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Obama’s budget proposal signals strong commitment to health care reform
President Obama’s $4 trillion
budget proposal for fiscal year 2010 signals a strong commitment to
health care by outlining key health reform principles and calling for a 10-year reserve fund of $630 billion to pay for overhaul of the system. The call for health reform is consistent with President Obama’s recent
statements to Congress. While emphasizing reduced health care costs, improved quality and enhanced efficiencies, the
budget materials do not present the administration’s specific health reform plan.
Health care reform principles. The health reform reserve fund is characterized as a down payment to pursue reform health reform following eight principles:
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Aim for universal coverage by making health care coverage available for all Americans.
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Protect families’ financial health by reducing growth in premiums and bankruptcies due to illness.
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Provide portable coverage to ensure people aren’t locked into a job because of health coverage and aren’t denied coverage because of pre-existing conditions.
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Guarantee choice so Americans can choose their health plans and providers.
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March 4 web briefing
on COBRA changes
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Employers face tight deadlines to
comply with new COBRA special enrollment rights, notices and temporary premium subsidies enacted with the stimulus law. To learn more about these changes, join
this free web briefing.
Date: March 4, 2009
Time: 12:00 noon - 1:00 PM ET
Where: Your Internet-connected computer for the visual and telephone for the audio
Cost: Free
Speakers: Linda Havlin
Kathleen Murray
Kelly Traw
George Wagoner
Questions?
webbriefings@mercer.com
Register Now!
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Make health coverage affordable by reducing administrative costs, unnecessary
testing and other inefficiencies.
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Invest in prevention and wellness
by focusing on public health measures that reduce cost (such as obesity,
sedentary lifestyles and smoking).
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Improve patient safety and quality care by
implementing proven patient safety measures, encouraging delivery system changes
that reduce unnecessary variability in patient care and promoting widespread use
of health information technology to support these improvements.
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Maintain the program’s long-term fiscal sustainability
by implementing a reform plan that slows cost growth and improves productivity
and by finding additional sources of revenue.
Financing the health reform reserve fund.
The $630 billion health
reform reserve fund would be primarily financed through two sources: (1) higher
taxes on individuals with incomes exceeding $200,000 and families with incomes
exceeding $250,000; and (2) Medicare and Medicaid savings through various
reforms, including these proposals:
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Reduced
Medicare Advantage (MA) plan payments, resulting in an estimated $175 billion
over 10 years
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Lower drug
prices by making generics more available for biologic drugs and increasing the
Medicaid drug rebate for brand-name drugs
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Expanded “pay
for performance” incentives to reward providers for higher-quality care
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Restructured
physician payment system with the goal of improved quality and efficiency.
Building on recent reforms. The budget outline describes incremental health reforms
enacted in the opening month of the Obama administration. The first of these
measures reauthorized and expanded the Children’s Health Insurance Program
(CHIP) to impose some new employer requirements. Additional reforms under the
American Recovery and Reinvestment Act of 2009 include a new temporary COBRA
premium subsidy
program, incentives to spur adoption of health information technology, and
investments in prevention and wellness.
Employer considerations.
Although the budget proposal omits details, it gives
employers an early look at what might emerge from upcoming health reform
discussions and provides an opportunity for initial assessments. For example,
government efforts to improve health care quality and prevention are aligned
with employer initiatives and could ultimately shrink costs for everyone,
including employers. Other components, such as partially funding the health
reform reserve through cuts in MA plan payments, could reduce the availability
of these plans and impact employers whose retiree medical offerings include MA
plans.
Moving forward.
The Obama administration is expected to release its budget details in
mid-April. In the interim, the White House has nominated Kansas Gov. Kathleen
Sebelius as secretary of Health and Human Services and named Nancy-Ann Min
DeParle to head the White House Office for Health Reform. These activities,
along with a March 5 health reform summit, indicate that the Obama
administration is moving forward in pursuit of comprehensive health care reform. | 
