He’s going for it

HE’S GOING FOR IT…. In his address to Congress this week, President Obama said, “Health care reform cannot wait, it must not wait, and it will not wait another year.” Apparently, he meant it.

President Obama is proposing to begin a vast expansion of the U.S. health-care system by creating a $634 billion reserve fund over the next decade, launching an overhaul that most experts project will ultimately cost at least $1 trillion.

The “reserve fund” in the budget proposal being released today is Obama’s attempt to demonstrate how the country could extend health insurance to millions more Americans and at the same time begin to control escalating medical bills that threaten the solvency of families, businesses and the government.

Obama aims to make a “very substantial down payment” toward universal coverage by trimming tax breaks for the wealthy and squeezing payments to insurers, hospitals, doctors and drug manufacturers, a senior administration official said yesterday.

Embedded in the budget figures are key policy changes that the administration argues would improve the quality of care and bring much-needed efficiency to a health system that costs $2.3 trillion a year.

The White House first step doesn’t include the details of a reform proposal, and that’s a deliberate part of the broader strategy — the president intends to move forward with the down payment on a plan, while working cooperatively with Congress to shape the plan itself.

Paying for the investment is, of course, the tricky part (at least, one of the tricky parts). The administration has sketched out a proposal that would “reduce the value of itemized tax deductions for everyone in the top income tax bracket, 35 percent, and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple.” This would cover about half of the healthcare fund, with the other half coming from “proposed cost savings in Medicare, Medicaid and other health programs.”

The administration seems well aware of the fact that a $634 billion over 10 years would not cover literally everyone. Neera Tanden, a top Obama health adviser, acknowledged, “We know that this is not enough to achieve our overall goal of getting health care for every American, but it is a significant down payment.”

It is, indeed. And while the down payment may only be the first step, this isn’t incrementalism — it’s a significant step forward. Jonathan Cohn noted, “How big an investment is that? It’s pretty big — more, I believe, than any president has proposed setting aside for coverage expansions to the non-elderly since Clinton tried for universal health insurance in the 1990s. And it confirms that Obama is serious about pursuing health care reform, beyond small incremental steps.”

Igor Volsky emphasized how different this approach is from the early ’90s: “Overall, the fund is a good start, but it’s certainly not enough to reach universal coverage. Still, the Obama administration has learned from the mistakes of past reform efforts. Unlike the Clinton strategy, which didn’t include any money for health reform in the budget, and left Congress to digest a 700+ page health plan, Obama and Congress will fill in the details of reform.”

And publius highlighted the broader significance: “Obama is pushing for national health care reform — the crown jewel of the progressive legislative agenda — while simultaneously trying to break down the modern political coalitions that Nixon and Reagan built. This guy is swinging for the fences — and swinging hard.”