Factbox: Summary of Obama's healthcare proposal

(Reuters) - The White House tried to rescue its stalled healthcare overhaul with a proposal on Monday based on a sweeping bill passed in December by the Senate but with changes meant to bridge differences with legislation passed by the House of Representatives in November.

Here is a summary of the latest proposal.


The White House plan calls for state-based insurance exchanges similar to the proposal in the Senate-passed bill.

The White House proposal does not call for the creation of a new government-run health insurance program -- the so-called “public option” supported by liberals and included in the House bill.

Instead, it sticks with the Senate version, which provides for the federal Office of Personnel Management to negotiate with private insurers to provide multi-state health plans on the exchanges.


The White House rejected the House-proposed 5.4 percent surtax on high income households, the so-called millionaires’ tax, and instead adopted the Senate approach to raise the Medicare tax on high-income earners to 2.9 percent from 2.35 percent. But the White House plan goes one step further and would impose a new 2.9 percent Medicare tax on some investment income for high-income people. Medicare is the government health insurance program for the elderly and disabled.

The White House plan also modifies the proposed Senate tax on high-cost insurance plans. The so-called “Cadillac” tax would kick in on plans costing $10,200 for individuals and $27,500 for family plans. The starting date for the tax is 2018 rather than 2013 as originally called for in the Senate bill. The change is similar to a deal worked out with labor unions, but would apply to all plans.

The proposal also provides higher tax thresholds for firms that have higher costs because they employ mostly women or older workers. It also provides higher thresholds for high-risk professions such as firefighters.

The president’s plan increases proposed new assessments on brand-name pharmaceuticals to raise $23 billion over 10 years compared to $10 billion in the Senate bill. Those assessments would be delayed by one year until 2011.

The White House also proposed closing a tax loophole on a cellulosic biofuels credit to prevent it from being used for a paper processing byproduct. It would also clarify “economic substance” tax rules on investment transactions and raise penalties on transactions that have no economic purpose except to avoid paying taxes.


The White House plan would improve affordability by taking favorable provisions from the House and Senate bills to help both low- and moderate-income families. A family of four earning as much as $88,000 a year would receive federal assistance in paying for healthcare costs under the president’s proposal.

The bill would also gradually close the so-called “doughnut” hole in Medicare prescription drug coverage. Currently, Medicare stops paying for drugs after both the plan and beneficiary have spent $2,830. Coverage starts again only after out-of-pocket spending hits $4,550. By 2020, the coverage gap would be closed.


The White House plan would allow young adults up to the age of 26 to stay on a parent’s health insurance plan. Within months of enactment, insurers would be barred from dropping people from their health plans. When exchanges begin operation in 2014, insurers would be barred from excluding people for pre-existing conditions and setting annual and lifetime coverage limits. The Department of Health and Human Services would get new authority to help states review annual premium rate increases.


The White House keeps the Senate and House requirement that individuals purchase health insurance. It sided with the Senate on not imposing an employer mandate and assessing fees on those uninsured companies with employees receiving subsidized health policies on the exchange. The White House modified the fees that those companies would pay.

Small firms with fewer than 50 employees would be exempted from those requirements. But a tax credit is provided to encourage small companies to offer health coverage to workers.

Reporting by Donna Smith in Washington; Editing by Howard Goller and Will Dunham