By Jane Norman, CQ HealthBeat Associate Editor

Feb. 26, 2010 -- Amid all the talk about a "government takeover" of health care, one proposal that would substantially expand the federal role in the system has remained at the periphery of the debate.

The plan would put the government in the business of providing long-term care insurance to people through their employers. While the idea hasn't drawn the same attention as issues like the public insurance option, it does inspire passion from its critics and supporters. One side calls it an unsustainable drag on the federal budget while the other says it's a badly needed helping hand to encourage seniors and people with disabilities to remain independent.

Republicans tried to strip the proposal from the health care overhaul when the bill was on the Senate floor. Now President Obama has given the idea a boost. He cited it in his Feb. 22 health care outline as a policy improvement that should be included and even strengthened. While White House officials didn't comment on exactly what they'd like, aides to the Senate Health, Education, Labor and Pensions Committee said their understanding is the administration backs the version in the Senate bill (HR 3590).

The proposal, which supporters call the Community Living Assistance Services and Supports (CLASS) Act, is helped by the fact that it was the vision of the late Sen. Edward M. Kennedy of Massachusetts, longtime HELP chairman. Kennedy proposed the measure last year even as his own health was failing, and it was picked up by the new chairman, Iowa Democrat Tom Harkin.

The idea stems from the premise that people often don't want to think about long-term care, or choose to believe they'll never need it. But with growing numbers of baby-boomers nearing retirement age, there's a very real prospect that many eventually will require help with the ordinary daily activities like eating or bathing. Or those who can no longer handle living in their homes may need to move to assisted living facilities or nursing homes.

Yet few prepare. There are now 6 to 7 million long-term care insurance policies held in the private market, but growth has slowed in recent years, and less than 10 percent of people 50 or older have policies, according to the Congressional Research Service.

The long-term care program would be offered by participating employers to workers automatically, though employees could choose to opt out. There would be no underwriting, which means no one could be excluded for a pre-existing condition. Participants would not be eligible for benefits until five years after enrolling, and the benefit would be at least $50 a day. A House version would allow non-working spouses of workers to also sign up.

Sparring Over Cost
The program has drawn support from some 275 advocacy groups. People like Mary Margaret Moore of Salem, Mass., executive director of the Independent Living Center of the North Shore and Cape Ann, Inc., are pushing hard. The program would ship cash directly to beneficiaries who might need to pay for help with dressing in preparation for work and remain self-supporting, she said.

Critics say the problem is in the structure and the cost of premiums. The Congressional Budget Office estimated that average monthly premiums under the Senate bill would be $123. That's calculated to be adequate to keep the program solvent for 75 years. However, actuaries for the Centers for Medicare and Medicaid Services estimate premiums at a much steeper $240 a month. They say the program faces "a significant risk of failure" because those most likely to enroll would be people with health problems or those who anticipate them. A task force made up of actuaries concluded that the premiums will be unaffordable for most Americans and not enough would participate, suggesting the program might eventually need to be bailed out. The intended benefit of $50 a day is too low and inevitably would have to be increased, they said.

Critics also question the financing of the program, saying that premiums collected up front would help finance the overhaul. The CLASS Act is estimated by CBO to save the government $72 billion from 2010 through 2019, largely because of the five-year delay in paying out any benefits, but after 2029 it would begin to increase deficits, according to CBO. Democrats respond that a Republican amendment accepted by the HELP committee would require that only premiums be used to sustain the program.

Scott Harrington, a professor of health-care management and insurance and risk management at the University of Pennsylvania's Wharton School, said the government should pursue other options such as creating more tax breaks for purchase of private long-term care insurance. Even in the private market, "this is a very difficult market to insure," he said.

Advocates of long-term care say that somehow, though, the problem needs to be addressed.

"I don't think the culture understands how difficult it is to keep on working and providing when we have a disability, and we do need some help," said Moore.

