WASHINGTON (Reuters) - U.S. President Barack Obama’s plans to overhaul the $2.5 trillion healthcare industry got a boost on Tuesday as Democrats in the House of Representatives offered sweeping legislation and predicted passage on schedule by August.
House Democratic leaders released their 1,000-page proposal which breaks new ground for the United States in healthcare by offering a government insurance option that would compete with private insurers.
A healthcare overhaul is considered central to the success of Obama’s administration, and he has pressed the Democratic-led Congress to move swiftly on legislation to provide insurance coverage for all Americans, control soaring medical costs and improve quality of care. He hopes to sign the bill by October.
The insurance industry, which has objected to the government plan, in a statement said the bill “would dismantle employer-based coverage.” The Pharmaceutical industry also said it opposed the House bill which it said would raise expenses for senior citizens.
Congressional budget analysts said the Democratic plan would reduce the number of uninsured by about 37 million and cost about $1.04 trillion over 10 years.
It is partially paid for with a planned tax on the wealthy that would raise $544 billion over 10 years, but vehement objections to the tax increase may force lawmakers to search for other ways to pay for it.
Savings from changes in the government-run healthcare systems for the poor and elderly are to bring in several hundred billion dollars more.
Obama and other Democrats have vowed that the healthcare overhaul will not add to the burgeoning U.S. deficit.
Healthcare reform failed in the previous Democratic administration of Bill Clinton. Since then millions of Americans have remained without health insurance, even as the country’s spiraling healthcare costs per capita are the world’s highest.
Obama praised the healthcare overhaul introduced by House Democrats, in a statement saying “this proposal controls the skyrocketing cost of health care by rooting out waste and fraud and promoting quality and accountability.”
“We, quite frankly, cannot go home for a recess unless the House and the Senate both pass bills to reform and restructure our healthcare system,” Representative Henry Waxman, a driver of the health care overhaul, told reporters.
House Democratic Leader Steny Hoyer said the plan was on track for swift action before the August congressional break. “We believe this can be done,” he said.
Obama urged congressional leaders to pass the bills in each chamber before the August congressional recess.
The House Ways and Means Committee, one of three House panels writing the bill, planned to start debate and votes on Thursday. The Senate is working on its own version and one committee was to finish work this week with the second, which will grapple with paying for the plan, to start next week.
In the face of criticism from Republicans who typically oppose tax increases, House Democratic leaders said the tax on the wealthy was “only one option” to help lower costs and ensure coverage for more of the 46 million uninsured.
Republicans immediately slammed the House Democrats’ plan.
The senior Republican on the tax-writing committee, Representative Dave Camp, warned a tax hike would hurt employers.
“The problem is to what extent those taxes will hit job creators. ... How are we going to recover from this high unemployment and this deep recession by raising costs on job creators,” he told Reuters.
While most Americans are already covered by employer-provided health insurance, under the House plan employers would be required to offer coverage or pay into a government fund.
The legislation includes subsidies to help individuals buy insurance, and requires all those not covered by employer plans or the government programs to buy insurance or face a penalty.
Among the sweeping changes in the health insurance industry, it would bar insurers from denying coverage to anyone based on pre-existing medical conditions.
The plan calls for an additional tax of 1 percent which would be levied on couples earning more than $350,000. Those with $500,000 incomes would pay an extra 1.5 percent, and millionaires would pay an additional 5.4 percent.
The plan includes a blue-ribbon commission through the U.S. Institute of Medicine that would have a year to recommend changes in Medicare reimbursement rates and would seek to reward improvements in quality of care instead of current payments for quantity of treatments and care.
Government-paid programs — Medicare for the elderly and Medicaid for the poor — account for about one-third of total U.S. spending on healthcare, which overall makes up nearly 17 percent of U.S. gross domestic product.
Drug companies, health insurers and hospitals have all been asked to commit to helping save government health dollars. Drug companies would be required to give rebates for medicines to the poor and elderly.
In an effort to get more quality for the least cost, a panel of doctors, patients and healthcare companies would weigh the effectiveness of different types of treatment.
Additional reporting by Richard Cowan, Kim Dixon and Jackie Frank, writing by Jackie Frank, editing by Howard Goller and Vicki Allen