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Obama's Vision of Public Plan Takes Shape

Janice Simmons, for HealthLeaders Media, June 8, 2009

What a difference a week makes. At the beginning of last week, it was clear that three committees in the House and two in the Senate were busy putting together health reform legislation. What was less clear was what President Barack Obama wanted—particularly in the area of a public health insurance plan option and other reform areas. But by midweek, the health reform winds seemed to change.

The President Speaks. In a meeting with key Democratic senators at the White House, the president talked Tuesday, June 2 about healthcare reform, which was followed immediately by a two-page letter sent to Senators Max Baucus (D-MT) and Sen. Edward Kennedy (D-MA), the chairmen of the two key healthcare reform committees, to clarify support for various healthcare provisions, including a public plan and requiring all individuals (under a principle of "shared responsibility") to be covered by insurance. Obama's proposed deadline for completion of healthcare reform is October.

It was a message that he took to the people Saturday, June 6 with a five-minute weekly broadcast address in which he said he would "lower costs, improve quality and coverage, and also protect consumer choice"—by letting individuals keep their plans and physicians they had if they liked them.

Obama released some details of how reform proposals would be paid for the $2.5 trillion reform package, such as cutting spending over the next 10 years through strengthening Medicare and Medicaid payment accuracy, improving care after a patient was hospitalized, and eliminating fraud, abuse, and waste. He said his estimated savings were about $309 billion. Obama's comments reflect findings from his Council of Economic Advisors on how high health costs will impact the economy.

Bill Draft Makes an Appearance. On late Friday, June 5, a draft of a reform bill emerged from the Senate Health, Education Labor and Pensions Committee, chaired by Sen. Edward Kennedy (D-MA).

The draft language, still preliminary at this point, proposes that all individuals have insurance, businesses be required to provide insurance (or pay a fee to the government), state insurance marketplaces be created where people can compare and buy plans, and subsidies be provided for low income individuals to buy coverage.

Mark-up is expected by early next week by the committee, although it is not know if Committee Chairman Kennedy, who is recovering from a brain tumor, will be making an appearance. Sen. Christopher Dodd (D-CT), a friend of Kennedy's, has been involved in moving legislation forward in Kennedy's absence.

Mark-up also is expected next week for the reform legislation completed by the Senate Finance Committee. Despite some differences between the committees noted earlier in the week, both committees agreed that they will work together to develop a bill that goes to the Senate floor.

Although it probably won't be included in the Senate Finance Committee measure, Baucus met with individuals supporting single payer interests during the week.

Health Group Proposals. After meeting at the White House last month, members of the six healthcare organizations—including the American Hospital Association and America's Health Insurance Plans—submitted proposals on Monday, June 1 on how they would decrease the annual healthcare spending growth rate by 1.5%.

In their game plan "to bend the cost curve," the groups’ projected savings would come from the following areas: utilization of care ($150 to $180 billion), chronic care ($350 to $850 billion), and administrative simplification and the cost of doing business ($500 to $700 billion). However, individualized savings are not specifically included in the sections submitted by the groups.


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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