue Cross, was proposing premium increases of up to 39 percent on individual health insurance plans.

Under the new proposal suggested by Feinstein, the Health and Human Services secretary would work with state regulators to develop an annual review of rate increases. A new body called the Health Insurance Rate Authority would be created and would every year issue a report setting guidelines for reasonable rate increases. If proposed premium increases are not justifiable per those Health Insurance Rate Authority guidelines, the Health and Human Services secretary or state regulators could block them.

Republicans are opposed to price fixing measures and also argue that this proposal is an acknowledgement that the new health care plan itself will not keep premiums down.

Gibbs today disputed the claim that this proposal is an example of big government and said the plan would ensure that Americans don't see sharp premium hikes until insurance marketplaces are up and running.

"I think our strong belief is that it would be redundant authority after which we get health care reform implemented," Gibbs said. "There's a time in which exchanges will be set up and there's a... time in which we want to ensure that rate increases aren't slipped through as a part of the gap between when a bill is signed into law and when those exchanges are up and regulating price increases."

Republicans insist that the White House and Democrats scrap the health care bills altogether and start afresh.

"The president told the American people we would see the details of his health care bill, but instead we are just seeing the tip of this iceberg that will sink our economy and wreck the health insurance millions of Americans have and like," Rep. Dave Camp, R-Mich., the top Republican on the House Ways and Means Committee, said in a statement today.

House Minority Leader John Boehner, R-Ohio, panned Obama's proposal.

"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," Boehner said in a statement. "This week's summit clearly has all the makings of a Democratic infomercial for continuing on a partisan course that relies on more backroom deals and parliamentary tricks to circumvent the will of the American people and jam through a massive government takeover of health care."

Senate Minority Leader Mitch McConnell, R-Ky., blamed the White House for not listening to Americans.

"It's disappointing that Democrats in Washington either aren't listening, or are completely ignoring what Americans across the country have been saying," McConnell said in a statement.

Republicans argue that there is no need for a large, comprehensive health care bill like the president proposed, but rather smaller, piecemeal health insurance reforms. They argue that the plan itself will not lower premiums for Americans and cut overall costs.

The White House argues that GOP ideas have already been incorporated into the Senate legislation, much of which was negotiated with three Senate Republicans -- Sens. Mike Enzi of Wyoming, Chuck Grassley of Iowa, and Olympia Snowe of Maine -- but clearly it is also a goal of Thursday's bipartisan summit for the public to see the president reaching across the aisle.

Even if Republicans and Democrats are not able to come together at this week's summit, the White House is hoping to bring the GOP leadership into a "circle of accountability" -- holding them accountable for what happens on the health care front.

Even as the White House continues its push toward health care overhaul, despite resistance from Republicans, there is uncertainty over whether it will translate into legislation.

"It's nice to say, let's be bipartisan. But we're a partisan nation. We were raised as a partisan nation. The only bipartisanship you ever see is when they finally sign a bill and everybody says, gee, isn't that wonderful," former Secretary of State Colin Powell said on CBS' "Face the Nation" Sunday. "I don't think that they have yet figured out how to resolve these serious differences that exist between both sides or two sides of the political spectrum."

Nevertheless, Republican leaders such McConnell say they will attend the event this week, even if they are skeptical.

The meeting will be televised live on CSPAN Obama promised as a candidate that all health care discussions would be open to the public, but that did not happen. The president has said he regretted that.

A senior White House official told ABC News that one of the president's goals for this week is to "cleanse" the health care reform bill and the way it was processed.

"We had to make so many decisions quickly in a very difficult set of circumstances that after awhile, we started worrying more about getting the policy right than getting the process right," the president said. "But I had campaigned on process. Part of what I had campaigned on was changing how Washington works, opening up transparency and I think it is -- I think the health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don't know what's going on. And it's an ugly process and it looks like there are a bunch of back room deals."

ABC News' Z. Byron Wolf contributed to this report.

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