Orszag Says U.s. Health-care Overhaul Will Be Enacted This Year
“We think were going to get this done before the end of the year,” Orszag said yesterday at the Bloomberg Washington Summit. “We need the Senate to move, and we need to move to conference” to negotiate a House-Senate compromise, he said.
Lawmakers are trying to craft legislation to cover tens of millions of uninsured Americans while curbing medical costs. Theyre wrestling with whether to create a government-run insurance program, whether to require employers to cover workers and how to pay for plans that top $800 billion over 10 years.
One proposal being considered by lawmakers is to apply Medicare taxes to capital gains earned by wealthy Americans. Orszag wouldnt say whether the White House supports that approach. “We have to see the package as a whole,” he said.
Senate Majority Leader Harry Reids staff has sought input on the idea from aides to senators such as Budget Committee Chairman Kent Conrad, a North Dakota Democrat, and Maines Olympia Snowe, the only Republican senator to vote for the legislation, according to two congressional aides who spoke on condition of anonymity.
Details of Proposal
Medicare, a government-operated insurance program for the elderly, is funded by a 2.9 percent hospital insurance payroll tax. Half is paid by the worker, half by the employer. There is no cap on wages subject to the levy.
Lawmakers are casting around for new sources of funding as they prepare to make the biggest changes to U.S. health care since the creation of Medicare in 1965. Their proposals call for all Americans to get insurance, with new purchasing exchanges and subsidies to help.
Delays have dogged the legislation all year. The Senate has yet to unveil a full bill, and 25 Republican senators yesterday asked Reid for another analysis of medical spending from the Congressional Budget Office before starting debate.
The House passed its version of the bill 220-215 on Nov. 7 and included a 5.4 percent income surtax on individuals earning more than $500,000 and couples making more than $1 million. That “millionaires tax” has drawn fire in the Senate.
Cadillac Tax
Yet the Senates idea for a 40 percent excise tax on high- end, Cadillac health benefits hasnt found consensus, either. Critics say the tax would hurt rank-and-file workers and violate Obamas pledge not to raise taxes on couples earning less than $250,000. A Senate Finance Committee plan would generally apply the tax to family benefits worth more than $21,000.
The House income-surtax plan would raise about $461 billion in revenue through 2019 to help fund health care, according to an official estimate by the nonpartisan congressional Joint Committee on Taxation. The proposed Senate tax on Cadillac plans would generate $201 billion over the same period.
Jim Manley, a spokesman for Reid, said “no decisions have been made” and wouldnt comment on the Medicare tax proposal. Conrad spokesman Steve Posner and Snowe spokeswoman Julia Wanzco didnt answer questions.
House lawmakers briefly weighed increasing or expanding the Medicare tax, a House staffer said. The idea was rejected because lawmakers concluded they might need to increase the payroll tax in the future to pay Medicare benefits that are projected to outpace revenue, the aide said.
Business Roundtable
To bolster their overhaul efforts, Orszag and the White House yesterday pointed to a study released by the Business Roundtable. The group, which says its member companies provide health coverage to more than 35 million Americans, released a report showing that “effective reforms” could slow health-care costs by as much as $3,000 per employee by 2019.
Still, the report raised concerns about aspects of the pending bills, including the government-run insurance program, or public option. The report also concluded that any bill must have a strong requirement that all Americans get insurance.
“Reform done wrong wont work and could make a bad situation much worse, in which case Business Roundtable could not support the bill,” Eastman Kodak Co. Chief Executive Officer Antonio Perez, chairman of the Washington-based groups consumer health and retirement initiative, said in a statement.