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Crunch Time for Health Care

By Dan Froomkin
2:30 PM ET, 06/ 8/2009

The future of health care will likely come into into much clearer focus in the next few weeks, which explains why President Obama is suddenly getting more involved. I wrote a week ago about how health care will be Obama's big test. Well, we're getting close to exam period.

Despite surprisingly broad agreement about the need to hold down costs and expand insurance coverage, there are still several key issues that remain far from settled.

Last week, Obama clarified his position on several of those key issues. He signaled his strong support for a "public option" that would compete with private insurance plans and urged senators to cap income-tax deductions for the rich. At same time, he indicated he might support some sort of insurance mandate for all Americans, and might be willing to tax employer-sponsored health insurance.

Now, in the next few days, he's expected to talk in greater detail about where he thinks the money to pay for expanded coverage would come from. Kim Chipman and Ryan Donmoyer write for Bloomberg:

Within the next 10 days, Obama will give details of plans that White House aides say would pay for the bulk of a new health-care system. This includes his recent call for an extra $200 billion to $300 billion in savings for the Medicare and Medicaid programs for the elderly and the poor, the officials said.

Sheryl Gay Stolberg writes in the New York Times:

After months of insisting he would leave the details to Congress, President Obama has concluded that he must exert greater control over the health care debate and is preparing an intense push for legislation that will include speeches, town-hall-style meetings and much deeper engagement with lawmakers, senior White House officials say.

But as Mr. Obama wades into the details of the legislative debate — a process that began last week when he released a letter staking out certain specific policy positions for the first time — he will face increasingly difficult choices and risks.

For instance, Stolberg writes:

If he embraces a tax on employee benefits, an idea he attacked when he was running for president, he may infuriate labor and the middle class. If he insists on a big-government plan in the image of Medicare, he could lose any hope of Republican support and ignite an insurance industry backlash. If he does not come up with credible ways to pay for his plan, which by some estimates could cost more than $1 trillion over 10 years, moderate Democrats could balk.

Obama is reprising an idea he first floated in his February budget proposal, but which even some congressional Democrats termed a nonstarter.

Obama senior adviser David Axelrod told CNN's John King yesterday that at a meeting with Senate Democrats last week, Obama

made a very strong case for the proposal that he put on the table, which is to cap deductions for high income Americans. And he urged them to go back and look at that. He said, I'm not -- you know, everybody ought to put their ideas on the table. I'm not foreclosing anything, but I really think my idea is the best.

The so-called "public option" is shaping up as the single biggest item of contention. Paul Krugman writes in his New York Times opinion column:

The big health care push is officially on....

But the devil is in the details. Health reform will fail unless we get serious cost control — and we won't get that kind of control unless we fundamentally change the way the insurance industry, in particular, behaves....

Without an effective public option, the Obama health care reform will be simply a national version of the health care reform in Massachusetts: a system that is a lot better than nothing but has done little to address the fundamental problem of a fragmented system, and as a result has done little to control rising health care costs.

Right now the health insurers are promising to deliver major cost savings. But history shows that such promises can't be trusted. As President Obama said in his letter, we need a serious, real public option to keep the insurance companies honest.

Robert Reich blogs for TPM Cafe:

This is it, folks. The concrete is being mixed and about to be poured. And after it's poured and hardens, universal health care will be with us for years to come in whatever form it now takes.

And as Reich sees it:

Big Pharma and Big Insurance are gaining ground in their campaign to kill the public option in the emerging health care bill....

They don't want a public option that would compete with private insurers and use its bargaining power to negotiate better rates with drug companies....

One of their proposals is to break up the public option into small pieces under multiple regional third-party administrators that would have little or no bargaining leverage. A second is to give the public option to the states where Big Pharma and Big Insurance can easily buy off legislators and officials, as they've been doing for years. A third is bind the public plan to the same rules private insurers have already wangled, thereby making it impossible for the public plan to put competitive pressure on the insurers.

And then there's the option being championed by moderate Republican Sen. Olympia Snowe, which would automatically "trigger" a public option if certain goals haven't been met. Reich is skeptical of that one, as well.

The Washington Post editorial board writes that Obama

ought to reconsider his aversion to changing the unfair and counterproductive arrangement by which employer-provided health insurance is not treated as income for tax purposes. Following a White House meeting, Mr. Baucus reported that the president was open to limiting the value of this tax-free benefit, and we hope that is what the president meant when he referred in the letter to "appropriate proposals to generate additional revenues."

E.J. Dionne Jr. writes in his Washington Post opinion column that

the toughest behind-the-scenes battles will be about how much the insurance companies, the drug companies and the providers are willing to give up to get a government bailout of the health system....

The hardest part of the health-care fight, says Ralph Neas, the CEO of the National Coalition on Health Care, may not be providing assistance for the uninsured... but getting all the players to agree to serious cost controls.

Obama pitched his plans -- in general terms -- in his weekly address on Saturday.

Matt Bai writes in the New York Times Magazine that the stakes are enormous. Unlike Obama's past legislative victories, designing a new health care system

is a legislative goal that has eluded every Democratic president since Harry Truman and that Obama repeatedly vowed to accomplish during last year's campaign; he has said that it is not only a moral imperative but also a crucial part of his plan to remake the American economy, an ever-expanding share of which is swallowed up by doctors' bills and hospital stays. Making good on his promise will require not just public expenditure on a disorienting scale but also the kind of activism and creativity, the birthing of new rules and institutions, at which Washington hasn't succeeded for generations....

Obama's success in passing an expensive and sprawling new health care program will depend, in some part, on whether he can persuade Democrats in Congress that he is not going to wilt under pressure from industry lobbyists or allow a bill to be undone by tensions in his own party. They also have to be persuaded that the cost savings Obama is projecting from a new health care system really are going to materialize in the near future — and that members aren't going to have to face furious voters a few years out, when deficits are reaching unsustainable levels and showing no signs of remission."

Bai's story, written before Obama began asserting himself last week, sings the praises of his hands-off-Congress approach. He writes:

If the president were to shed his reticence and set out his terms for a bill, Republicans would focus on their differences with Obama and would most likely end up abandoning the process, either because they wouldn't believe a compromise was possible or because they would want to seize on any excuse to derail his agenda.

And almost on cue, as Erika Werner writes for the Associated Press:

Republican Sen. Chuck Grassley says that President Barack Obama "got nerve" to go sightseeing in Paris while telling lawmakers it's time to deliver on a health care overhaul.

Grassley, the top Republican on the Finance Committee, is key to any bipartisan health care deal. Using Twitter — the Internet-based social connection service allows users to send mass text messages called "tweets" — the Iowa Republican issued two angry "tweets" Sunday morning as the president wrapped up an overseas tour....

Grassley's first tweet: "Pres Obama you got nerve while u sightseeing in Paris to tell us 'time to deliver' on health care. We still on skedul/even workinWKEND."

And Laura Litvan writes for Bloomberg:

A group of Senate Republicans sent a letter to President Barack Obama declaring their opposition to including a government-run plan in a health-care overhaul, saying it would be a 'federal government takeover' of the health system.

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