President Obama would pay for a $1 trillion health reform plan by finding about $660 billion in savings in Medicare and Medicaid over 10 years and also by raising income taxes on those earning more than $250,000 a year.
That’s according to Health and Human Services Secretary Kathleen Sebelius who appeared today before the House Energy and Commerce Committee to describe the administration’s support for a reform plan jointly hatched by three House committees.
Among other things, the Democratic plan would expand Medicaid eligibility to include all adults who earn 133 percent or less of federal poverty guidelines, or about $14,000 a year.
In Kansas, that would mean about 100,000 adults currently without insurance could be covered at federal expense. An estimated 340,000 Kansans lack health insurance. Eligibility for adults in the Kansas Medicaid program, generally is limited to those earning less than 30 percent of poverty or about $3,249 a year.
The House plan’s costs have not been calculated yet by the Congressional Budget Office but a Senate plan with many similarities would cost more than $1 trillion over 10 years, according to CBO.
Both plans would expand Medicaid with the full costs to be paid by the federal government. Currently, the national government pays about 60 percent of Medicaid costs and the states pick up the balance.
Sebelius’ comments to the committee were in response to Republican concerns that the proposals that include a public plan option would cost too much and increase the federal budget deficit.
“We’re not open to deficit spending,” Sebelius told committee members. “It (reform) will be deficit-neutral over 10 years. Many resources will come from wringing waste out of the system and aggressively pursuing fraud and abuse.”
Her remarks echoed those made by the president Tuesday in a press conference.
“The president has said consistently he will not sign a bill unless it’s paid for,” she said when pressed by Republicans demanding to know how the reforms would be paid for. “This is a discussion draft and what I can assure you is that at the end of the day, the bill that will pass will be paid for.”
Insurance overcharges
Also on Wednesday, Democrats in the Senate took aim at the insurance industry, which has come out against provisions in the reform plans that would create a public health plan as an option for those who cannot afford or qualify for private insurance.
The Senate Commerce Committee released a report stating that “in every region of the United States, large health insurance companies have been using two faulty database products owned by Ingenix, Inc., to under-pay millions of valid insurance claims.”
Ingenix was owned by one of the nation’s largest health insurers and used data provided by the industry to calculate amounts the companies paid on claims for out-of-network services.
According to Democrats, the doctored databases cost policyholders billions of dollars in claim costs the insurance companies should have paid.
Insurance insider testifies
Committee members also heard testimony from former insurance executive Wendell Potter of Philadelphia, Pa., who said he came forward to describe the industry’s practices because he was concerned the insurance lobby would derail reform as it did during the Clinton administration.
“The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent, publicly-accountable health care option as a government-run system. But what we have today is a Wall Street-run system that has proven itself an untrustworthy partner to its customers, to the doctors and hospitals who deliver care, and to the state and federal governments that attempt to regulate it,” Potter said.
“This time, though, the industry is bigger, richer and stronger, and it has a much tighter grip on our health care system than ever before,” said Potter, who previously worked as director of corporate communications for CIGNA. “In the 15 years since insurance companies killed the Clinton plan, the industry has consolidated to the point that it is now dominated by a cartel of large for-profit insurers.”
House members also heard a variety of testimony for and against the Tri-Committee plan.
Some of the strongest criticism came from supporters of a single-payer system, some of whom said the proposal was designed to appease the private health insurance industry.
“There is no way we are ever going to get to having good health insurance for everyone, as long as there’s a health insurance industry, in the way, obstructing care,” said Sidney Wolfe, director of the health research group at Public Citizen, a consumer-protection organization.
The committee, which took testimony into the evening, was scheduled to resume its hearings Thursday.