By John Reichard, CQ HealthBeat Editor

Feb. 23, 2010 -- For all their talk that something as big as a health care overhaul ought to be done in a bipartisan fashion, Senate moderates and centrists seemed remarkably open Tuesday to using the divisive budgetary maneuver known as reconciliation to get legislation on the desk of President Obama.

White House officials said Monday that President Obama is willing to use the tactic to move legislation through the Senate with 50 votes and the approval of Vice President Joseph Biden. Officials said that Obama believes the American public has a right to a straight "up or down" vote if Republicans take the "extraordinary" step of trying to filibuster a health care overhaul.

Sen. Evan Bayh, the Indiana Democrat who recently announced he won't run for re-election this fall because of the absence of bipartisanship in the Senate, indicated that reconciliation may have its place if Republicans are consistently obstructing legislation.

Bayh and other senators reacted to the maneuver in remarks to reporters going to and leaving a mid-day luncheon meeting of the Democratic caucus.

"Obviously, if the minority is just frustrating progress, that argues for taking steps to get the public's business done," Bayh said when asked whether he's more open to the use of reconciliation now that Obama has released his plan for resolving differences between House and Senate-passed legislation.

"At the same time, I do think that that would probably mean we're not going to get much done around here the rest of the year because the Republicans would probably just shut the place down. But you can make an argument that they're doing that anyway," Bayh said.

Bayh hedged, however. He said he hadn't looked at the Obama package of fixes in detail and that doing so would affect his views on using the tactic. "Well, these things are somewhat related," he said. "I want to see what's in it, then I can make an intelligent decision on that." Bayh did say of the Obama proposal: "I am glad they've taken out some of the special deals and I think that's a good thing."

Sen. Kent Conrad, who has said a number of times that reconciliation would be a very difficult way to move health care overhaul legislation, sounded more conciliatory Tuesday. The North Dakota Democrat previously has said that budgetary points of order would lead to the elimination of key provisions, producing "Swiss cheese" legislation. But moving a smaller package of House-approved fixes using the tactic is a different story, he suggested.

"Dealing with the whole health care bill in reconciliation? Very hard for me to see how that works," Conrad said. "What is possible is for the House to pass the Senate bill, then to deal with things around the edges that need to be fixed and improved through reconciliation. But that presumes that the House would pass what the Senate passed as the core bill and then to make (changes) through reconciliation. That is a very different circumstance than trying to deal with the whole bill through reconciliation, which as I've described would be very difficult to do."

The special deal that drew the most criticism in the bill (HR 3590) passed by the Senate Dec. 24 was a provision for full federal funding for Nebraska of the costs of expanding Medicaid.

Sen. Ben Nelson, the Nebraska Democrat who demanded that proposal and other provisions, said Obama's plan to drop the provision was "absolutely a welcome development." Nelson was the last Senate Democrat to commit to vote for the health care bill.

Nelson said that what he's wanted all along is more federal help for all states in picking up the costs of an expansion. Obama's revision would add a fourth year in which the federal government fully picks up the tab for all the states. In 2018 and 2019, the feds would pay 95 percent of costs and 90 percent thereafter.

Nelson delivered no overall verdict on the Obama plan, saying, "I've just seen the outline."

Asked whether he would oppose legislation moved using reconciliation, Nelson said, "I'm focused on what's in a health care bill more than I am on procedure. My preference has been to get 90 votes. To have something that's broadly bipartisan. But in this era of obstructionism, I'm much more interested what's in the legislation."

Sen. Joseph I. Lieberman, I-Conn., who caucuses with Democrats, wouldn't rule out support for a health care bill that involved use of reconciliation. "I don't prefer reconciliation," he said. "I've always wanted something as big as health care reform to be bipartisan and to be adopted under the regular order which would be the 60 votes. So I still haven't given up hope on that." But Lieberman said when asked if reconciliation would be a deal killer, "I haven't decided yet."

