After Democrats failed to pass health care--though the House and Senate each approved separate bills--the Senate Democrats lost their filibuster proof advantage when a Republican won the senate seat held by the late Sen. Ted Kennedy (D-Mass.). President Obama was sent back to the drawing board for his signature domestic agenda issue. On Thursday, Obama will meet in advance of a meeting with GOP and Democratic congressional leaders. The Obama White House posted their proposals on Monday in advance of the meeting, a package built on the Senate bill, with targeted changes, reporters were told in a briefing call Monday morning. And note: The sweetner Sen. Bill Nelson won for Nebraska is out. The main link is here.
"We took our best shot," said Dan Pfeiffer, the White House communications director.
Click below for briefing......
Monday briefing on the Obama White House revamped health plan......
MS. DOUGLASS: Good morning, everybody. This is Linda Douglass in the White House Office of Health Reform.
We have with us today Dan Pfeiffer, who is the White House communications director; Nancy-Ann DeParle, who is the director of the White House Office of Health Reform; and for any of your background questions, for any of your questions at all on financing, Jason Furman, who is the deputy director of the NEC.
This call is on the record, and it is embargoed until 10 a.m. this morning.
You're going to hear first from Dan, and everybody's going to talk a bit, and then we'll open it up for some questions and answers.
So with that, I will turn it over to Dan.
MR. PFEIFFER: Thanks, everyone.
I want -- at 10 a.m. today, we're going to post online, on whitehouse.gov, the president's proposal that he's bringing to the table for the Thursday bipartisan health meeting. I just want to take a moment to give a sense of what it is and how we're viewing it.
This is a -- as we said before, the president would have signed both the House and the Senate bill had they come to his desk, because he thought they addressed the core goals that he laid out at the beginning of this process: additional stability and security for Americans with insurance; affordable options for those without; cutting costs for small businesses, families; and reducing the deficit. Both of those did all those things.
Since the Senate passed their version of health reform on Christmas Eve, the House and the Senate have engaged in a process to try to bridge the differences between those two bills. As I'm sure you remember, there was a couple of late nights in the Cabinet Room, where the president and the leadership were working through that.
What we're going to put online today is our take on how to bridge those differences. It's informed by the process that happened in the Cabinet Room and since then between the House and the Senate, but this is the White House's take on it.
We view this as the -- the opening bid for the health meeting. The president believes strongly that the meeting would be most productive were we to come to the table with one proposal that addressed these concerns, as opposed to a series of proposals in two different, competing bills.
So we took our best shot at bridging the differences. We think this may take some strong -- some strong steps to improving the final product. It is our hope the Republicans will come together around their plan and post that online prior to the meeting so that the American people have a chance to look at it, analyze it and be thoroughly informed heading into this meeting.
This is -- we're -- we -- the president's coming to the meeting with an open mind. He hopes the Republicans do too. Our hope is that we can find some areas of agreement. The Republicans bring good ideas to the table; we will find ways -- look for ways to incorporate those into our proposals. We hope that there will be additional ideas that come from both Republicans and Democrats throughout this conversation that can be incorporated.
As we -- and then we hope to have an honest, open, substantive discussion where both parties will get off -- get off our -- get off their talking points, find areas where we agree and have an honest, substantive debate about the areas where we disagree. And hopefully this will move the process forward and we can finally deal with this challenge that has bedeviled Washington for decades now.
I will now turn it over to Nancy-Ann DeParle, who will walk through some of the substantive details of what we have put online.
MS. DEPARLE: Thanks, Dan.
Before we get into the weeds on some of the specifics of the president's proposal, I just want to take a step back and talk about the big picture of what an extraordinary accomplishment the president's proposal would be for the American people in helping them with their health care, lowering health-care costs for businesses and government. It will make insurance more affordable by providing one of the largest tax cuts for health care in history, reducing premium costs for tens of millions of families and small businesses.
Many of them are priced out of coverage today. And it will help over 31 million Americans afford health care.
It sets up a new competitive health insurance market, the exchanges, giving tens of millions of Americans the exact same health insurance choices that members of Congress will have. It brings greater accountability to health care, by laying out common-sense rules of the road to help keep premiums down and prevent insurance industry abuses and denial of care.
It will end discrimination against Americans with pre-existing conditions. And very, very importantly it puts our budget and our economy on a more stable path by reducing the deficit, by a hundred billion (dollars) over the next 10 years -- by cutting government overspending and reining in waste, fraud and abuse -- and about a trillion (dollars) over the second decade, reducing the deficit by about a trillion over the second decade.
