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Q+A: U.S. healthcare overhaul proposals and goals

(Reuters) - President Barack Obama has made overhaul of the nearly $2 trillion U.S. healthcare system the major domestic policy goal of his first year in office, and hopes to have the deal completed by the Democratic-controlled Congress and on his desk by October.

WHAT ARE THE GOALS OF U.S. HEALTHCARE OVERHAUL?

* The major goals are to curb rapidly rising costs and expand health insurance coverage to the 46 million uninsured Americans. Many analysts consider another 25 million to be underinsured. U.S. healthcare now consumes $2.2 trillion a year, nearly $7,471 per person. This equals 16 percent of GDP with a projected rise to 25 percent of GDP by 2025.

HOW DO AMERICANS PAY FOR HEALTHCARE NOW?

* An estimated 163 million Americans under age 65 have employer-paid insurance, for which most share the cost of premiums and a portion of the cost of drugs and medical care with their employer.

* Another nearly 18 million Americans buy insurance in the individual market, which can be very expensive.

* Medicare, the government-run healthcare program for those over age 65 or disabled, covered 44 million in 2007.

* Medicaid, the joint federal-state healthcare system, covered almost 61 million poor Americans, of which nearly half were children. It also paid for most long-term healthcare for the elderly and disabled.

WHAT CHANGES IS CONGRESS CONSIDERING?

* All individuals would be required to obtain insurance under all of the options being considered in the House of Representatives and the Senate.

* All the bills are expected to bar insurance companies from refusing to cover people or charging them more because of health history or gender.

* The bills are expected to call for sweeping insurance market reforms including limits on insurance premiums.

* The House bill would set up a new government-run insurance program to compete with private insurance companies. The Senate Finance Committee, chiefly to address Republican concerns, is instead looking at creating nonprofit medical cooperatives to compete with insurers.

* The House and Senate Finance Committee bills would both create state insurance exchanges to act as clearinghouses for individuals and small businesses to buy insurance.

* The Senate health committee bill includes a sliding scale of subsidies for the purchase of insurance for people with incomes up to 500 percent of the poverty level. The Senate Finance Committee bill would scale that back to 300 percent of the poverty level, about $66,150 for a family of four.

* The House Ways and Means Committee bill includes a graduated surtax on individuals making more than $350,000, $500,000 and $1 million.

WHAT IS INDUSTRY’S INVOLVEMENT?

* Hospitals opposed the Obama administration’s original proposal for $220 billion in payment cuts, but have agreed to $155 billion in cuts over 10 years, in part from reduced Medicare and Medicaid payments.

* Insurers oppose creating a new government-run insurance program. They are discussing payment cuts for Medicare Advantage health plans for the elderly and disabled offered by some companies to compete against private insurers.

* Drug companies agreed to $80 billion in prescription drug discounts over the next 10 years, in part by reducing the cost of medicines for elderly Medicare patients. They oppose requiring lower prescription drug prices for poor, elderly people who qualify for both Medicare and Medicaid programs.

Brand-name drug makers want 12 to 14 years of exclusivity for new biotechnology medicines before cheaper, generic versions are approved by the Food and Drug Administration. The Obama administration has endorsed seven years of protection.

WHICH CONGRESSIONAL COMMITTEES ARE IN CHARGE?

* In the Senate:

Finance Committee Chairman Max Baucus, a Democrat, and the panel’s senior Republican, Sen. Chuck Grassley, have taken the lead in the debate, writing legislation aimed at reducing soaring costs and expanding coverage

Senate Health Committee Chairman Edward Kennedy, a Democrat, has been a Senate leader on healthcare legislation, pushing for a patient’s bill of rights and expansion of Medicare, to lower prescription drug costs. Kennedy has been out due to illness, so Christopher Dodd has taken the lead.

* In the House of Representatives:

The bill is being written jointly in the House Energy and Commerce Committee, House Ways and Means Committee and House Education and Labor Committee. Their goal is to expand healthcare insurance to include Americans who lack coverage. Ways and Means has jurisdiction over taxes under Democratic chairman Charles Rangel.

WHO ARE THE KEY PLAYERS IN THE OBAMA ADMINISTRATION?

* Health and Human Services Secretary Kathleen Sebelius leads Obama’s healthcare push.

* Nancy-Ann DeParle, director of White House Office of Health Reform, is charged with coordinating reform efforts with Congress.

* Rahm Emanuel, White House chief of staff, is a former congressman who was also a senior adviser to Clinton. He formerly was chairman of the House Democratic Caucus.

WHAT ARE THE NEXT STEPS?

House Speaker Nancy Pelosi says the Democratic-controlled chamber hopes to pass its version by the congressional August recess.

The Senate Health Committee is working its way through several hundred proposed amendments before it can agree on a bill. The Senate Finance Committee has not started debating its version. Senate Majority Leader Harry Reid has said the chamber should finish by August.

The versions passed by each chamber would have to be reconciled into a compromise plan -- which could be difficult if the House votes to set up a new government-run insurance option and the Senate does not. The president wants both chambers to pass the final version and have it to him by October.

Editing by Will Dunham

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