Republicans, meanwhile, said Obama's willingness to use the tactic shows the emptiness of his rhetoric about wanting to use the upcoming health care summit meeting Thursday to kick-start a new bipartisan approach.

"We will be at the meeting on Thursday and anxious to participate in the discussion, but it appears as if the administration has already made up their mind to go forward with a beefed-up Senate version and to try to jam it through under a seldom-used process that we commonly refer to around here as reconciliation," said Senate Minority Leader Mitch McConnell, R-Ky. McConnell spoke to reporters after a GOP caucus luncheon.

McConnell said polling shows the Democratic overhaul is highly unpopular. "So this strikes me as a rather really arrogant. . . effort to say to the American people we're smarter than you are," he said.

"We're happy to go down there," McConnell said concerning the summit. "I'm always pleased to see him. He's fun to be around, and I'm sure we'll have a great six hours. But it looks to me like he's already posted on the Internet what he would like to see the majority jam through," McConnell added.

By Adriel Bettelheim, CQ Staff

Feb. 25, 2010 -- Congressional Republicans on Thursday again urged President Obama to scrap his plans for overhauling the U.S. health care system and restart the debate on how best to control medical costs and expand coverage.

During opening remarks at a bipartisan White House health care summit, Sen. Lamar Alexander, R-Tenn., and Obama engaged in a terse exchange over whether Democrats' overhaul plans would actually reduce insurance premiums.

"Our view, with all respect, is that this is a car that can't be recalled or fixed and that we ought to start over," Alexander said.

Obama quickly challenged Alexander's contention that insurance premiums would rise under Democrats' plans, citing Congressional Budget Office projections that Obama said show the opposite.

"This is an example of where we've got to get our facts straight," Obama said.

Alexander replied that Obama was wrong.

"Rather than argue with you in public about it, I'd like to put my facts down, give them to you," Alexander said.

The group of 40 representatives and senators and administration officials broke for a lunch break shortly before 1 p.m., after nearly three hours of back-and-forth that largely repeated old talking points.

Obama and congressional Democrats like Senate Finance Chairman Max Baucus, D-Mont., stressed areas where the sides agree, such as the need for a new set of baseline insurance regulations. Republicans assailed the size and complexity of Democrats' plans, saying they gave the government too much opportunity to influence personal care decisions.

Obama's 2008 campaign opponent, Sen. John McCain, R-Ariz., criticized the president for failing to deliver on a campaign pledge to change the culture of Washington, prompting a terse reply from the president.

"We're not campaigning any more. The election is over,'' Obama said.

In his opening remarks, the president said attendees had to determine whether it still is possible to find consensus on a contentious issue.

"If we're listening to each other, if we're not engaging in sort of the tit for tat and trying to score political points during the next several hours . . . we might be able to make some progress. And if not, at least we will have better clarified for the American people what the debate is about," Obama said.

The White House structured the six-hour summit to focus on four issues: controlling costs, overhauling insurance regulations, reducing the deficit and expanding health coverage. Should participants prove unable to bridge their differences, Obama said, it would be necessary to "proceed from there."

The White House on Feb. 22 released an overhaul proposal it said would extend coverage to more than 31 million people, at a 10-year cost of $950 billion. The administration says the cost would be more than offset by spending reductions and tax increases, resulting in approximately $100 billion of deficit reduction.

Should the proposal fail to win enough votes, the administration is said to be considering a fallback plan that would extend coverage to about 15 million people through a more modest expansion of Medicaid and the Children's Health Insurance Program. That plan would cost about $240 billion over 10 years.

By Richard Rubin, CQ Staff

Feb. 22, 2010 -- President Obama's proposed methods of paying for a health care overhaul bridge the divide between the House and Senate versions of the bill and attempt to resolve some of the conflicts that have hung over the issue for months.

But it was unclear whether the plan Obama announced Monday had succeeded in designing a tax package that both House and Senate Democrats can support.

