Obamacare Unveiled!

| Mon Feb. 22, 2010 12:24 PM EST

President Obama unveiled his compromise healthcare plan today, and it's almost exactly what everyone expected. Here's the White House list of the "key changes" he's proposing to the Senate bill that passed last December, along with annotations:

  • Eliminating the Nebraska FMAP provision and providing significant additional Federal financing to all States for the expansion of Medicaid [i.e., the end of the "Cornhusker Kickback," essentially by making the same deal available to all states];
  • Closing the Medicare prescription drug “donut hole” coverage gap;
  • Strengthening the Senate bill’s provisions that make insurance affordable for individuals and families [i.e., higher subsidies for low-income families];
  • Strengthening the provisions to fight fraud, waste, and abuse in Medicare and Medicaid;
  • Increasing the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and starting it in 2018 for all plans [i.e., removing the special deal unions got on the excise tax and instead making their deal available to everyone];
  • Improving insurance protections for consumers and creating a new Health Insurance Rate Authority to provide Federal assistance and oversight to States in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans [i.e., allowing HHS to prevent gigantic premium increases like the 39% rise recently announced by Anthem in California].

These are modest changes, but they ought to be enough to bring everyone back to the table. Wonks get to keep the excise tax, but it's scaled back considerably to keep unions happy. However, in order to keep it from being a "sweetheart deal," the change applies to all high-cost health plans, not just those for unions. Increased subsidies and increased federal Medicaid financing also ought to make everyone happy.

This will cost money, of course, but the White House insists that its plan will cut the deficit by $100 billion over ten years, just like the current Senate bill. How? It cuts payments to Medicare Advantage a bit more than the Senate bill, it expands the Medicare payroll tax on high-income individuals to cover investment income as well as wage income, and increases assessments on the pharmaceutical industry a bit.

(Plus, in a fascinating little aside, it rasies a bit of money by eliminating the "black liquor" tax credit loophole. See here for details on this ingenious little tax system ripoff.)

Anyway, no big surprises here. There's no public option, and Obama's plan threads the needle between the House and Senate bills pretty carefully. He's obviously hoping for a low-drama compromise that both sides can agree to pretty quickly. Next stop: the Thursday "conversation" with Republicans on C-SPAN. Should be interesting stuff, especially if the Democratic caucus gets its act together and decides to support Obama's plan without too much squawking and infighting. Stay tuned.