Republicans on Capitol Hill are saying a bipartisan agreement over health reform will be tougher with the release Wednesday of a letter sent from President Obama to Senate Democratic leaders that 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."
Obama for the first time also said that Americans should have the choice of a public health insurance option operating alongside private plans.
Senate Minority Leader Mitch McConnell (R-KY), in remarks from the Senate floor Thursday, contrasted Obama's comments on the public plan option with recent government involvement with the major American car manufacturers. "This is how the government subsidizes failure and undercuts private companies. And this is how a government plan could undercut private health plans," he said.
Sen. Mike Enzi (R-WY), ranking member of the Senate Health, Education, Labor and Pensions Committee, predicted the letter will hurt chances later for a bipartisan agreement.
Members of the conservative "Blue Dog" Coalition said they supported a healthcare bill that would not "disrupt families' attempts to keep their own insurance." However, they said they had concerns with the "Medicare-like" public option. "Medicare pays too much for medical procedures in some places and too little in others," said Rep. Earl Pomeroy (D-ND), a member of the coalition.
In his letter, Obama said, "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." The letter was sent to Senators Edward Kennedy (D-MA) and Max Baucus (D-MT) 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 to "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 offset the cost of healthcare 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 by adopting new technologies plus going after the "key drivers of skyrocketing healthcare 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.
Baucus, who is aiming to have the Senate Finance Committee mark-up reform legislation by mid-month, said in a statement that he and the president "are in lockstep in our view that we must act quickly to drive down the growth of healthcare costs."