Obama would retain an excise tax on high-cost health insurance plans, a provision that House Democrats dislike, but he would delay it until 2018 and soften it. And, in a nod to those House Democrats, the president's version would lean more heavily on wealthy taxpayers by expanding the Medicare portion of the payroll tax to certain investment income.

The proposal would also make several changes to fees that would be imposed on various health care industries, and it includes a pair of revenue-raising provisions from outside the health care system.

Republicans, particularly in the House, seemed disinclined to debate the finer points of the policy changes, arguing that the entire White House framework is wrongheaded. Leading Democrats in both chambers also did not respond in detail to the specifics of Obama's revenue proposals, instead generally welcoming the ideas and looking forward to the administration's bipartisan meeting on health care policy scheduled for Feb. 25.

Excise Tax Changes
The excise tax has been controversial, particularly among liberals. Its inclusion in the Senate bill (HR 3590) has been one of the major sticking points in the long process of trying to develop a consensus bill that both the House and Senate can pass.

Union leaders who oppose the tax struck a deal with the White House earlier this year that would have delayed implementation of the tax for workers with collectively bargained plans and for state and local government employees. Obama's proposal would expand that delay to all workers, removing an argument that unions were getting a special deal and significantly reducing the estimated revenue from the tax.

As detailed in a White House summary, the new version of the 40 percent excise tax would affect plans for individuals costing more than $10,200 a year and plans for families above $27,000, up from $8,500 and $23,000, respectively. But the tax would start in 2018, not 2013 as in the Senate bill, so those are not particularly big increases. However, the new proposal also contains a potential adjustment to those thresholds if health care costs rise faster than expected in the interim period.

Like the previous versions, the thresholds would be indexed to the general inflation rate, plus 1 percent. Over time, because health care costs tend to rise more quickly than the rest of the economy, this provision would create pressure on more employers to reduce health insurance costs.

Companies that don't reduce premiums would have to pay the tax. Companies that do reduce premiums by increasing co-payments and deductibles would raise wages, some economists say, which would generate income and payroll taxes from workers. As a result, keeping the tax and pegging it to inflation help Democrats show that the legislation would reduce the federal deficit beyond the 10-year budget window.

To address concerns that high-cost plans have high premiums for reasons other than the generosity of their benefits, Obama's plan would adjust the thresholds based on the age and gender composition of each employer's workforce. It would also continue protections for workers in high-risk occupations. Unlike in the Senate bill, the thresholds would exclude the cost of dental and vision benefits.

Paul van de Water, a senior fellow at the liberal-leaning Center on Budget and Policy Priorities, said the general structure of the excise tax has not been altered. "The non-trivial caveat is that it loses a lot of revenue," he said. "But otherwise the basic features of the proposals are sound and unchanged, with the big improvement of the age and gender adjustments."

Rep. Joe Courtney, D-Conn., who has led the fight against the excise tax, said in an interview Monday that he appreciated the "tremendous progress" in shrinking the tax. But, he added, the whole issue should be set aside, given the uncertainty of imposing a tax that starts eight years in the future.

"Now we're left with a proposal that will not be going into effect until a year after the second Obama term in office, and four Congresses in between and a health care marketplace that nobody can predict where it's going to be," he said.

Making Up the Difference
Obama turned to several different pots of money to make up for the lower revenue that would result from his proposed changes.

Most notably, he wants to apply the Medicare portion of the payroll tax to investment income and passive income, like that produced from rental property, for individuals making more than $200,000 and married couples making more than $250,000. This income would be subject to the current 2.9 percent rate that employers and employees now pay together for Medicare. Some liberal groups and lawmakers have been calling for such a proposal.

Unlike the House-passed health care bill (HR 3962), which had a 5.4 percent surcharge on adjusted gross income for very wealthy taxpayers, Obama's proposal would not apply to active income earned from a business. That's an attempt to blunt criticism that the tax would unfairly burden small businesses.

