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Obama’s $950 Billion Health Plan Uses Senate Bill as ‘Starting Point’

Updated: 10:40 a.m.

President Barack Obama on Monday unveiled a roughly $950 billion health care reform plan reflective of a Senate-passed bill that lacks a public insurance option and includes the “Cadillac” tax on high-cost health insurance plans opposed by many House Democrats.

The proposal requires most Americans to have health insurance coverage and provides federal subsidies to help pay for premiums. The administration is touting the plan as the largest middle-class tax cut for health care in history; an estimated 31 million more people will be able to afford health care under the plan. The unveiling comes just a few days before Obama’s Thursday bipartisan health care summit.

Senior administration officials said their proposal uses the Senate bill as “a starting point” but noted that it costs $75 billion more than the Senate plan, due largely to its inclusion of affordability tax credits and increased state Medicaid payments. But they emphasized that the proposal is fully offset.

The plan includes some features palatable to all parties: It bars insurance companies from denying coverage based on pre-existing conditions, and it reduces the deficit by $100 billion over the next 10 years by reining in waste, fraud and abuse.

Obama also throws a bone to House Democrats by stripping special Medicaid deals for certain states out of the Senate bill, while moving to close the Medicare prescription “doughnut hole” coverage gap. Several House Democrats vowed to vote against the Senate proposal because of its special deals for Nebraska, Florida, Louisiana and other states.

In a further show of his commitment to curbing abuse in the health care industry, Obama is also proposing the creation of a new Health Insurance Rate Authority that would have the ability to deny or scale back substantial insurance premium hikes — a new idea likely to draw GOP criticism for overreaching into the private sector.

The White House plans to use its proposal as the starting point for discussions at Thursday’s bipartisan health care meeting, which is still drawing skepticism from Republicans.

“This is our take on how to bridge those differences” between the House and Senate proposals, White House Communications Director Dan Pfeiffer said in a conference call. “This is the White House’s take on it. We view this as the opening bid for the health meeting.”

Pfeiffer said Obama will be coming to the meeting with “an open mind to additional ideas” and he hopes Republicans will do the same by posting their own proposal online in advance of the meeting.

“We’re more than happy to post it on our Web site,” he said.

But Pfeiffer reiterated that the White House is still open to using reconciliation to pass a bill in the Senate on a simple majority — a stance that Republicans have said shows that Democrats are not ultimately committed to working in a bipartisan manner.

“The president expects and believes the American people deserve an up or down vote on health care reform,” he said. Reconciliation is still an option “if the opposition decides to take the extraordinary step of filibustering.”

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