President Confirms $1 Trillion for Health-Care Reform

WASHINGTON, June 13, 2009 — -- President Obama says he's found a way to pay for health-care reform.

"Today, I am announcing an additional $313 billion in savings," he said in his weekly address, released Saturday. That's in addition to the $635 billion in other savings he has already identified, he said, making up the roughly $1 trillion it will take to overhaul the nation's health-care system.

"For example, if more Americans are insured, we can cut payments that help hospitals treat patients without health insurance," Mr. Obama said. "If the drug makers pay their fair share, we can cut government spending on prescription drugs."

Critics say that is easier said than done. Most of the savings the president outlined would come from lowering payments from Medicare and Medicaid, which would reduce the payments to hospitals and drug makers, which are unlikely to accept less without a struggle.

"There's definitely waste in these programs that needs to be cut," Michael Cannon of The Cato Institute, a libertarian think tank, told ABC. "But the reason why that waste stays there is because there are special interests who fight to protect it.

It is already evolving into a battle of titans in the health-care debate.

"Oh yes," Thomas Mann of the Brookings Institution, told ABC. "There will be a big fight because the stakes are so high, economically, ideologically, politically."

Nevertheless, the debate has come a long way since the insurance industry's "Harry and Louise ads in the 1990s, that helped draw public criticism against a government-run health-care plan and kill the Clinton administration's health-care reform effort," Mann said. "This time, doctors, insurers and patient advocacy groups have joined in an alliance of strange bedfellows. While they're battling out the details, advocacy groups on all sides tell us they expect the president to sign health reform into law this year, with or without their support.

"The odds favor some action of health-care reform," Mann said. "How ambitious? What [are] the specifics? We don't know."

The main battle is shaping up over the president's proposal to create a government-run health plan to compete with private plans, an option favored by consumer advocacy groups.

"A public health insurance option is a competitor in the marker that will lower costs and keep those insurance companies honest," Richard Kirsch, national campaign manager of Health Care for America Now!, told ABC.

The insurance industry calls the proposal for a public plan a nonstarter.

Karen Ignani, president/CEO of American Health Insurance Plans, told ABC, "If you look at the proposals that have been laid on the table thus far, it will bankrupt all of the major hospitals in the United States because it pays at public program rates, which are already significantly underfunding providers."