Obama issues health care compromise
Proposal would ease cost limits that dictate excise tax on pricier health care plans.
The White House on Monday released a compromise proposal on health care reform that includes higher premium thresholds and would delay the start date of an excise tax on so-called Cadillac health care plans.
The excise tax, included in the Senate's health care bill, would impose a 40 percent tax on the value of health care plans that exceed a set premium threshold. While the tax would be levied on insurance carriers, critics have said those costs would be passed on to middle-class policyholders and lead to fewer benefits and higher out-of-pocket expenses.
The administration's proposal includes premium threshold levels of $10,200 for an individual plan, $1,700 more than the level included in the Senate's bill, and $27,500 for family plans, an increase of $4,500 from the Senate's recommendation. Once the excise tax took effect, thresholds would increase, at the same rate of general inflation, plus one percentage point. The president's plan also would push back the tax's start date from 2013 to 2018 for all those affected by it.
The White House proposal seeks to calm fears about the excise tax, which critics have argued could erode benefits for many, including federal employees. Administration officials described the compromise as their "best shot" for merging dueling House and Senate health care bills, but said they would be open to Republican ideas heading into Thursday's health care summit.
The recommendation also includes protections contained in the Senate bill for U.S. workers in high-risk fields and an adjustment to provide relief for employers with older workforces. That could be a crucial factor for the Federal Employees Health Benefits Program, which includes many retirees, but the White House hasn't released any further details about that provision.
"The devil is in the details," said Daniel Adcock, legislative director for the National Active and Retired Federal Employees Association. "The average age of FEHBP tends to be higher than other employer-sponsored health insurance. We want to ensure that fact is taken into account."
The new plan would broaden an exemption announced earlier as part of a compromise deal. Previously, the delayed start to the excise tax only would have applied to non-political government workers and union members.
The fate of the health care bill has been in limbo since the January election of Massachusetts Republican Scott Brown who deprived Democrats of their filibuster-proof majority and has vowed to vote against the legislation.