Dear Single Payer Supporters - At 10 AM today, the White House released the outlines of Presiden't Obama's health reform proposal "incorporating and improving on ideas from the House and the Senate, along with some new ones," in anticipation of a summit this Thursday with Congressional Republicans.

Many supporters of comprehensive health reform had hoped that the President and the Democratic leadership would turn to the "reconciliation process" - a way of passing certain types of provisions through the budget that does not allow filibusters on the Senate - to pass a more robust health reform bill than the sad beast that had emerged in the Senate even prior to the election of Senator Scott Brown in January. The Senate bill offered virtually no cost relief for households, taxpayers, and businesses facing spiraling health costs, and attempted to pay for subsidized care for low-income people through a tax on workers' benefits. Polls following the January 25 election show clearly that Massachusetts voters strongly oppose this approach to health reform, particularly in a state facing the highest premiums in the nation, but that - perhaps not intuitively - they felt that Congress was not going far enough on health reform, not that they were going too far.

The President's proposal, which you can read more about at whitehouse.gov, unfortunately does not address these concerns, and by and large adopts the Senate bill's approach to health reform. Here are the details as far as we can tell at this early date:

* The President's proposal drops the public option, making no mention it.
* The proposal adopts the Senate's approach to financing, relying on an 'excise tax' on workers benefits instead of taxing high-income taxpayers, as the House bill did. It delays implementation of the excise tax until 2018 and lifts the premium threshold slightly, but like the Senate bill it links the tax to general inflation - not medical inflation - virtually guaranteeing that a larger and larger percentage of workers' benefits will face steep taxes, and will likely have their co-pays and deductibles hiked to avoid the tax threshold.
* The proposal follows the Senate in not imposing an employer pay-or-play tax, which would require businesses to cover their employees or face a fine.
* The proposal is closer to the Senate in imposing a fine on individuals who do not purchase health insurance of $695 per year OR a percentage of their income, whichever is higher.
* The proposal does follow the House in closing the Medicare 'donut hole' for seniors, but not fully until 2020, when the hole would be covered at 25% coinsurance.
* The proposal sticks with both House and Senate proposals to outlaw 'recissions' (insurance companies retroactively canceling coverage of sick patients), extending dependent coverage, and starting in 2014 disallowing exclusion based on pre-existing conditions, as well as lifetime or annual caps on benefits.
* The proposal includes a concept new to national health reform of establishing a 'Health Insurance Rate Authority,' which would provide oversight of insurance plans' proposed premium increases, and potentially have the power to block premium hikes if they were considered unfair. This is clearly an attempt to replace the public option with something else that promises to control costs. There are states that currently and in the past have implemented what's called 'prior approval' for premium increases in the individual and small group markets (people or small businesses buying insurance on their own) - there is very little evidence about whether this is effective. It has the potential to prevent price gouging by insurers if it's implemented aggressively, which would be a good thing, but not much promise of controlling the underlying drivers of health care costs, which is that we waste too much money on overhead, overuse certain goods and procedures, and that the cost of individual procedures is much higher than it should be.
* There is no mention in the initial documentation put out by the White House of where the President's plan stands on some key "wedge issues" such as women's access to reproductive health services, or how immigrants - both documented and undocumented - would be affected.

All in all, we are disappointed that the fundamental problems with the Senate reform bill - that there is little promise of effective cost control, and it pays for reform on the backs of working people - are being replicated in the President's proposal. This seems likely to lead to further voter backlash and alienation from workers and workers' organizations.

Mass-Care will continue fighting for fundamental reform that addresses the root causes of the health care crisis we all face, and we are looking forward in particular to advancing the Campaign for Health Care Justice in the coming year. We will keep you informed as we learn more about national health reform efforts.

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Mass-Care: The Massachusetts Campaign for Single Payer Health Care
33 Harrison Ave - 5th floor
Boston, MA 02111
Ph: 617-723-7001
Fx: 617-723-7002
Em: info@masscare.org

The greatest significance of President Obama's health care reform proposal released today is that he has now formally placed his stamp of approval on the fundamental policies already contained in the House and Senate reform bills. While remaining silent on some of the third rail issues (public option, Medicare buy-in, pregnancy termination, etc.), he and his staff merely tweaked the bills and added insurance premium rate review, whatever that's worth, and some rhetoric on waste, fraud and abuse.

His proposal still falls far short on two of the most important goals of reform: 1) insuring everyone, and 2) ensuring that health care is affordable for each of us. Merely tweaking the Senate version, which is what they did, could not have attained these goals since the most effective policies were already traded away before serious negotiations began.

That said, let's look at what the President expects a family of four with an income of $66,000 to pay for health care. The premium contribution would be 9.5% of income, or $6270 for the basic plan with an actuarial value of 70%. If they wanted or needed a better plan, they would have to pay the full difference in the premium. At an actuarial value of 70%, they would also have to pay an average of 30% of all health care costs. This can vary considerably because of plan design in the form of deductibles, copayments, coinsurance, non-covered benefits, stop loss, out-of-network care exempt from stop loss, and other factors. If they either elected not to or were unable to pay the premium, they would have to pay a penalty of $1650, but then, of course, they would have no protection at all against potential health care costs.

Clearly, President Obama has not done any better than Congress in protecting families from financial hardship should they have the misfortune of developing significant medical problems. Unaffordable underinsurance is not the change that we needed. - Don McCanne, MD, Physicians for a National Health Program