So that's the overview. That's what this plan does. That's what health reform will do. And it's important to just keep that in mind, as we now talk about some of the specifics of the president's proposal. As Dan said, essentially what we're talking about here is the Senate bill with some targeted and important changes that achieve the president's goals and bridge the gap between the House and Senate proposals.
So what's new is that the president's proposal eliminates the Nebraska FMAP provision and provides significant additional federal financing to all states, for the expansion of Medicaid, as well as some additional financing to those states that moved forward early and covered additional populations through Medicaid.
It closes the Medicare prescription-drug doughnut hole coverage gap, as the House bill did. It strengthens the Senate bill's provisions that make insurance affordable, for individuals and families, and also makes an improvement vis-a-vis the House bill, with respect to people at the sort of 55,000 to 88,000 range.
It strengthens the provisions to fight fraud, waste and abuse in Medicare and Medicaid, in fact adding some proposals from the president's budget this year on program integrity, as well as a number of proposals from Republican plans.
It increases the thresholds for the excise tax on the most- expensive health plans to make sure that the plans -- the high-cost plans have time to transition and that there's no disruption for workers, from 23,000 for a family plan to 27,500 for a family plan. And it starts that so-called Cadillac plan tax in 2018 for all plans.
And finally, it improves the insurance protections for consumers, and creates a new Health Insurance Rate Authority that you've heard Senator Feinstein talk about. This is something that she worked on with us, and Senator Rockefeller and others have proposed. It will provide federal assistance and oversight to states in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans.
So that's sort of an overview of where the president's proposal makes some important targeted changes to the underlying Senate bill. I'm now -- I guess we'd open up for questions?
MS. DOUGLASS: Yeah. So go ahead, now. We have Dan with us, as I said, and Nancy-Ann, and also Jason Furman. So we'll go ahead and take your questions now.
OPERATOR: Ladies and gentlemen, if you wish to ask a question, we ask that you please press star then 1 on your touch tone phone. You will hear a tone indicating that you have been placed in queue. If you wish to remove yourself from queue at any time, please press the pound sign. And if you are using speakerphone, please pick up the handset before pressing numbers.
Once again, if you have a question, please press star, 1. And we only have time for once question at a time from each person. One moment.
Your first question comes from the line of Jake Tapper. Please go ahead -- from ABC News.
Q Yeah. Hi. It's Jake Tapper. So, quick question, Nancy- Ann. First of all, thanks, guys, for doing this, Linda and Dan, and Jason as well.
If you could just -- is basically the idea with the excise tax on the Cadillac plans and the Cadillac plans -- could you just go into a little bit more detail of this? First of all, is this basically extending what had been negotiated for collective bargaining agreements and just allowing that to happen for everybody, regardless of whether or not there are collective bargaining agreements? And if you could talk about specifics of the excise tax. Thanks.
MR. FURMAN: Yeah. This is Jason. What the White House released about the excise tax several weeks ago -- basically this is the same thing but starts for everyone in 2018. So the threshold in that year would be $27,500 for a family plan. There would be in addition to -- the Senate bill already has adjustments for high-risk occupations -- would also add in adjustment if you have a workforce that's older or for gender-related reasons you have higher health costs, would no longer count dental and vision benefits towards the calculation. So we're starting in 2018.
Now it's important to note that you still get the majority of the revenue from the Senate-passed provision in the second decade and the majority of the benefits for curve bending in the health system as a whole. So I think if you talk to health economists, this has always been about the medium to long run, and the proposal is, in many ways, improved to deal with that, because, for example, it focuses on the costliest plans, rather than firms that hire the costliest workers.
OPERATOR: Your next question comes from the line of David Corn from Mother Jones magazine.
Q Thanks, guys, as well. Following Jake on the excise tax, let me ask you -- House Democrats basically say that they don't like this in any form whatsoever.
And one argument they make is that -- that the president has claimed repeatedly that if you have a plan you like, you will be able to keep it, there will be no change. Their argument is that with an excise tax there will be pressure on plans to change; you won't get the same benefits, or you'll have to pay more, or, you know, employers will make changes for you. How do you address that? And have you spoken to House Democrats about that -- this particular provision of the president's new proposal?
