Inside This Issue - News
Health care reform debate gets serious
June 29th, 2009
WASHINGTON – President Barack Obama has pressed his case for health care reform even as a Senate plan turned out to be prohibitively expensive and unable to meet the goal of universal coverage.
Obama this month emphasized the cost of inaction, telling doctors at the annual conference of the American Medical Association, “If we do not fix our health care system, America may go the way of GM — paying more, getting less and going broke.”
The president rejected the “fear tactics” of critics who say he is attempting to socialize medicine. Calling them “naysayers” and peddlers of “Trojan horse” falsehoods, Obama said: “There are those who will try to scuttle this opportunity no matter what.”
He advocated public health insurance as an option along with private plans, saying it would “keep the insurance companies honest.”
The speech in Chicago was the president’s first public acknowledgement that health care reform, including covering the almost 50 million uninsured Americans, could cost $1 trillion or more over 10 years.
“That’s real money, even in Washington,” he said. “But remember: That’s less than we are projected to have spent on the war in Iraq. And also remember: Failing to reform our health care system in a way that genuinely reduces cost growth will cost us trillions of dollars more in lost economic growth and lower wages.”
A government analysis found, however, that even at $1.6 trillion, a Senate proposal would reduce the number of people without insurance by a net of only 16 million. The nonpartisan Congressional Budget Office found that 36 million people would still be uninsured in 2017.
That led the Senate Finance Committee to wrestle with the cost of the package. “It’s clear there have got to be changes made to make the whole package affordable,” said committee member Kent Conrad (D., N.D.), who is chairman of the Senate Budget Committee. And Finance Chairman Max Baucus (D., Mont.) said final legislation would cost less than $1 trillion.
Various congressional proposals are leaving Democrats a choice between a more liberal initiative that goes furthest toward their objectives, or compromising with Republicans on crucial issues.
Obama said the administration is “open-minded,” noting that Conrad’s proposal for nonprofit health cooperatives could be workable.
For his part, Sen. Mitch McConnell (R., Ky.) said: “The health care proposal being put together is not only extremely defective, it will cost a fortune.”
Democrats have said the cost of reform will be offset with tax increases and spending reductions. The finance committee is seeking to trim more than $500 billion from current government health spending over a decade. One idea is a tax break for drug companies that provide free medicine to the needy. Drug makers would also accept generic versions of biopharmaceuticals and other initiatives that would cut its Medicare and Medicaid reimbursements.
For his part, Baucus is pursuing a tax on employer health care benefits, an idea that other Democrats regard skeptically.
Sen. Chris Dodd (D., Conn.) who is leading the health care debate in the finance committee, favors the Obama administration’s call for a public health insurance plan to compete with private insurers.
In the House, plans being considered include a tax on the wealthy, or claiming funds that would be available after the expiration of the Bush administration’s tax cuts for the affluent. Another possibility is stopping companies from putting off or deferring taxes on foreign income. House Democrats are also pondering the idea of denying tax deductions for advertising of prescription drugs.
Four ex-senators floated a $1.2 billion bipartisan plan for universal coverage. Republicans Bob Dole and Howard Baker joined Democrats Tom Daschle and George Mitchell in issuing a proposal mandating that individuals carry health insurance, as well as tax increases on employers that don’t provide coverage.
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