However, the changes may still bring some criticism. Lawmakers such as Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, have argued that expanding the payroll tax beyond wages might undercut the central social-insurance model of Medicare.

In addition to the new tax, Obama retained the Senate's proposal to impose a new 0.9 percent payroll tax on wage income for individuals making more than $200,000 and married couples making more than $250,000.

Obama also would raise, from $23 billion to $33 billion, the total of new fees on pharmaceutical companies, but he would delay a provision that would make that fee and others not deductible from the companies' taxes.

The president did nod to concerns from Grassley and other Republicans by proposing to delay the implementation date of a fee on health insurance companies until 2014, to align with the expansion in coverage that would benefit the companies. Republicans had complained that the fees in the Senate bill would cause premiums to rise in the first few years, before subsidies for coverage and other provisions of the bill would take effect.

Despite the Senate's insistence that the money for health care legislation come from within the health care system, Obama is proposing to raise nearly $30 billion by tapping two generally noncontroversial non-health care sources. He wants to codify the judicial "economic substance" doctrine that prohibits companies from making financial decisions solely for tax purposes. He also wants to curb paper producers' ability to claim a tax credit for making "black liquor," a byproduct that can be burned for energy.

Grassley and Senate Finance Chairman Max Baucus, D-Mont., had proposed using both of those revenue-raisers in their version of job-creation legislation, but Senate Majority Leader Harry Reid, D-Nev., dropped them from the scaled-back version (HR 2847) that the Senate took up Monday.

Feb. 24, 2010 -- Democrats seemingly in shock from the recent loss of momentum for a major health care overhaul know a good thing when they see it — and at a House subcommittee hearing Wednesday, they pushed hard to build the case that the recent headline-grabbing rate hike of up to 39 percent planned by the insurer Anthem is just a taste of things to come for America's middle class.

Rejecting Anthem's defense that it's simply responding to a deteriorating risk pool and rising medical costs in raising its rates in the individual market in California, California Democrat Henry A. Waxman said that a review of some 3,000 internal company documents depicts an insurer intent on hitting profit targets and maintaining lavish perks and salaries rather than cutting middle-class Americans a break in a year that saw the biggest economic downturn in the United States in decades.

"The documents also tell a story of potential huge, new premium rate increases to come," said Waxman at the hearing by the House Energy and Commerce Oversight and Investigations Subcommittee. Waxman chairs the full Energy and Commerce Committee.

"We cannot go down this road forever," he said. "It is breaking our middle class. And it will bankrupt our nation." The witnesses at the hearing weren't hard luck cases but rather middle-class Californians subject to the 39 percent hike. Their testimony was meant to show that middle-class Americans without access to job-based coverage now face premium payments rivaling mortgage payments in size and trade-offs such as not being able to send their kids to college.

The panel's new top Republican member, Rep. Michael C. Burgess of Texas, sought to step on the story line Democrats are developing as President Obama prepares for Thursday's health care "summit" meeting with Republicans on health care.

Burgess derided the summit as no more than a " bipartisan photo-op," not a genuine effort to develop bipartisan legislation. But Burgess repeatedly expressed puzzlement as to why Anthem would pursue such a big increase at a pivotal time in the debate.

"You had to know this would be trouble," Burgess prodded Wellpoint executive Angela Braly, who oversees the Anthem subsidiary. Braly didn't deny it, but shrugged off the fallout as par for the course. "It's always a challenging issue to raise rates," she said. Braly also suggested that the increases are necessary to preserve insurance as a viable business model for the tens of millions of Americans enrolled in Wellpoint plans.

The tactics cited by Waxman and Subcommittee Chairman Bart Stupak, D-Mich., are arguably the standard stuff of corporate America — setting profit targets and negotiating by asking for more than you expect to get.

