The president has urged passage of health reform in 2009. The main reason is to remedy quickly harm inflicted on some many thousands of working families each month Congress delays. But the Republicans – and some “Blue Dogs” are bound and determined to stop any kind of reform, having made their deal with the devils of the insurance/medical industry giants.
So far two different bills have passed in major committees in both houses of Congress. But those bills have stalled in two other equally important committees. Of particular note, the Senate Finance Committee stands as the final major hurdle to producing a final bill that 58 or 59 Democrats and 1 or 2 Republicans can vote for.
Both bills contain a lot of the same important reforms: investments in health information technology, ending discrimination by insurers against policy holders who have preexisting conditions and making insurance coverage portable from place to place and job to job.
In addition, both bills expand choices of insurance plans by creating a market place of options, including a publicly-funded and run insurance plan.
While some details about the public option differ, it seems that people who earn between 133 percent to 400 percent of poverty (or individuals earning less than $43,000 or a family of four below $89,000) will be eligible for a sliding scale of discounts in the public insurance plan based on income. (People below that level would be eligible for an expanded Medicaid program.) Essentially, most people choosing the public insurance plan would pay similar premium rates and expenses that a typical retired Medicare recipient pays now. Both bills mandate that beneficiaries of the public option have the same choices of doctors and care they would have in a private plan.
Financing the public plan differs in each bill. According to White House Office of Management and Budget Director Peter Orszag estimates the cost of the program range from $75 billion to $100 billion each year. Hence the CBO's pessimistic estimate of $1 trillion over 10 years.
Orszag says that the president favors three key reforms that will pay for the program. First, end federal overpayments to the privatized Medicare Advantage programs created by the Republicans and the Bush administration in 2005. Those programs add no quality or accessibility to care, but cost taxpayers between $15 and $20 billion each year, or almost $180 billion over 10 years.
Second, fix Medicare and Medicaid repayment procedures to create parity and fairness across the country. Something like $100 billion over 10 years can be saved this way.
Third, limit tax deductions for the very richest one percent of Americans, a tax code reform that would restore the levels signed into law by Ronald Reagan in 1986. With the sunsetting of the Bush tax cuts for the richest Americans scheduled for then end of 2010, more than $300 billion over 10 years could be raised, Orszag explained in a recent teleconference with reporters.
Above all, the president has pledged to sign a health reform bill that does not add to the federal budget deficit.
Not only are these funding mechanisms important to making sure the public option is viable, they are important to remedying the very worst economic policies adopted by the Bush administration: the creation of bloated and expensive privatized programs and tax cuts for the rich paid for by the rest of us.