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Obama gives break to states

2/22/2010 © Health News Florida

Pres. Obama's proposed health plan, released this morning, offers more support to the states for expanding Medicaid enrollment than previous proposals, following Sunday's call by Democratic governors to offer states relief.

The President's proposal would pay 100 percent of the cost of Medicaid for newly eligible recipients from 2014 to 2017, 95 percent through 2019 and 90 percent for 2020 and thereafter.  In effect, it extends the favorable treatment that had been accorded to Nebraska in return for the vote of Sen. Ben Nelson to all the states.

The most visible new idea in the President's proposal is for a federal rate-review board that would have the power to roll back premium hikes that it viewed as unwarranted.

The proposal, which mostly cleaves to the centrist Senate version of health reform, departed from it to lower the cost of premiums for the middle class. There had been great concern from all parts of the political spectrum that the premiums would be unaffordable.

The plan is projected to ensure 31 million Americans, cost $950 billion over 10 years and garner savings that would reduce the deficit by $100 billion the first decade and up to $1 trillion the second decade. 

Republicans quickly issued a statement slamming the proposal as a "government takeover." However, the option of enrolling in a public plan is not included in the President's proposal.

Among other things, it contains:

--A health exchange in which qualified health plans can compete for new enrollees. The exchange, national in scope, is modeled after the federal employees' plan; thus consumers could have the same choices as members of Congress.

--A requirement that all Americans carry health coverage, except in hardship cases, with cost based on ability to pay. Families would get tax credits to help with the cost. 

--Large employers that don't cover their workers, forcing them to seek coverage in the exchange, will have to pay a fine to cover the cost. Small employers will get tax credits to cover their workers, beginning this year.

--Closes the "doughnut hole" coverage gap in the Medicare prescription drug program. Trims back the payments to Medicare Advantage plans to be closer to traditional Medicare.

--Requires insurers to take all comers and bars them from dumping customers when they get sick or refusing to cover "pre-existing conditions."
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