What's New in Obama Plan? Not So Much

WASHINGTON (Feb. 22) -- After a year of coaching from the corner as House and Senate Democrats duked it out over legislation to overhaul health care, President Barack Obama stepped into the ring today with his own ideas.

Or so he said. The 11-page summary of "The President's Proposal" looks suspiciously similar to the legislation passed on Christmas Eve by the Senate. There were some changes sought by House Democrats in negotiations with their Senate counterparts. The document prominently highlighted Republican ideas, mostly crowd-pleasers such as combating waste, fraud and abuse in the health care system. And there were many adjustments deep inside the financial weeds on items such as tax credits, cost sharing and penalties for going without health insurance.

"Not much new," said Len Nichols, a health economist at the centrist New America Foundation and a veteran of the Clinton administration's try at health care reform. "This is a signal the president is willing to fight for what the Senate and House have produced, and to contrast it with the Republican alternatives, whatever they are. This a teachable moment. I hope the country is ready to learn what is really in these bills."

The Congressional Budget Office hopes to learn more about the plan, which the White House said would cost $950 billion over the next decade. CBO Director Douglas Elmendorf wrote on his blog that his agency could not provide a cost estimate on the proposal without more details, and, even if he got them, his numbers crunchers wouldn't have enough time to complete their analysis before Thursday's televised, bipartisan summit on health care reform.

White House communications director Dan Pfeiffer called the proposal "the opening bid" for the much-awaited meeting with Republicans. "We took our best shot at bridging the differences" between the bills, he told reporters in an early-morning conference call.

Later, White House spokesman Robert Gibbs challenged Republicans to "post their ideas either on their Web site, or we'd be happy to post them on ours, so that the American people could come to one location and find out the parameters of what will largely be discussed on Thursday."

That prompted Republican National Committee Chairman Michael Steele to send an e-mail noting that his party's proposal has been online for months.

While the political posturing continued unabated -- House Republican Leader John Boehner waited a little more than an hour after Obama's proposal went online to reiterate his call to "start over" with a clean slate -- policy experts pored over the fine print.

"It isn't a wimpy proposal," said John Holahan, health policy director at the Urban Institute, a nonpartisan think tank. "It seems to have put together a package that would be reasonably close to what the House wanted as fixes to the Senate bill."

Stuart Butler, head of domestic policy at the conservative Heritage Foundation, said the proposal is short on details but appears built largely on the Senate's architecture. "They're just tweaking the numbers," he said.

The goal of keeping the major elements of the Senate bill, both experts agreed, is to allow it to pass through the reconciliation process, which allows budget-related legislation to pass the Senate with a simple majority instead of a filibuster-proof 60 votes. Democrats lost that when Massachusetts elected Republican Scott Brown to fill the seat of the late Sen. Edward Kennedy. The "41st senator's" vote severely complicated the administration's plans to pass a health care bill.

"Reconciliation is the only shot they have of getting this done," Holahan said.

Not that Democratic majorities on both sides of Capitol Hill ensure passage. Some senators, including Democrat Robert Byrd of West Virginia, reject using reconciliation to push through legislation. Over in the House, conservative Democrats who supported a ban on most abortion coverage may balk at signing on to Senate language preserved in the president's proposal. It would allow women who purchase plans through federally subsidized health care exchanges to pay separately for abortion coverage.

"It is clearly not designed to accommodate the Republican point of view," said Brandeis University health economist Stuart Altman of the president's first -- and likely last -- direct foray into the sausage-making process known as health care reform. "It is an attempt to bring the Democrats together. It is not an attempt at a bipartisan approach."

The administration, of course, disagrees. Its blueprint includes footnotes highlighting which ideas came from Republicans. Missing among them is any mention of medical malpractice reform, a perennial favorite of Republicans. Gibbs predicted it would be one of the very first issues to be raised during Thursday's six-hour-long summit. "The president is anxious to discuss it," he said.

Among the major items in the proposal and on Thursday's agenda:

Fairness to states. The so-called "Cornhusker Kickback" to give extra money for Medicaid to Nebraska to win Democratic Sen. Ben Nelson's support for a bill last December was killed in favor of providing more federal aid to all states.

Obama's proposal also would reward states that have been more generous in helping cover the uninsured through Medicaid. About a dozen states -- mostly Democratic bastions of blue like New York, Massachusetts and Minnesota -- will see their federal matching funds for low-income residents grow by 8 percentage points. Under previous congressional proposals, states that have been most stingy on Medicaid and whose lawmakers were least likely to support the president stood to gain more than states that had covered the poor without prodding.

Controlling costs. The headline here is a new federal Health Insurance Rate Authority with power to regulate "unreasonable and unjustified" premium rate hikes by insurance companies. The administration set the stage for the new entity in recent days as it lit into Anthem Blue Cross, California's largest for-profit health insurer, for planning rate increases of up to 39 percent for some customers.

The Heritage Foundation's Butler said the move to create a new "czar" smacked of "nationalization" of insurance regulation, a job traditionally left to the states. "If they use their power to cram down insurance rates" that are based on the cost of medical services, he said, "we will see fewer doctors or they will be taking less time with you or hospitals will be discharging people more quickly."

An older idea to contain rising costs, an excise tax on high-cost "Cadillac" plans offered by employers, remains in the Obama plan, but the threshold for a family plan has been raised from $23,000 to $27,500. But no need to worry about that now: it wouldn't be implemented until 2018. The delay follows an agreement with labor unions, who, along with House Democrats, fought hard to kill the provision.

Butler said the timetable is telling. "When you say, 'I'm going to bring in a tax eight years from now that one house hates,' you know it's never going to happen."

Paying for reform. The proposal calls for raising money for health reform by extending Medicare taxes. For the first time, interest, dividends and other unearned income will be taxed for high-income households earning more than $250,000.

"That is a major change in the financing of Medicare. It swings open a door to a more general tax on all forms of income," said Joseph Antos, a health care analyst at the conservative American Enterprise Institute. He said Republicans would waste no time letting middle-class voters know "that they're next" if such a precedent is toppled.

Holahan, who favors a public option for health coverage, said conservatives who are attacking Obama's plan really should be pleased. He noted that ideas like health insurance exchanges, tax credits, the excise tax on expensive health plans and the continued reliance on employer-provided health care -- all key parts of the proposal -- aren't progressive ideas.

"This plan is so close to, has so many elements that conservative economists argued for," he said. "To say they haven't been listened to is absurd. The more you move toward them, the more they walk away. They don't want Democrats to have a victory on this."