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A First Look at the President’s Health Summit Proposal: Liberal Proposal Number Three

Posted By Robert Moffit On February 22, 2010 @ 1:47 pm In Obamacare | Comments Disabled

President Barack Obama [1]

In the run-up to his proposed health care summit, President Barack Obama this morning unveiled an 11-page outline of his health care proposal [2]. Within the outline, there are 33 specific policy changes. Of course, there is no legislative text yet, so the full impact of what the President is proposing will not be known for some time.

The President’s revisions are based on the Senate bill, as amended by Senate majority Leader Harry Reid (D-NV), and passed last Christmas Eve. According to the February 22, 2010, edition of Congress Daily, on paper, at least, the President’s outline would increase the cost of the Senate bill from $871 billion to $950 billion over ten years. Of course, the real costs depend upon the years of implementation, counting both the revenues and the benefits together.

Bridging the Gap between House and Senate Liberals. The President describes his proposal as a set of policy changes that would “ bridge the gap” between the unpopular House and Senate health care bills. The President stresses that his proposal “… adds new provisions to crack down on waste, fraud and abuse.” He also says that his proposal “puts American families and small business owners in control, of their own health care.” This latter claim is, in point of fact, disingenuous. Americans would have less control over health care decisions today, what kind of plans and benefits they get, and Washington would exercise even more control over health care financing and delivery than it does today.

Same Policy Direction. Given that the President’s proposal builds off of the Senate bill, that means that a number of features of the Senate bill that many , if not most, of Americans find objectionable are going to be retained. For example, the President insists on an individual mandate for Americans to buy health insurance coverage that is approved by federal authorities. The President’s proposal adopts the Senate approach to imposing an individual mandate but lowers the tax assessments. He also insists on the imposition of an employer mandate, though he would soften it to some extent by providing $40 billion worth of tax credits to small businesses. Consistent with the Senate bill, he would exempt small firms with less than 50 employees from the employer mandate.

Even more important is what the outline does not spell out. Assuming that the proposals are to be meshed with the Senate bill as the preferred vehicle for enactment, that means that the key mechanisms for federal control are retained: federal control over the content of health benefits packages, including new benefit mandates that federal authorities may improve over time ; the federal mandates on the states to establish a federally-designed health insurance exchange for health insurance; the creation of new powers for the U.S. Office of Personnel management (OPM) to sponsor two health plans nationwide [3] to compete against private health plans (the Senate version of the “public plan”); and the Senate language ( the Reid-Nelson compromise) that provides for taxpayer funding of abortion.

Some Tweaks. The President’s proposal would cancel the “Cornhusker Kickback”-  the federal taxpayer funding for Nebraska’s Medicaid expansion – but increase more federal taxpayer funding for all of the states. He would close the congressionally-created Medicare drug “donut hole” that is a gap in insurance coverage for seniors enrolled in the Medicare drug entitlement; and increase the Cadillac-tax threshold for high cost health plans from plans valued at $23,000 per years to $27,500 per year, starting in 2018.

New Federal Powers. In his outline, the President would add to the federal powers embodied in the Senate bill. The most important one is a new Federal Health Insurance rate Authority, which would provide federal “assistance and oversight” to the states conducting reviews of “ unreasonable rate increases” and “unfair practices” of health insurance plans. This, of course, establishes for the first time a legislative basis for the imposition of price controls on health insurance. If government can control both health benefits and health care pricing, that’s the proverbial ball game. Private health care is private in name only.

Co-authored by Nina Owcharenko


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/02/22/a-first-look-at-the-president%e2%80%99s-health-summit-proposal-liberal-proposal-number-three/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/Obama_Rhetoric0904132.jpg

[2] 11-page outline of his health care proposal: http://www.whitehouse.gov/sites/default/files/summary-presidents-proposal.pdf

[3] sponsor two health plans nationwide: http://www.heritage.org/Research/HealthCare/hl1145.cfm

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