June 23, 2009

Congress aim to enact health care reform

President Obama on June 2 said the “make or break period” for action on health care reform legislation is between now and the August recess. Following a White House meeting on health care legislation, Senate Finance Committee Chairman Max Baucus, D-Mont., predicted a health care reform bill would reach the president’s desk in October. Baucus said that “all options are on the table” and indicated that the president “might consider” proposals to tax employer-provided health insurance.

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White House spokesman Reid Cherlin said that, while all options should be considered, they should include the revenue proposals in the president’s budget. “The President made it clear during the campaign that he has serious concerns about taxing health care benefits,” Cherlin noted.

Obama said the White House will work with Congress on a bill that reforms the underlying health care system “promoting best practices, not just the most expensive practices.” The president said that “reform is a necessity” and that the soaring cost of health care is unsustainable for families, businesses and government. Without reform, 20 percent of the U.S. economy will be “tied up in the health care system” in ten years, Obama warned.

At a White House health care press briefing, Baucus reaffirmed his support for placing an “appropriate limit” on the current tax exclusion for employer-provided health insurance. Baucus and Sen. Charles E. Grassley, R-Iowa, ranking member of the Finance Committee, on May 18 released health care financing option that contained proposals for changing the exclusion for employer-provided health insurance. They included capping the exclusion based on the value of health insurance policy or the income level of the employee eligible for the exclusion, capping the exclusion based on both the value of the health insurance policy and income level, converting the employer-provided health insurance exclusion to an individual tax deduction or credit, and grandfathering existing plans so that benefits provided under existing collective bargaining agreements are not limited.

Linda Douglass, a spokeswoman for the White House Office on Health Reform, maintained that President Obama’s plan and budget have enough savings and revenue to pay for revamping the system. During his presidential campaign, Obama system said that health care reform must be built on an employer-based system, Douglass noted. “I think we need to stay where we are,” said Office of Management Budget Director Peter Orszag, but he added that the White House also wants the legislative process to play out.

The Council of Economic Advisers (CEA) on June 2 released a report that made the Obama administration’s case about the economic benefits of health care. CEA Chair Christina Romer said that “doing good health care reform is good economic policy.” A genuine restraint on health care costs will increase the standard of living, lower the federal budget deficit and reduce unemployment, Romer said.

Source: http://hr.cch.com/news/hrm/062309a.asp

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