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Obama team battles to portray healthcare reform as cost-cutting

House and Senate bills on healthcare reform include most cost-cutting ideas that have surfaced in recent years, asserts Obama's budget director.

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To pay for this expanded access to healthcare, the House would boost taxes on high-income Americans, while the Senate would tax high-end health-insurance plans.
The approach has plenty of critics, but also many supporters. A band of high-profile experts on the budget and healthcare signed a letter to Obama last week "to stress the potential benefits of health reform for our nation’s fiscal health, and the importance of those features of the bill that can help keep healthcare costs under control."

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Their arguments match many of the administration's views.

They endorsed the Senate Finance Committee's tax on Cadillac plans, arguing that it would not only raise revenue, but also "help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount." They backed the idea of a Medicare commission, to ensure that cost and payment reforms become an ongoing process. And they called for reforms of the way healthcare is purchased, such as the bundled-payments idea.

Many skeptics, while backing some of the same ideas, worry they won't be enough. Some cost controls are in the legislation but in watered-down form, they say. In the Wednesday briefing, Budget director Orszag fired back that the legislation is still evolving. He also said it will start a gradual process of learning what works, so that additional cost containment will follow in future years.

Critics on the left say a larger role for government could rein in costs – even while moving the nation toward universal medical coverage. Many on the right take an opposite view – that the Obama approach puts too much faith in government technocrats setting parameters, and not enough in private-sector competition.

"Increasing coverage does not mean larger government programs," Douglas Holtz-Eakin, an economist who advised presidential candidate John McCain, argued in a report earlier this year. "Instead, it should mean better and broader private health insurance for the U.S. population."

The pool of people who can't get coverage due to their medical conditions should be aided through targeted reforms, he argues.

Debate over healthcare is coming to a head at a time of soaring federal budget deficits. The House and Senate bills would cost the government more than $800 billion over 10 years, but would include tax hikes and other measures designed to make them "deficit neutral."

Both plans are designed to cover about 95 percent of the US population, up from the estimated 85 percent of Americans who have coverage today.

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See also:

Top four differences of Senate and House healthcare reform bills

Healthcare holdouts: Rep. Ben Nelson says abortion funds mean 'no' vote

Healthcare holdouts: Rep. Mary Landrieu likes her $300 million

Healthcare holdouts: Rep. Blanche Lincoln wants to focus on jobs

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