House Democrats unveil healthcare plan - but what will it cost?

Price will be a major factor in winning bipartisan support, and the public insurance option could be a sticking point too.

House Democrats on Friday unveiled their draft plan to ensure “quality affordable healthcare” for all Americans -- but without the politically critical price tag.

The plan relies on a new Health Insurance Exchange, including insurance reforms, consumer protections, and a public health insurance option. At the heart of the draft proposal are two key mandates:

• Individuals must obtain insurance coverage -- or pay a penalty based on 2 percent of adjusted gross income, with exceptions for hardship.

• Employers must provide health insurance for their workers -- or pay a fee based on 8 percent of their payroll, with exemptions for “certain small businesses.”

In a statement, President Obama dubbed the House healthcare reform proposal “a major step toward our goal of fixing what is broken about healthcare while building on what works.”

CREDITS FOR LOW-INCOME FAMILIES AND SMALL BUSINESSES

To broaden access to healthcare, the plan proposes credits for low- and moderate-income individuals and families on a sliding scale: Credits begin just above the proposed new Medicaid eligibility levels and gradually phase out at 400 percent of the federal poverty level ($43,000 for an individual or $88,000 for a family of four).

Small businesses that “want to provide health coverage to their workers but cannot afford it today” will be eligible for a new small business tax credit.

At the same time, the plan sets up consumer protections for all new policies. It caps annual out-of-pocket spending to prevent bankruptcies from medical expenses and bars discrimination based on an individual’s health status, including preexisting health conditions.

In what is likely to be one of the most expensive elements of the plan, it also proposes expanding Medicare and Medicaid benefits, while also ensuring their long-term solvency. Individuals and families with incomes below 133 percent of the federal poverty level will be eligible for expanded Medicaid benefits -- all to be fully federally funded. The House plan also fixes unpopular elements of the Medicare plan, increasing reimbursement rates for doctors and eliminating cost-sharing for preventive services.

BUDGET BEAN-COUNTERS HAVE YET TO WEIGH IN

But none of this plan has yet been scored by the Congressional Budget Office. A CBO estimate seen as prohibitively high was a showstopper for the Clinton health plan in 1994.

This week’s CBO scoring of a healthcare reform plan by the Senate Health, Education, Labor and Pensions Committee -- the first of two Senate plans in the works -- estimated that the plan would add $1 trillion to the federal deficit over the next 10 years, but only reduce the ranks of the nation’s 45 million uninsured by 15 million.

That score prompted the Senate Finance Committee to postpone the release and markup of its proposed health plan until July. The panel aims to ratchet down costs to a level that could win support in the Senate.

The Senate Finance Committee is “the last best hope for reality in this debate,” says Bruce Josten, the top lobbyist for the US Chamber of Commerce, which opposes a public health insurance option and employer mandates.

REPUBLICANS ARE CRITICAL

House Republicans, who said that they had not been included in the tri-committee discussions, slammed the proposal.

“This plan is nothing less than a government takeover of healthcare, and families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” said House Republican leader John Boehner, in a statement.

House Speaker Nancy Pelosi called the plan “a critical step forward in meeting our commitment to the American people for quality affordable healthcare.”

Hearings on the tri-committee proposal are expected to begin next week. “We seek further comment from the public and our colleagues,” said Rep. Henry Waxman (D) of California, who chairs the House Energy and Commerce Committee.

Leaders of the House Education and Labor Committee and Ways and Means Committee also worked on the health reform draft.