Obama healthcare plan omits public option

The Obama healthcare plan, unveiled Monday, would rein in rate hikes, and includes an exchange where people can shop for coverage, but not a public option.

By , Staff writer

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    A sign in the window facing the street in the Service Employees International Union legislative room, where researchers monitor the debate around health care and jobs, in Washington on Thursday.
    The Obama healthcare plan, unveiled Monday, does not include a 'public option.'
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President Obama unveiled Monday his own plan for comprehensive health insurance reform, based largely on legislation the Senate passed in December. In a bow to Republicans, the plan includes new GOP-backed provisions designed to crack down on waste, fraud, and abuse.

Despite hints leading up to Monday’s unveiling that Mr. Obama’s plan would include a "public option" – a government-run insurance plan designed to compete with private insurers – it does not. But his plan does set up an insurance marketplace, or "exchange," in which consumers can shop for coverage. The plan would also create new federal authority to rein in rate hikes deemed exorbitant, a hot issue following double-digit increases announced earlier this month by Anthem Blue Cross of California.

Like both the House and Senate versions, the plan includes a mandate that individuals purchase insurance, and bans insurers from excluding consumers with preexisting conditions.

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The plan, posted on the White House web site, represents Obama’s opening bid in advance of a bipartisan healthcare summit on Thursday. In a conference call Monday morning, a senior administration official suggested Obama is prepared for Congress to use a legislative procedure called “reconciliation,” which requires only a majority of votes to gain passage – and not the 60 Senate votes needed to overcome a filibuster.

“The president believes the American people deserve an up or down vote on health care,” said Dan Pfeiffer, White House communications director. “This package is designed to provide us the flexibility to achieve that if the Republican Party decides to filibuster health reform.”

The White House plan would also:

• Eliminate the special provision in the Senate version that would have aided Nebraska on expanded Medicaid payments, and instead boost federal funding for expanded Medicaid in all states.
• Close the so-called “donut hole” in Medicare prescription drug coverage, which leaves seniors paying significant out of pocket expense.
• Increase the threshold for the excise tax on high-end insurance plans from $23,000 for a family plan to $27,500. The tax would begin in 2018 and apply to all healthcare plans.

The White House maintains its plan would reduce the budget deficit by $100 billion over the next 10 years, and about $1 trillion over the following decade. It also says its plan will help more than 31 million Americans afford health insurance who do not have it today, and make insurance more affordable to those who do have it. The plan includes a provision that allows low-income people who cannot afford health insurance to receive a waiver from the mandate.

On the sensitive issue of abortion, Obama’s plan keeps the Senate language, which is less restrictive than the House version. Obama has maintained from the start that the reform should not permit federal funding of abortions, though anti-abortion forces argue the Senate version would do that. The White House could lose crucial Democratic votes in the House if the Senate language stays.

Republicans were expected to react negatively to Obama’s overall proposal after calling on the administration to start from scratch. The Obama plan does not do that.

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