But Waxman painted a different picture. "WellPoint says that its rate increases are absolutely necessary," he said in his opening statement. "But its internal company documents describe a plan to build in 'a cushion' to 'allow for negotiations.' The company told its board of directors that its average 'rate ask' would be 25 percent, but that its final "'rate increase' would be only 20 percent.

"The documents we have reviewed show WellPoint is proposing its highest increases on its more generous plans," Waxman added. "At the same time, it is actively developing new products, called 'downgrade options,' that reduce benefits for its policyholders."

"This 'purging' process cuts coverage for WellPoint policyholders when they need it most: when they get sick," he said.

"And the WellPoint documents point to a future of even higher rate increases. WellPoint told committee staff that WellPoint voluntarily capped its maximum rate increases at 39 percent. If WellPoint had not done this, some policyholders could have faced rate increases of over 200 percent."

Stupak said that while the hearing focused on WellPoint's proposed premium increases in California, "this is a national problem. According to a disturbing report released today by the Center for American Progress, WellPoint has implemented or proposed double-digit rate increases in 11 of the 14 states in which they operate.

"But as residents of my home state know, the problem is not limited to WellPoint subscribers. Some Michigan policyholders are facing a proposed rate increase of 56 percent in the individual market."

Stupak complained that "hardworking Americans are asked to increase their premiums for the benefit of Wellpoint investors."

Braly said that while it's tempting in the current debate to scapegoat insurers, "doing so would be the triumph of sound bites over substance." Insurance industry profits account for less than a penny of every dollar Americans spend on health care, she said. "Isn't it time to ask what are we going to do about the other 99 cents?"

The rise in the underlying costs is the elephant in the room, she said. "We're the tail on the elephant, and we need to address the elephant," she said.

Stupak pressed Wellpoint on internal information saying it planned to raise its profit margins to 7 percent, but Wellpoint chief actuary Cynthia Miller said the company is losing money on many of its policies and that the hefty rate hike only applies to about 5 percent of Wellpoint's business. She indicated that raising profits 7 percent would only bring profit margins to less than 2 percent.

Braly said it's important to maintain profit margins to keep the insurance business going and that insurer margins are only about 4.8 percent, much less than those of drug companies and on a par with community hospitals.

"I don't mind you making a profit, but at the end of the year, 2009 a horrible year, you still made two point something billion dollars, and that's not enough?" Stupak asked.

"And we serve 34 million Americans across the country, and we feel it is appropriate for our business to be sustained so we can be there for those members," Braly said.

But insurers are going to play defense whether or not they can make the case that policy makers have to be realistic about business necessities. Republican Sen. Charles E. Grassley of Iowa joined with Democrat Max Baucus of Montana Wednesday in writing to Wellpoint and other insurers seeking answers on why they are increasing rates. On Tuesday, Grassley wrote to the insurer Wellmark asking that insurer to explain a 21 percent rate hike in Iowa.

In addition, HHS Secretary Kathleen Sebelius wrote Wednesday to the CEOs of Wellpoint, Aetna, UnitedHealth Group and Cigna inviting them to a March 3 meeting at HHS to discuss their premiums.

By Alex Wayne, CQ Staff

Feb. 22, 2010 -- President Obama for the first time proposed legislation Monday to overhaul the U.S. health system, posting a summary of the bill on the White House's Web site ahead of a Feb. 25 summit to discuss the effort with congressional leaders.

Obama's bill, which White House officials outlined in a conference call with reporters, blends aspects of legislation passed by the House (HR 3962) and Senate (HR 3590) last year. In effect, it represents the conference report that Democratic congressional leaders have been unable to pass since Sen. Scott P. Brown, R-Mass., was elected in January, giving Senate Republicans the 41st vote they needed to indefinitely filibuster the health bill.

Obama's communications director, Dan Pfeiffer, said that the president's bill was largely based on the Senate legislation, with changes aimed at satisfying some House Democrats' concerns about the Senate bill. These include modifying a proposed excise tax on high-cost health insurance plans and increasing subsidies to help lower-income families afford insurance.

