Obama's Proposal Would Limit Rate Hikes

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep. Good morning.

President Obama is unveiling his own health overhaul plan today. It is one of several ways, this week, the president is trying to find some maneuvering room on health care.

NPR's health policy correspondent Julie Rovner is following this story. She's in our studios live.

Julie, good morning.

JULIE ROVNER: Good morning, Steve.

INSKEEP: Up until now, the president has said he wasnt going to put out his own plan. He was going to leave that to Congress. Why change now?

ROVNER: Well, I guess one big reason is that so far his strategy hasnt worked very well. There isn't a health plan yet on his desk for signing. But this particular plan is in anticipation of the bipartisan health summit that's scheduled for later this week on Thursday.

The president says that he'll put his ideas on the table if Republicans will come and put theirs on the table. It's all going to be televised on C-SPAN, and presumably the other cable news networks, and the hope is that perhaps it could inject some life back into this process and get it moving again.

INSKEEP: And we're told that just in the last moment or so the president's plan has gone up on the Internet. So we're in very early stages here, but you got a briefing from White House officials. What did they tell you?

ROVNER: Well, they told us that the president's plan is based on the Senate bill that passed on Christmas Eve with some modifications, many of which were already negotiated between House and Senate leaders; things like having a little bit smaller tax on those Cadillac health plans to these very generous health plans, a little bit bigger subsidies for people with middle incomes. Remember, people will now be required to get health insurance so they want to make sure that people with moderate incomes can afford it.

There will be a lot more help for states with the new Medicaid costs. Man more people will be eligible for Medicaid, and the governors are even as we speak meeting with the president and they're very concerned about how they're going to afford Medicaid. So states will get much more help with their Medicaid costs. And all those special deals that the Senate had to cut for individual states, like Nebraska and Louisiana, those are not in the president's plans.

INSKEEP: Julie, you mentioned smaller taxes, less pain, bigger subsidies, more goodies, but there was already concern about how much this bill was going to cost. Isn't this going to make it cost even more?

ROVNER: Yes, it probably will make it cost more. The White House was a little bit vague on that. We heard that it will cost about $200 billion, which would bring it to right under the trillion dollar mark over 10 years. The White House didnt say exactly, or at least in the briefing, how that would be paid for. There were some more crackdowns on fraud and abuse and some more fees and they said something about closing loopholes, but one of the pay fors that jumped out was another $10 billion fee on brand name prescription drugs. That would certainly undo one of those deals cut last year that weve heard so much about.

INSKEEP: A fee on brand name prescription drugs, meaning that someone like you or I would get? We'd pay some kind of tax? Is that what that is?

ROVNER: I dont think so. I think the idea is that the drug industry would pay more.

INSKEEP: Oh, but, of course, they're going to pass it on to you and me, I assume.

ROVNER: Well, that's probably true.

INSKEEP: Which raises another question here, because, of course, most people get health care paid for through insurance and there's a proposal here to have some kind of insurance rate regulation board.

ROVNER: That's right. And that's one of the brand new things in this bill that was not in either the House or the Senate bill, and this is to capitalize on a great source of PR for the administration over the past couple of weeks, a 39 percent rate hike that was imposed, and now put on hold, by California's Anthem Blue Cross, of course, one of the huge insurers out in California. And the idea of this board would be to exam and possibly reject rate hikes like those.

Although, why they would need such a board when there will be these new health insurance exchanges, that would presumably do the same things, is a question that I haven't really gotten an answer for. So it's not clear whether this board would be an addition to the new exchanges or part of the exchanges or just for show. So...

INSKEEP: Oh, because the exchanges were supposed to drive down prices through competition and that sort of thing.

ROVNER: And also presumably, to regulate insurance prices. That's one of the things the exchanges are supposed to do.

INSKEEP: We're talking with NPR's Julie Rovner on this morning when President Obama has put out his own health care plan. And, of course, Julie, this is the beginning of a week in which the president is planning to meet on television with Democrats and Republicans to discuss this. So what position is he in now?

ROVNER: Well, the Republicans are clearly not going to be happy with this proposal. Remember, they say that the only way they think there can be a real negotiation is to start from scratch, to abandon both the House and the Senate bill. This is clearly not an abandonment of that. The president is working from the Senate bill.

So they're going to come in, the Republicans, and they're going to say what they want. But, you know, anybody who's expecting an actual deal to emerge out of this Thursday meeting I think unlikely, but at least there will be some more airing of views and then we will move on from there.

INSKEEP: Julie, always a pleasure to talk with you.

ROVNER: My pleasure.

INSKEEP: That's NPR's health policy correspondent Julie Rovner speaking with us live on this morning when President Obama has put out his own health care plan. Transcript provided by NPR, Copyright National Public Radio.