KEY FEATURES:POSTERITY WILL judge whether Barack Obama was too late in coming up with his own plan for overhauling US healthcare – as he did in his speech on Wednesday night. But to most observers, Mr Obama's plan sounded remarkably similar to the one put forward earlier this week by Max Baucus, the centrist Democrat chairman of the Senate finance committee.
At a cost of $900 billion over the next decade, Mr Obama’s proposal was just $20 billion higher than the 18-page outline circulated by Mr Baucus. Both are lower than the $1,000 billion version in the House of Representatives.
The only key difference is that Mr Obama signalled that he still preferred to have a “public option”, or a government insurance plan, whereas Mr Baucus has jettisoned it outright.
Even here, though, Mr Obama signalled he would be willing to bargain it away. “Its impact shouldn’t be exaggerated – by the left or the right or the media,” he said. “It is only one part of my plan, and shouldn’t be used as a handy excuse for the usual Washington ideological battles.”
Here are the key features of what Mr Obama put forward.
First, all Americans would be required to get healthcare insurance or pay a financial penalty, depending on their income level. Second, insurers participating in the new national healthcare exchange would be forbidden from excluding or discriminating against consumers on the basis of their health, age, race or geography.
Third, those without insurance – a number that rose by almost one million to a shade above 46 million between 2007 and 2008 – would be heavily subsidised to get it, the level of subsidy varying with the income of the individual. Small businesses would also receive tax credits to help them pay for their employees.
Fourth, Mr Obama would pay for these measures by cuts in payments to medical providers in the Medicare programme for retirees as well as imposing a fee on the most expensive – or “Cadillac” – plans offered by insurers.
However, these so-called “pay-fors” only cover roughly half of the $900 billion in costs Mr Obama laid out. The White House has yet to provide details of how it would fund the remainder of the subsidies – essential if it wants to win over fiscal conservatives in the Democratic party. – Copyright The Financial Times Limited 2009