Obama leaves door open to health benefits tax

By David Espo and Philip Elliott
Associated Press / June 25, 2009
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WASHINGTON - President Obama left the door open to a new tax on healthcare benefits yesterday, and officials said top lawmakers and the White House were seeking $150 billion in concessions from the nation’s hospitals as they sought support for legislation struggling to emerge in Congress.

“I don’t want to prejudge what they’re doing,’’ the president said, referring to proposals in the Senate to tax workers who get expensive insurance policies. Obama, who campaigned against the tax when he ran for president, drew a quick rebuff from organized labor.

Obama also fielded a pointed personal question during an ABC News town hall at the White House yesterday. The prime-time program was the latest in a string of events designed to build public support for his plan to slow the rise in healthcare costs and expand coverage to the nearly 50 million uninsured.

Dr. Orrin Devinsky, a neurologist at the New York University Langone Medical Center, challenged Obama: What if the president’s wife and daughters got sick? Would Obama promise that they would get only the services allowed under a new government insurance plan he is proposing?

If “it’s my family member, if it’s my wife, if it’s my children, if it’s my grandmother, I always want them to get the very best care,’’ Obama said.

The United States is the world’s only developed country that lacks universal healthcare. About 50 million of the US population of 300 million have no health insurance. The poor and elderly receive government care, but most Americans rely on private insurance, usually received through their employers.

The administration and its allies pushed yesterday for a prominent display of progress in the Senate before Congress begins a weeklong vacation tomorrow.

Senate Finance Committee Chairman Max Baucus, a Democrat, labored in a series of meetings to produce at least an outline of legislation that could command bipartisan support. Of the five House of Representatives and Senate committees working on healthcare, Finance is the only one that appears to have a chance at such an agreement.

Key Republicans pressed the White House for assurances that any concessions made now would not merely lead to additional demands at a later date. “We want to know the president is working in good faith along the way as we are,’’ said Senator Olympia Snowe of Maine after meeting with Nancy-Ann DeParle, the top White House official on the issue.

Several officials said Baucus was negotiating with representatives of the nation’s hospitals, hoping to conclude an agreement that would build on an $80 billion weekend deal with the pharmaceutical industry.

Hospitals were being asked to accept a reduction of roughly $155 billion over the next decade in fees they are promised under government programs such as Medicare and Medicaid, according to numerous officials.

Officials at the American Hospital Association and the Federation of American Hospitals said they could not comment on any discussions.

Baucus is seeking similar concessions from nursing homes, insurance companies, medical device makers, and possibly others, noting that any legislation would create a huge new pool of customers for industry providers.

At its heart, any legislation is expected to require insurance companies to offer coverage to any applicant, without exclusions or higher premiums for pre-existing medical conditions.

Baucus has said he hopes to hold the size of any legislation to $1 trillion or less, and in private negotiations, there were discussions about further scaling back eligibility for insurance subsidies from the government.

Additionally, Baucus was still searching for ways to cover the cost of his emerging legislation, and numerous officials said he appeared roughly $200 billion shy of achieving that goal.

At the White House, Obama was asked if he was open to taxing healthcare benefits - a proposal he opposed vigorously in the campaign for the White House. “I have identified the ways that I think we should finance this. I think Congress should adopt them,’’ he said on ABC’s “Good Morning America.’’