WASHINGTON – President Obama signaled his determination to forge ahead with a Democratic vision of comprehensive health care reform Monday, unveiling an ambitious proposal that would extend coverage to 31 million people, raise taxes on the wealthy and ratchet up regulations on insurers.

The proposal is a carefully calibrated attempt to relaunch a nearly year-long effort that has stalled: trying to combine the separate bills that narrowly passed the House and Senate into a final version that could pass muster in both chambers.

Like the Senate and House bills, the proposal would require almost everyone to obtain insurance or pay a fine; provide income-based subsidies to those who cannot afford it; expand Medicaid for the working poor; and impose new requirements on insurers who sell policies in a new ”exchange,” or marketplace, where those without employer-based benefits could buy coverage.

The president’s proposal takes the more modest Senate bill as his basic framework, but in what is perhaps his proposal’s most notable feature, he scales back the Senate bill’s main revenue source, a tax on high-cost insurance that he has strongly supported. Instead, he would impose a new tax on the unearned income of the wealthy.

He would expand subsidies to help working-class and middle-class families afford coverage. And in a bid at overcoming some of the bill’s strongest skeptics — seniors and state officials — he would expand the Medicare drug benefit for seniors and Medicaid assistance for budget-strapped states.

There is no independent cost estimate yet, but the proposal’s additions drive its price tag higher than the Senate’s $871 billion bill. White House health care czar Nancy-Ann DeParle estimated the increase at $75 billion over 10 years, which she said would be offset by bigger cuts in subsidies for private insurers who offer Medicare Advantage plans and by higher fees on drug companies, among other sources. By reining in Medicare, the proposal would still reduce the deficit by $100 billion over 10 years, the White House said. The proposal arrives in advance of Obama’s bipartisan health care summit on Thursday. But his formal adoption of an approach so aligned with the efforts of congressional Democrats acknowledges that the health care overhaul will draw little to no Republican support and that the main challenge lies in retaining the support of Democratic lawmakers.

”It doesn’t strike you as a scaled-down thing that’s not supposed to have enemies,” said John Holahan of the Urban Institute, who is a proponent of comprehensive legislation. ”They just went all out.”

Because of the Democrats’ loss of their 60th Senate seat, the overhaul’s likeliest route is for the House to pass the Senate bill with the understanding that the Senate would pass agreed revisions using a maneuver that requires only 51 votes. But for that to work, House Speaker Nancy Pelosi would need to retain the Democrats who voted for the House bill, as well as replace those who are opposed to the abortion language in the Senate bill.

The imperative of corraling House Democrats is apparent in the president’s decision to scale back the tax on high-cost insurance plans. The White House had championed the so-called ”Cadillac tax” as a cost-containment tool, but House Democrats and labor unions had opposed it, arguing that it would hit middle-class families and be an easy political target for Republicans. Instead, the House bill raised income taxes on couples earning $1 million.

Obama’s proposal makes up the revenue by extending the Medicare tax so that it applies, at a 2.9 percent rate, to wealthy taxpayers’ income from sources other than wages, such as interest and dividends. Reducing the tax on high-cost plans ”is going to make it much easier to pass the bill in the House a second time,” said Ron Pollack, president of Families USA, which advocates for universal health care.

The proposal adopts, with tweaks, the Senate’s more lenient approach to fining large employers who do not provide coverage. It slightly increases the penalty for people without coverage. It does not include a ”public option,” the government-run insurance plan included in the House bill that people could buy instead of private plans.

White House officials touted as the proposal’s signature addition a new nationwide authority to review insurance rate increases, which is intended to prevent big rate hikes such as the 39 percent increase that Anthem Blue Cross of California is seeking for many individual policies, and the 23 percent increase sought by Anthem in Maine.

Karen Ignagni, president of America’s Health Insurance Plans, said the White House’s focus on insurance rates instead of the underlying prices of doctors, hospitals and drug manufacturers is akin to saying ”we can only look at what the price of the car is at the dealer’s lot,” without considering the price of steel and other materials. ”It doesn’t make a whole lot of sense,” she said.

The proposal jettisons the special deal on Medicaid costs that Sen. Ben Nelson, D-Neb., secured for his state. Instead, it seeks to address cash-strapped states’ concerns about the cost of expanding Medicaid by increasing the federal share of covering newly eligible people, to 100 percent of the cost for the first four years, 95 percent for the next two, and 90 percent after 2020.

Those who have been following the debate for the past year said the overhaul’s prospects may depend more now on the White House’s ability to rebuild momentum and nail down key votes in Congress rather than on the new proposal’s details.

”At this point, if policy mattered, it would,” said John Rother, AARP’s executive vice president for policy and strategy. ”The question is, does policy matter or has this become completely political? We’ll see.”


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