Health-care groups offer to help Obama
By RICARDO ALONSO-ZALDIVAR & PHILIP ELLIOTT Associated Press
Published: 5/11/2009 2:23 AM
Last Modified: 5/11/2009 3:56 AM
WASHINGTON — President Barack Obama's plan to provide medical insurance for all Americans took a big step toward becoming reality Sunday after leaders of the health care industry offered $2 trillion in spending reductions over 10 years to help pay for the program.
Hospitals, insurance companies, drug makers and doctors planned to tell Obama on Monday that they'll slow their rate increases in coming years in a move that government economists say would create breathing room to help provide health insurance to an estimated 50 million Americans who now have none.
With this move, Obama picks up key private-sector allies that fought former President Bill Clinton's effort to overhaul health care. Although the offer from the industry groups doesn't resolve thorny details of a new health care system, it does offer the prospect of freeing a large chunk of money to help pay for coverage. And it puts the private-sector groups in a good position to influence the bill Congress is writing.
Six major groups plan to deliver a letter to Obama and pledge to cut the growth rate for health care costs by 1.5 percentage points each year, senior administration officials said Sunday. They spoke on the condition of anonymity. Full details are to be revealed at a White House event Monday.
Obama has offered an outline for overhauling the health care system, and he wants Congress to work out the details and pass legislation this year. His plan would build on the current system in which employers, government and individuals share responsibility for paying the cost and care is delivered privately. The government would play a stronger role by subsidizing coverage for many more people and spelling out stronger consumer protections.
"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait," Obama said in prepared remarks that the White House released Sunday. "That is why these groups are voluntarily coming together to make an unprecedented commitment."
The industry groups are trying to get on the administration bandwagon for expanded coverage now in the hope that they can steer Congress away from legislation that would restrict their profitability in future years.
Insurers, for example, want to avert a government health plan that would directly compete with them to enroll middle-class workers and their families. Drug makers worry that in the future, new medications might have to pass a cost-benefit test before they can win approval. And hospitals and doctors are concerned that the government could dictate what they will be paid to care for any patient, not only the elderly and the poor.
Obama has courted industry and provider groups, inviting their representatives to the White House. There's a sense among some of the groups that now may be the best time to act before public opinion, fueled by anger over costs, turns against them.
It's unclear whether the proposed savings will prove decisive in pushing a health care overhaul through Congress. There's no detail on how the savings pledge would be enforced. And, critically, the promised savings in private health care costs would accrue to society as a whole, not just the federal government. That's a crucial distinction because specific federal savings are needed to help pay for the expanded coverage.
Costs have emerged as the most serious obstacle to Obama's plan. The estimated federal costs range from $1.2 trillion to $1.5 trillion over 10 years, and so far Obama has only spelled out how to get about half of that. Administration officials would not say Sunday how much they think Obama's plan will ultimately cost, but they indicated that they were confident it can be paid for.
Administration officials said they didn't expect all the savings strategies to be announced Monday, nor did they have access to specifics on how the groups reached their estimates and analysis.
The groups include the American Medical Association, the American Hospital Association, the Service Employees International Union, the California Hospital Association and the Greater New York Hospital Association, which represents medical care centers in four states.
Obama's plan envisions that people would be able to keep the coverage they now have. Employees of big companies probably would not see major changes.
But the self-employed and those who work in small businesses would be able to get coverage through a new kind of insurance purchasing pool. Called an "exchange," the pool would offer stable rates and predictable benefits. Plans in the exchange wouldn't be able to deny coverage to those who are sick and would have to follow other new consumer protection rules.
Lawmakers in Congress are generally following Obama's outline, but the Senate plan is likely to require all Americans to carry health insurance. Democrats hope to get a bill to the floor this summer.
By RICARDO ALONSO-ZALDIVAR & PHILIP ELLIOTT Associated Press
Published: 5/11/2009 2:23 AM
Last Modified: 5/11/2009 3:56 AM
WASHINGTON — President Barack Obama's plan to provide medical insurance for all Americans took a big step toward becoming reality Sunday after leaders of the health care industry offered $2 trillion in spending reductions over 10 years to help pay for the program.
Hospitals, insurance companies, drug makers and doctors planned to tell Obama on Monday that they'll slow their rate increases in coming years in a move that government economists say would create breathing room to help provide health insurance to an estimated 50 million Americans who now have none.
With this move, Obama picks up key private-sector allies that fought former President Bill Clinton's effort to overhaul health care. Although the offer from the industry groups doesn't resolve thorny details of a new health care system, it does offer the prospect of freeing a large chunk of money to help pay for coverage. And it puts the private-sector groups in a good position to influence the bill Congress is writing.
Six major groups plan to deliver a letter to Obama and pledge to cut the growth rate for health care costs by 1.5 percentage points each year, senior administration officials said Sunday. They spoke on the condition of anonymity. Full details are to be revealed at a White House event Monday.
Obama has offered an outline for overhauling the health care system, and he wants Congress to work out the details and pass legislation this year. His plan would build on the current system in which employers, government and individuals share responsibility for paying the cost and care is delivered privately. The government would play a stronger role by subsidizing coverage for many more people and spelling out stronger consumer protections.
"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait," Obama said in prepared remarks that the White House released Sunday. "That is why these groups are voluntarily coming together to make an unprecedented commitment."
The industry groups are trying to get on the administration bandwagon for expanded coverage now in the hope that they can steer Congress away from legislation that would restrict their profitability in future years.
Insurers, for example, want to avert a government health plan that would directly compete with them to enroll middle-class workers and their families. Drug makers worry that in the future, new medications might have to pass a cost-benefit test before they can win approval. And hospitals and doctors are concerned that the government could dictate what they will be paid to care for any patient, not only the elderly and the poor.
Obama has courted industry and provider groups, inviting their representatives to the White House. There's a sense among some of the groups that now may be the best time to act before public opinion, fueled by anger over costs, turns against them.
It's unclear whether the proposed savings will prove decisive in pushing a health care overhaul through Congress. There's no detail on how the savings pledge would be enforced. And, critically, the promised savings in private health care costs would accrue to society as a whole, not just the federal government. That's a crucial distinction because specific federal savings are needed to help pay for the expanded coverage.
Costs have emerged as the most serious obstacle to Obama's plan. The estimated federal costs range from $1.2 trillion to $1.5 trillion over 10 years, and so far Obama has only spelled out how to get about half of that. Administration officials would not say Sunday how much they think Obama's plan will ultimately cost, but they indicated that they were confident it can be paid for.
Administration officials said they didn't expect all the savings strategies to be announced Monday, nor did they have access to specifics on how the groups reached their estimates and analysis.
The groups include the American Medical Association, the American Hospital Association, the Service Employees International Union, the California Hospital Association and the Greater New York Hospital Association, which represents medical care centers in four states.
Obama's plan envisions that people would be able to keep the coverage they now have. Employees of big companies probably would not see major changes.
But the self-employed and those who work in small businesses would be able to get coverage through a new kind of insurance purchasing pool. Called an "exchange," the pool would offer stable rates and predictable benefits. Plans in the exchange wouldn't be able to deny coverage to those who are sick and would have to follow other new consumer protection rules.
Lawmakers in Congress are generally following Obama's outline, but the Senate plan is likely to require all Americans to carry health insurance. Democrats hope to get a bill to the floor this summer.
