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But No Details Provided Yet.

President Obama released his budget proposal, including broad reforms to the payment systems in health care, as reported by the New York Times, last week (Pear, New York Times, 2/27). The FY2010 proposal includes $2 trillion in mandatory spending, including Medicare and Medicaid (Calmes, New York Times, 2/27).  Mandatory spending for Medicare would total $453 billion, and mandatory spending for Medicaid would total $290 billion (Washington Post, 2/27).

However, the proposal also would decrease spending for Medicare and Medicaid to help finance a reserve fund, included in the plan and intended to help finance and expand health insurance to all residents(Taylor, AP/Kansas City Star, 2/26). Half of the reserve fund would be financed with increased revenue from tax changes and half with reduced spending in health care programs (Levey, Los Angeles Times, 2/27). The proposed reductions in payments to providers are “sure to incite battles with doctors, hospitals, health insurance companies and drug manufacturers,” according to the AP/Detroit Free Press (Crutsinger, AP/Detroit Free Press, 2/26).

The Christian Science Monitor comments that the reserve fund “would represent a huge change in national direction, as it implies that the U.S. will move towards some sort of universal health care system” (Grier, Christian Science Monitor, 2/27).   There will likely be a “battle” over “how to finance Mr. Obama’s national health insurance plan,” which “will significantly expand the cost of government,” the Washington Times reports (Lambro, Washington Times, 2/27).

President Obama plans to release a detailed proposal in April, but the plan likely will not include additional details on health care reform, as he hopes to draft legislation with lawmakers, The Hill reports (Young, The Hill, 2/26).  Obama said, “With this budget, we are making a historic commitment to comprehensive health care reform.  It’s a step that will not only make families healthier and companies more competitive, but over the long term, it will also help us bring down our deficit” (Sanchez, CongressDaily, 2/26).

An opinion piece in the New York Times by David Leonhardt had this to say:  Obama’s plan to “lift the incomes of the middle class and poor through … an overhaul of health care” is “likely to meet stiff opposition from some doctors and insurers.”  He adds that Obama’s budget would begin “paying for investments that would eventually allow Medicare officials to refuse to pay for medical treatment” that is proven to be relatively ineffective, which would “vastly reduce the government’s long-term budget deficit” and likely would “bring down private health costs, since insurers typically follow Medicare’s lead” (Leonhardt, New York Times, 2/27).

NPR‘s All Things Considered on 2/26 provides a 4 minute audio overview here. (Open that link and then click on the Listen Now button just under the title.) Find their complete article on the budget proposal here.

What does it all mean?

No details are yet provided, and President Obama seems to be leaving all the nitty-gritty details to Congress, which appears eager to tackle the issues, albeit with purely partisan lines still being drawn. Since the partisan divide still exists, lobbyists with deep pockets still hold court in Washington, and health care spending occupies one seventh of our economy, President Obama and Congress have their work cut out for them, especially since the President is urging Congress to do all this in one year.

We’ll keep watching and reporting details, which will have to be worked out by Congress. Be sure to signup for the email updates for this blog.