"Since the Senate passed its version of health reform on Christmas Eve, the House and Senate have engaged in a process to try to bridge the differences between those two bills, Pfeiffer said. "What we're going to put online today is our take on how to bridge those differences."

The president's bill, Pfeiffer said, was "informed" by discussions with House and Senate Democratic leaders but was written by the White House.

Obama has not previously sent Congress his own health legislation, instead offering only outlines and guidance. Many rank-and-file Democrats have complained that the president did not sufficiently lead the development of the health overhaul, but Obama and his aides have been wary of upstaging powerful congressional leaders and committee chairmen who expected a strong hand in writing the legislation. The legislative effort broke down after Brown's election, which many Democrats interpreted as a referendum on their health overhaul.

Hoyer: 'A Framework'
Congressional Democratic leaders expressed support for Obama's bill on Monday, though they portrayed it as a White House product and did not explicitly say that a final bill would mirror the proposal.

"Now is the time to move forward, and that is why the president has convened an open, bipartisan meeting and laid out an administration proposal that will serve as a framework for that discussion," said House Majority Leader Steny H. Hoyer, D-Md. "In combining elements of the House and Senate-passed bills, the president has drawn a blueprint of ideas that have been thoroughly debated and publicly examined."

Some lower-ranking Democrats were more enthusiastic. Rep. Chaka Fattah, D-Pa., who has been urging his colleagues to finish a health overhaul by clearing the Senate bill for Obama's signature, endorsed Obama's bill and said he "look[s] forward to voting it into law." Rep. John D. Dingell, D-Mich., who is the primary sponsor of the House's health bill but had little role in writing it, said: "Moving this bill over the finish line will take the leadership only a president can provide."

But some Democrats are less supportive, largely because Obama's bill omits a top priority of liberals: a new government-run insurance plan, called the public option, that would compete with private insurers. Obama's bill also would create dozens of state-based insurance exchanges to sell regulated policies to individuals and small businesses, instead of a single, federally-administered exchange that liberals believe would be stronger. Rep. Anthony Weiner, D-N.Y., called those elements of Obama's plan "concessions to Republicans . . . in the hopes of winning their support."

"This will simply not happen," he said. "We need to stop bargaining against ourselves."

Republicans, indeed, dismissed Obama's proposal. They have said that Brown's election demonstrated deep public discontent with the Democratic health legislation and that it should be scrapped. House Minority Leader John A. Boehner, R-Ohio, has not publicly committed to attend Obama's summit, although other senior congressional Republicans have.

"The President has crippled the credibility of this week's summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected," Boehner said in a statement.

Regulating Private Insurers
At least one provision of the Obama bill departs significantly from both the Senate and House bills: Obama proposes to give federal regulators the power to block premium increases by private insurers. The measure amounts to a legislative response to large premium increases recently announced by insurers in several states, notably Anthem in California, which has proposed a 39 percent increase for people buying individual policies.

But the proposal risks drawing opposition from governors and state insurance commissioners, who may view the measure as a federal intrusion into territory historically controlled by states — the regulation of private insurance plans. America's Health Insurance Plans, the industry's trade association, said that Obama's proposal was misguided.

"Premiums are increasing because of soaring medical costs and a weak economy that is causing younger and healthier people to drop their health insurance," said AHIP spokesman Robert Zirkelbach. "Creating a new duplicative layer of federal premium regulation on top of what states are already doing will only add regulatory complexity and increase health care costs."

While insurers are required to justify their premium increases in every state, not all states empower their regulators to block increases, as Obama's bill would. Under the legislation, according to the summary, a new federal "Health Insurance Rate Authority" would "provide needed oversight" to state regulatory efforts.