MR. FURMAN: This is Jason again. In terms of what you're saying, you know, this entire plan, not just this provision, is about giving insurance companies more of an incentive to be more efficient, to bring down their rates, to not charge as much as they do. And this provision is just part of it. Doesn't say anyone has to change the coverage they have, but I think everyone would appreciate, if they're in an extremely high-cost plan, being able to get that on a more affordable basis.
OPERATOR: Your next question comes from the line of Laura Meckler, from The Wall Street Journal.
Please go ahead.
Q Thank you. My question is, what is the total cost of this plan now? And how are you going to fund the lost revenue from the excise tax and the extra money you need for the affordability provision?
MS. DEPARLE: Well, Laura, the whole thing is offset. And we believe that there's sort of three categories of changes. One is the changes that we make to improve the affordability and enhance the coverage. We think those changes cost around 75 billion (dollars), and they're paid for by increasing health savings and the employer and individual responsibility payment. So that -- and the funding for states is part of this as well.
So that is offset. That'd be more than paid for by some increased Medicare Advantage savings, as I said, and improving the individual employer responsibility provisions in the Senate bill.
Then the delay and reform of a high-premium excise tax is more than paid for by an additional fee that we're -- a tax. We're expanding the Medicare HI tax base to include unearned income, and there are also some loophole closers that you'll see when you look through the proposal that we're adding. So by doing that, it more than offsets the decrease in the high-premium excise tax by delaying it.
And finally, we're closing the doughnut hole, and there's -- that will be partially offset by an extra $10 billion in fees on branded pharmaceuticals. So, you know, we're relying on previous estimates, combinations of previous CBO scores of these items, and administration effacits (sic) -- estimates. And obviously CBO will be the final arbiter, but we're -- we believe these will be deficit-neutral. We believe -- we have a high degree of confidence in that. And we're committed to making any minor adjustments that would be necessary to bring it back in line.
OPERATOR: Our next question comes from the line of Jeff Mason from Reuters. Please go ahead.
Q Hi, everyone. Thanks very much. My question is about the public option. We've looked through this proposal and haven't seen it. Is a public option introduced here? And can you give a definite response as to whether you support reconciliation being the way that this -- (inaudible) -- in the long term?
MR. PFEIFFER: Sure. This is Dan Pfeiffer. There is not a public option in here. As you know, the president supports a public option. He included it in the first -- in his initial set of proposals on how he wanted to see health reform enacted. That's the first question.
Second question -- we have made no determinations on which process to move forward with, if we -- if this is the path we end up going down, coming out of this meeting.
One thing I want to be very clear about is, the president expects and believes the American people deserve an up-or-down vote on health reform. And our proposal is designed to give ourselves maximum flexibility, to ensure that we can get an up-or-down vote, if the opposition decides to take the extraordinary step of filibustering health reform.
OPERATOR: Your next question comes from the line of Robb -- (inaudible) -- from The New York Times.
Please go ahead.
Q Hi. That's Robb Mandelbaum actually. And I have some questions about the small-business aspects of it.
I want to make sure I understand what your -- what your employer responsibility is. Are you basically following the Senate provision but including a 30-employee deduction and then raising their fee -- penalty from $750 to $2,000? And if so, how did you settle on this? And finally -- can you talk a little bit about that?
And finally my last question is, you talk about $40 billion in tax credits to employers. Does that follow the House or the Senate version?
MS. : That is the Senate version of the small-business tax credit, the Senate version of what a small business is. So a small business is, you know, 50 employees and below and they're exempt. Small businesses are exempt from any of these employer responsibility requirements.
And as you quickly figured out, we also added a cushion in there, to make clear that if you had 51 employees, you wouldn't be paying the full assessment if you didn't offer them health insurance.
So we tried to improve that provision in that way. And also we removed the penalty for a waiting period; we extended that out.
We wanted to strengthen the employer responsibility, and one of the -- you may remember that, during the Senate debate, one of the issues with the Congressional Budget Office and their scoring of this was that they -- you know, you needed to make this strong enough that employers would have an incentive to participate and provide health- insurance coverage. And in testing it, that number of 2,000 was one that made it stronger and helped us get more employer-sponsored coverage. (Pause.)
OPERATOR: Fox News. (Pause.) Mr. Noller (sp), your line is open. Do you have your mute button on?
Q Yeah. Good -- you hearing me all right?
Q Republican leaders have repeatedly said they want to start from scratch. Your plan is a far cry from that. Did you reject the Republican call to that out of hand?
