Skip to content

New York Times- Health Compromise Floated Before Obama Speech

New York Times- Health Compromise Floated Before Obama Speech

The proposal from the lawmaker, Senator Max Baucus, who heads the Finance Committee, would impose new fees on some sectors of the health care industry, but none on individuals, to help offset initial costs estimated at $880 billion over 10 years, according to officials familiar with the outline.

The plan, circulating among some committee members of both parties, would also offer the option of lower-cost insurance, with protection only against the costs of catastrophic illnesses, to those 25 and younger. In addition, it would provide basic Medicaid coverage to millions of low-income people who are currently ineligible for the program, but the benefits would be less comprehensive than standard Medicaid.

Mr. Baucus, Democrat of Montana, will try on Tuesday to win support from the three Republicans and two other Democrats on his committee with whom he has been deliberating for months. Ultimately, however, he will need a majority of the committee’s 23 members, several of whom are resentful at being excluded.

Mr. Obama plans to meet Tuesday at the White House with the top Democrats in Congress, Speaker Nancy Pelosi and Senator Harry Reid, to coordinate strategy.

Administration officials declined to discuss either Mr. Baucus’s plan or the president’s speech, which Mr. Obama will deliver Wednesday night to a joint session of Congress. But the officials welcomed the chairman’s draft as important progress just as lawmakers are returning this week from their summer recess.

Still, while the Finance Committee is expected to produce a moderate bill with the best chance of passage in the Senate, it is not clear whether the White House regards it as a template. Four other committees with jurisdiction — three in the House, one in the Senate — approved versions of health legislation before Congress recessed.

The presidential address was scheduled by the White House last week in part to pressure Mr. Baucus to act. Many Democrats say Mr. Obama has for too long deferred to him, sapping momentum from the president’s chief domestic priority.

Mr. Obama’s Labor Day meeting with his advisers followed his return from an A.F.L.-C.I.O. picnic in Cincinnati, where he gave a rousing campaign-style pitch for his health care initiative that previewed some themes for Wednesday night. The president told thousands of cheering unionized workers that Congress should stop debating, because “it’s time to act and get this done.”

“I’ve got a question for all those folks who say we’re going to pull the plug on Grandma,” the president thundered. “What’s your answer? What’s your solution? And you know what? They don’t have one. Their answer is to do nothing.”

As previously reported, Mr. Baucus is not calling for a government-run insurance plan, or “public option,” to compete against private insurers. Instead, his committee’s group of negotiators has coalesced around the idea of forming nonprofit, member-owned insurance cooperatives in the states.

Republicans oppose the public option, calling it an invitation to a health care system run entirely by the government, and some moderate-to-conservative Democrats are leery as well.

In his address, Mr. Obama is nonetheless expected again to describe a public option as his preferred way to “keep insurance companies honest,” as he often puts it, and encourage better coverage at a lower cost. At the same time, he will make clear that enactment of health care legislation should not hinge on whether it includes the public option, a message sure to anger liberals, including many in the House.

“I continue to believe that a public option within that basket of insurance choices would help improve quality and bring down costs,” Mr. Obama told his union audience Monday, provoking loud applause.

But remarks by the White House press secretary, Robert Gibbs, on the flight to Cincinnati reflected an effort by the White House to play down the importance of a public option to the larger overhaul. Mr. Gibbs said a public option would not affect most Americans — up to 180 million — because they already have insurance through employers.

The White House’s straddle reflects the Obama team’s recognition that the more liberal House will not pass a health care bill without a public insurance option, while the Senate will not pass one with it.

“The problem with this kind of important speech,” said Michael S. Berman, a longtime Democratic strategist who was an aide to Vice President Walter F. Mondale, is that “it is pretty darn hard to put together something that is satisfying to enough people.”

To help pay for his plan, Mr. Baucus would impose fees of $6 billion a year on insurance companies, $4 billion a year on manufacturers of medical devices and $750 million a year on clinical laboratories.

Mr. Baucus has apparently dropped the idea of requiring Medicare beneficiaries to pay 20 percent of the amounts charged for laboratory tests. That will allow him to say his plan does not directly increase costs to beneficiaries.

Alan B. Mertz, president of the American Clinical Laboratory Association, a trade group, said his members would fight the proposed fee on labs. Under current law, Mr. Mertz noted, laboratories face a 2 percent cut in their Medicare payments in January, and in 10 of the last 12 years they received no increase in their Medicare reimbursement rates.

Mr. Baucus’s proposal would offer low-cost catastrophic insurance as an option for people 25 and younger. Policy experts say many people in this age group cannot afford comprehensive coverage or see no need for it.

“The idea of a stripped-down benefits package for people who have a good income and choose not to buy health insurance makes a lot of sense,” said Stan Dorn, a senior research associate at the Urban Institute. “But a catastrophic insurance policy does not make sense for lower-income people, because they cannot afford medical care short of catastrophic expenses. A catastrophic policy does not cover routine care.”

Mr. Baucus’s plan would also expand Medicaid, starting in 2014, to cover millions of low-income people, including many childless adults who never qualified before. Benefits offered to such newly eligible adults would generally be less generous than the comprehensive benefits available to other Medicaid recipients.

For years, governors have wanted more discretion to tailor Medicaid benefits to the needs of different population groups. But Jocelyn A. Guyer, co-executive director of the Center for Children and Families at Georgetown University, expressed concern. “Low-income people without children tend to have extensive health care needs — higher rates of mental illness, physical disability and chronic conditions,” she said.

Mr. Baucus’s proposal would also require health insurance companies to report the proportion of premium dollars spent on things other than medical care. Hospitals would be required to list standard charges for all services.

The information could be useful to consumers. But insurance companies say the data on their expenses can be misleading because the costs of some activities that benefit patients, like “disease management” and the use of health information technology, may be classified as administrative rather than medical.