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Obama Shows Support for Insurance Mandate

Janice Simmons, for HealthLeaders Media, June 4, 2009

In a letter to Senate Democratic leaders, President Obama on Wednesday outlined what his vision for healthcare reform should look like—including addressing the idea of "moving towards a principle of shared responsibility—making every American responsible for having health insurance coverage and asking that employers share in the cost."

"I share the goal of ending lapses and gaps in coverage that make us less healthy and drive up everyone's costs, and I am open to your ideas on shared responsibility," he said in a letter to Senators Edward Kennedy (D-Mass.) and Max Baucus (D-Mass.) who chair the two Senate panels overseeing healthcare reform. However, he requested that they provide a hardship waiver "to exempt Americans who cannot afford it"—especially small businesses.

Obama, writing the letter one day after meeting with two dozen Democratic senators in the White House, told the leaders that the "plans you are discussing embody my core belief that Americans should have better choices for health insurance—building on the principle that if they like the coverage they have now, they can keep it, while seeing their costs lowered as our reforms take hold."

For those who don't have such options, "I agree that we should create a health insurance exchange—a market where Americans can one stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can."

While covering the uninsured could cost upwards of $1.5 trillion over the next decade, Obama did not propose how that entire cost would be covered. However, he did suggest that "fulfill this promise," he would set aside $635 billion in a health reserve fund as a down payment on reform.

This reserve fund, he said, would include several proposals to cut spending by $309 billion over 10 years, which would include: reducing overpayments to Medicare Advantage private insurers; cutting Medicare and Medicaid waste, fraud and abuse; improving care for Medicare patients after hospitalizations; and encouraging physicians to form "accountable care organizations" to improve the quality of care for Medicare patients.

He also said he was "committed to working with the Congress to fully offset the cost of health care reform by reducing Medicare and Medicaid spending by another $200 to $300 billion over the next 10 years, and by enacting appropriate proposals to generate additional revenues."

Obama said these savings will come not only by adopting new technologies but going after the key drivers of skyrocketing health care costs, including unmanaged chronic diseases, duplicated tests, and unnecessary hospital readmissions. These steps, he said, could close loopholes, would raise $326 billion over 10 years.


Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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