MR. : The president believes that we have done a lot of very good work on health reform over the last year and starting from scratch doesn't make sense. However, we are coming to this meeting with an open mind to additional ideas, and we hope that the Republicans will do the same.
It is our hope that in the -- in the next several days here before, (maybe ?) the Republicans will put forward their plan. There are a number of Republican plans out there. Hopefully they can work together to consolidate.
There has been one proposal. We hope they'll post it online. We're more than willing to have them post it on our website if they would like, or we'll link to it. But I think that bringing -- with each side bringing their best set of proposals to the table, we'll have the most productive meetings.
OPERATOR: Next question comes from the line of Nikole Killion from Hearst Television. Please go ahead.
Q Hi. Thanks very much. And I had to jump off for a quick second, so if you've already answered this, please let me know. But we are currently on the air.
I just wanted more specifics exactly on the tax-credit proposal, how that would work; just kind if you can break down this table here, or kind of give me an example of how it would work for an average family.
MS. DEPARLE: Well, the table just shows in relationship to the House and Senate bills. So the president's proposal relative to the Senate bill lowers premiums for families with income below 44,000 (dollars) and above 66,000 (dollars). And it does that by increasing the tax credits that those families would be eligible for.
And relative to the House bill, the proposal makes premiums less expensive for families with income between roughly 55,000 (dollars) and $88,000. So that was by reducing the cap on the premiums they would have to pay from 9.8 percent of their income to 9.5 percent of their income. So that's the premium assistance that is given in the form of tax credits.
The second way in which the president's proposal changes the underlying Senate bill is that it improves the cost-sharing assistance so that families below 55,000 (dollars) will get additional assistance. And that goes to the insurance company, to reduce their cost sharing, the actuarial value of their plan. So it will cover between 73 (percent) and 94 percent of their health-care costs, depending on their income level. And that's an improvement over where it was in the Senate bill. As you can see on there, in the Senate bill it was 70 percent for someone who -- a family that -- of four, who made between 44,000 (dollars) and 55,000 (dollars). And it's been reduced to -- or it's -- you know, the actuarial value, the amount that's paid, has been increased to 73,000 (dollars).
And very importantly, also, the president is making clear in this proposal that he's adopting the Senate hardship exemption.
That's something that he feels very strongly about; that if a family simply can't afford to purchase health insurance, they should be able to get an exemption from that. That's something that's in the Massachusetts plan. The Senate bill has -- had such a hardship exemption, saying that if you have -- if you're facing premiums that are more than 8 percent of your income, you just -- you're exempt. And as well people below a hundred percent of poverty are also exempt from any individual responsibility requirement.
OPERATOR: Next question comes from the line of Mark -- Mike Shear from The Washington Post. Please go ahead.
Q Yeah. Thanks, guys. Two quick questions. One, the abortion language -- could you tell me if that's in here and sort of where -- how it might be different if it is?
And also, on the Medicaid payments, it sounds like you guys are actually increasing help to states for Medicaid, and I'm wondering, you know, if you could sort of suggest how much and where that money comes from.
MS. DEPARLE: Well, on the second piece, on Medicaid, yes, we are. We're treating all states equitably and adding an additional year of full federal financing, so that there will be four years, starting 2014, of full federal financing for the states for any expansion of Medicaid that's in this bill.
Then, in the out years, 2019 -- 2018, 2019, there will be 95 percent federal financing and, beyond that, 90 percent. So this, we think, gives states plenty of time to adjust to these new responsibilities and give them additional financing, pretty much forever, to cover this expanded population.
As well, we're adding a provision to help states that have -- that have stepped forward early on -- there's about a dozen states that have already covered some people in this population who are uninsured, and we're going to give them some extra assistance as well.
And it's financed in the way that I described before, through the additional fee that we added, through the additional Medicare Advantage savings, from plans. So it's fully offset.
MR. PFEIFFER: In answer to your first question -- right, this is Dan -- the -- just so everyone's clear on what they're looking at when this goes online at 10:00 a.m. today, it is -- it will be the Senate bill which we are working off of, and then a set of proposed changes to the Senate bill. The language to which you're referring is in the Senate bill, because that's the base of how we're doing it here. It's the starting point for the discussion.
OPERATOR: The next question comes from the line of Cheryl Folberg from The New York Times.
Please go ahead.
