Four divisive issues could dash President Barack Obama’s hopes of overhauling health care: Cost, creating a government-run plan, taxing workers’ benefits and penalizing employers that don’t offer coverage.
These are potential deal breakers as Obama and the Democratic-controlled Congress work to revamp the system to cover the nearly 50 million uninsured Americans and try to check rising medical costs.
Here’s a look at each issue, and how key players line up:
Costs
Senate Finance Committee Chairman Max Baucus, D-Mont., says he’s pared down the cost of his bill to under $1 trillion over 10 years, but across the Capitol, House Democrats aren’t yet revealing the price tag for their legislation. There’s a reason. The more generous House version may cost a lot closer to $2 trillion.
Costs could explode in future years, particularly if the government is helping solid middle-class households pay for coverage, which already costs about $13,000 a year for a family plan.
The bigger the price tag, the more likely higher taxes will be needed sooner or later.
Employers
Businesses now provide coverage to more than 160 million people, although no law says they must.
But both the House and Senate are considering new employer obligations, and under the House Democrats’ plan, employers would be required to provide coverage or pay a penalty.
The Senate Finance Committee is taking another approach. There wouldn’t be any requirement that employers provide health insurance. But if a company’s workers wind up getting taxpayer-subsidized insurance, the employer would have to pay part of the cost.
Government Plan
Of all the divisive issues, Democrats’ idea for a new government health plan to compete with private insurers has generated the most political passion.
It would mark the first time government gets into the business of providing medical insurance for middle-class workers and their families — a major expansion of its role.
The public plan would be available through a new kind of insurance purchasing pool called an exchange, which would also offer private plans. The purchasing pools would be open to individuals and small businesses.
Insurers, employers and congressional Republicans are adamantly opposed, saying the government would eventually drive out private coverage. Democrats are just as strongly in favor of the idea, saying the insurance industry needs competition. Attempts to find compromises, including setting up nonprofit co-ops, haven’t defused the situation.
Benefits Tax
During last year’s presidential campaign, Obama criticized Republican rival Sen. John McCain for proposing to tax workers who receive employer-provided health insurance to raise money for covering the uninsured.
Now the president may have to take back his words and break a campaign promise not to raise taxes on Americans making less than $250,000.
Key senators are saying it won’t be possible to pay for expanded coverage without taxing some health benefits.
The Senate Finance Committee is eyeing plans with a total premium cost above $17,000 for family coverage. Labor unions are flabbergasted that Obama hasn’t slammed the door on the idea.