An Eye on Reconciliation
Congressional Democratic leaders have discussed a two-bill process to overcome Senate Republican opposition and finish a health overhaul. Under the plan, the Senate would use the expedited budget reconciliation process to pass a set of changes to its bill. The House would then clear the reconciliation bill, followed by the Senate bill. The president would sign the Senate bill and then the reconciliation bill.

Pfeiffer said that Obama had not endorsed that specific proposal but "believes the American people deserve an up-or-down vote on health care reform."

The president's bill, Pfeiffer said, was therefore written with an eye toward reconciliation and is "designed to ensure we can get an up-or-down vote if the opposition decides to take the extraordinary step of filibustering health reform." But the actual bill text had not been posted to the White House's Web site by noon Monday; a White House spokesman said only that the administration was "working on it."

The Numbers
The director of the White House Office of Health Reform, Nancy Ann DeParle, said that Obama's bill would lead to insurance coverage for more than 31 million Americans who would otherwise lack it and would reduce the federal budget deficit by about $100 billion in its first 10 years and by about $1 trillion in its second decade.

The plan would cost about $950 billion over 10 years, she said —more than the Senate bill, less than the House bill and more than Obama's own target of $900 billion.

The changes to the Senate bill, she said, alone would cost about $75 billion. Obama would pay for the changes by changing the bill's underlying financing.

The Senate bill's 40 percent excise tax on high-cost insurance plans, scheduled to take effect in 2013, would not be implemented until 2018 under Obama's bill. Insurance plans would not be subject to the tax until they cost $27,500 a year for family coverage, up from $23,000 in the Senate bill. The changes reflect a deal the White House struck in January with labor unions, who oppose the excise tax because they fear it would impact many of their members.

To make up for the lost revenue, Obama would expand the dedicated 2.9 percent payroll tax that finances Medicare's hospital insurance trust fund to apply to unearned income, such as investment earnings, and raise the payroll tax to 3.8 percent on wages for wealthier families. This is a controversial proposal that has been avoided by congressional Democrats.

Obama would also increase a new fee charged to brand-name drug makers, included in the Senate bill, by $10 billion over 10 years. Drug makers have already agreed to provide $80 billion toward the cost of the health overhaul, and congressional Democrats say industry lobbyists have privately indicated they might agree to a bigger contribution, but it is not clear if the proposal will draw the industry's public opposition.

A spokesman for the Pharmaceutical Research and Manufacturers of America, the industry's main trade association, said the group had no immediate comment on Obama's proposal. Drug companies have spent tens of millions of dollars on advertising in support of Democrats' health overhaul.

Medicare, Medicaid
Obama's bill would gradually close the so-called "doughnut hole" in Medicare's prescription drug benefit. Medicare stops contributing to the cost of seniors' medicines after they have spent $2,830 a year, and does not resume cost-sharing until expenditures hit $4,550. AARP, the huge elderly interest group, has made closing the hole a top priority. Under Obama's proposal, Medicare would pay 75 percent of drug costs that fall within the hole by 2020.

Obama's bill would increase federal assistance for large Medicaid expansion proposed in both the Senate and House bills, and would eliminate a provision of the Senate bill that would grant Nebraska alone full federal financing for the expansion.

Instead, all states would have full federal financing for the first four years of the expansion, from 2014 until 2018, and then 95 percent federal financing for two more years. After that, DeParle said, the federal share for the expansion would amount to about 90 percent of the cost.

Obama's bill would also increase financial penalties on both employers who do not provide health insurance and individuals who refuse to obtain coverage. Obama once thought an individual mandate unnecessary to accomplish a health overhaul, but the insurance industry says it is required if it is to stop denying people coverage based on preexisting conditions, something Obama's bill would outlaw.]

Instead of a public option, Obama endorses a Senate proposal to offer insurance plans administers by the Office of Personnel Management (OPM) nationwide, to anyone buying coverage through new insurance exchanges. OPM already administers health insurance plans for federal employees and members of Congress and their staffs.