In crafting a proposal it hopes will revive the stalled debate, the White House relied heavily on the $871 billion bill passed by the Senate in December despite calls from House Minority Leader John Boehner and other Republicans to "hit the reset button."
Like earlier bills, Obama's latest measure would require every American to have some form of health insurance and would provide subsidies to help low-income families afford it. Consumers who aren't insured through a large employer would be able to buy and compare policies through online marketplaces called "exchanges."
But the White House plan, which will be the focus of a bipartisan summit Thursday, also includes several changes Obama hopes will ease friction among Democrats that has slowed progress on the effort for weeks. Among the adjustments:
• "Cadillac" tax
A proposed 40% tax on high-priced or "Cadillac" health care plans would begin in 2018 instead of 2013, as originally proposed by the Senate. And the definition of a high-end policy would increase to $27,500 for a family, instead of $23,000.
The Senate's version of the tax, which was projected to raise $150 billion over 10 years, was opposed by labor unions. House Democrats, including Speaker Nancy Pelosi, had raised reservations about its impact. A typical family policy costs more than $13,000 in 2009, according to the Kaiser Family Foundation.
Andy Stern, president of the Service Employees International Union, indicated that there would be support from labor leaders for Obama's new proposal. "Working families deserve health insurance that covers more and costs less," he said.
• New taxes
For the first time, Medicare taxes would be charged on investment income — such as stock dividends and rent from investment properties — and not just wages. The new, 2.9% assessment would kick in only for individuals with incomes above $200,000 a year and couples earning more than $250,000.
"This would be a move away from the basic way we've financed Medicare to say, 'Let's make it more inclusive,' " said Roberton Williams with the non-partisan Tax Policy Center.
Obama's plan also would impose $10 billion more in fees on drugmakers, up from the $23 billion the industry had agreed to. In a statement, Pharmaceutical Research and Manufacturers of America said it is reviewing the proposal.
• Employer mandate
Companies with more than 50 employees that don't offer health insurance would pay $2,000 a year per employee — more than double the fine included in the Senate bill. That fine, as before, would take effect if any employees receive federal subsidies to help pay for premiums.
The White House proposal, which would phase in the higher penalty for companies that have between 50 and 80 employees, falls short of the more stringent House language that would have required large companies to offer health coverage to their workers. Randel Johnson, a vice president of the U.S. Chamber of Commerce, said the new requirement will still be onerous for companies.
"A lot of these small employers are just starting out and some of them can't afford to provide health insurance," Johnson said. "Some who can't still may not be able to pay this fine."
• Medicare cuts
The new proposal would make deeper cuts in the Medicare Advantage program, which lets seniors buy Medicare coverage from private insurance companies. The Senate bill proposed $118 billion in cuts to the program over 10 years.
About 10 million seniors — one-fifth of all Medicare patients — are enrolled in the program, which often provides services not covered under traditional Medicare, such as vision insurance. Obama has criticized the program because it costs taxpayers 14% more per patient than regular Medicare.
• Special deals
Agreements negotiated with senators to benefit their states are also out. Among those was a provision that would have required the federal government to pay 100% of the cost of new Medicaid patients in Nebraska.
The new proposal would require federal taxpayers to cover the full cost of new enrollees in all states between 2014 and 2017, 95% between 2018 and 2019 and 90% after that. Sen. Ben Nelson, D-Neb., who originally secured the benefit for his state, said extending it to others is "the right thing to do."
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