Q Hi. Brother Scherer (sp) actually asked my abortion- language question, so I think I'm all set. Thank you.
MR. PFEIFFER: Thank you, Cheryl.
OPERATOR: Next question comes from the line of Janet Adamy from Wall Street Journal.
Please go ahead.
Q Hi. Thanks for taking my call. It's just a follow-up question from earlier. Specifically, on the additional costs of these changes, it's been reported that those -- that the additional cost is about 200 billion (dollars). Can you tell us whether that's correct?
And then, also, on the proposal for the new federal regulations on insurance premiums, can you explain why you think this will be more effective in keeping down premiums than the state regulation that we already have? Thanks.
MS. DEPARLE: Yeah, well, we think that the additional coverage -- you know, the affordability changes, Janet, and the Medicaid FMAP additional payments, we think all that adds up to around 75 billion (dollars) in additional costs. And we know, relative to the Senate bill, we don't think it's -- we think it's going to be around 950 billion (dollars). So that would be my answer to that. Fully offset.
OPERATOR: The next question comes from the line of Christopher Fleming from Health Affairs.
Please go ahead.
Q Hi. Two very quick questions. One, what does your proposal do in terms of the exchanges? Specifically, does it move towards the national approach of the House bill, as opposed to the state-based approach of the Senate bill? And then second, just to clarify, you talked about having a unified approach, Democratic approach -- (coughs) -- excuse me -- going into Thursday. Does this proposal as a whole have the support of the House and Senate Democratic leadership, or is it just the president's proposal?
MS. DEPARLE: There are no changes made to the exchanges in the Senate bill.
MR. PFEIFFER: To the -- to your second question -- this is Dan -- this is the -- the proposal we're putting online is informed by our discussions with the House and Senate leadership, since the Senate passed its bill on Christmas Eve, but this is the president's proposal.
OPERATOR: The next question comes from the line of Jon Ward from the Daily Caller.
Q Hi. Good morning, all. One question for you, Dan; one for you, Nancy-Ann. And just politically, what in this -- in this proposal do you think will persuade House Democrats who are wavering because of the political environment to maybe switch from a no vote to an aye or a yes vote?
And then Nancy, does this -- does this proposal change what the Senate bill, I believe -- (clears throat) -- excuse me -- had with the OPM being given authority to negotiate with health insurers? Because Republicans have been pointing to that as evidence of what they see as kind of an architecture for too much government involvement.
MR. PFEIFFER: To take your first question, I think that there are a -- there are a variety of things here that could address concerns that many people -- that many different members on our side of the aisle had. This version deals with affordability, which is a concern of some.
It deals with the -- some of the concerns folks had about -- about some of the special deals that went -- that emerged throughout the process.
And I think in general, having the meeting on Thursday will allow -- having a meeting with both sides of the aisle, on TV for everyone to see, after having had several days to review the proposal, will help take away a little of the concern people had about this seeming to be something that was hatched behind closed doors. We're going to have an open, honest discussion. I think that can only help the process for both sides of the aisle.
MS. DEPARLE: On the OPM issue, that is the multi-state plan which -- the national plan, which actually was an idea that Senator Olympia Snowe and others had. So I'm surprised to hear that -- I haven't heard the Republicans didn't like that. That moves towards letting plans operate nationally, which is something I thought they liked.
MS. DOUGLASS: We have time for one more question.
OPERATOR: And your last question comes from the line of David Davin (sp) from FDL News.
Q Yes. Thanks for taking my call.
My question -- I know you said that you're not putting any limits on the process, but I'm curious, if indeed a reconciliation-type process is used, I'm not sure how something like the national insurance rate regulator would be germane and would be able to be used in that process. Did you take into consideration, you know, the limitations of making those fixes when you put together this plan?
MR. PFEIFFER: This is Dan again. We did take that -- as I said before, the president wants and believes the American people deserve an up-or-down vote on health reform. And this package is designed to provide us the flexibility to achieve that if the Republican Party decides to filibuster health reform. And we -- these calls are -- my understanding is these calls are ultimately made by the Senate parliamentarian, but that was certainly a factor that went into how we put this proposal together.
MS. DOUGLASS: Thank you very much, everybody. Once again, this was on the record, and it is embargoed until 10 a.m. this morning. So thanks very much for joining us.
MR. PFEIFFER: One last thing. The bill will be posted at whitehouse.gov at 10, so you can just check our main White House page and it will all be up there.