Obama releases new healthcare plan

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Image source: www.whitehouse.gov

In an effort to “bridge the gap” between the House and Senate healthcare proposals, President Barack Obama today offered a new healthcare plan in advance of a bipartisan healthcare summit scheduled for later this week.

The White House released an 11-page summary of changes to the existing Senate and House bills, saying that the proposal builds off the legislation passed by the Senate and “improves on it by bridging key differences between the House and the Senate as well as by incorporating Republican provisions that strengthen the proposal.”

The White House emphasized that one key change is the elimination of the special Medicaid deal that the Senate negotiated for Sen. Ben Nelson D-Neb. that would provide Nebraska with additional federal assistance to cover increased Medicaid costs his state would have incurred under the legislation. Instead, the proposal calls for the  provision of “significant” additional federal funding to the states for the expansion of Medicaid.

The President’s proposal also increases the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500, but delays its implementation until 2018. It also increases the amount in subsidies low-income families and individuals who do not have insurance can receive from the federal government to buy the insurance.

The new proposal would also close the Medicare prescription drug “Donut Hole” under which Medicare stops paying for prescriptions after the plan and beneficiary have spent $2,830 on prescription drugs, and only starts paying again after out-of-pocket spending hits $4,550. According to the White House, the President’s proposal fills this gap by increasing the amount of money for rebates to beneficiaries and by reducing co-insurance payments so it is the standard 25 percent by 2020.

The President’s plan does not include the public option found in the House version.

The White House said the plan:

  • Makes insurance more affordable by providing the largest middle class tax cut for health care in history, reducing premium costs for tens of millions of families and small business owners who are priced out of coverage today.  This helps over 31 million Americans afford health care who do not get it today – and makes coverage more affordable for many more;
  • Sets up a new competitive health insurance market giving tens of millions of Americans the exact same insurance choices that members of Congress will have;
  • Brings greater accountability to healthcare by laying out commonsense rules of the road to keep premiums down and prevent insurance industry abuses and denial of care;
  • Will end discrimination against Americans with pre-existing conditions; and
  • Puts our budget and economy on a more stable path by reducing the deficit by $100 billion over the next 10 years – and about $1 trillion over the second decade – by cutting government overspending and reining in waste, fraud and abuse.