White House defends costs

White House defends costs, cuts in health bill
CHARLES BABINGTON Associated Press

The Obama administration pushed back Wednesday against claims that it's not doing enough to slow the growth of health care costs, a topic senators will debate heavily in coming weeks.

White House budget director Peter Orszag cited economists and analysts who say a pending Senate bill would take several steps in that direction. And Orszag left no doubt that the administration supports a provision disliked by many House Democrats, union activists and others: a new tax on generous health insurance plans offered by employers.

A rival health care bill passed by the House would, instead, place a new surtax on millionaires' incomes. Lawmakers must resolve such differences if Congress is to send a bill to President Barack Obama's desk.

Republicans kept up their criticisms Wednesday, saying the Senate bill would reduce the federal deficit only by raising taxes and cutting Medicare.

The goal is to drive down health care costs, not increase them along with taxes, Senate Minority Leader Mitch McConnell, R-Ky., said.

"That's not reform," McConnell said.

In a conference call with reporters, Orszag said such critics are overlooking key provisions in the Senate bill. He cited a recent letter from 23 prominent economists praising four main features:

_ Making the federal deficit level or lower over 10 years.

_ Taxing high-cost, employer-provided insurance plans, which are blamed for overuse of medical care.

_ Creating a commission to recommend ways to control Medicare costs.

_ Taking preliminary steps to encourage more efficient ways to deliver health care.

The Senate bill "includes these four pillars," Orszag said.

Previous efforts by Congress to rein in health care costs have done little. For instance, vows to trim Medicare reimbursements to doctors are routinely overturned.

The same has been true for efforts to stop what many consider government overpayments to Medicare Advantage, a privately administered program.

But "it's going to happen this year," said Obama health adviser Nancy-Ann DeParle, who also was on the conference call.

The nonpartisan Congressional Budget Office says the Senate bill would reduce deficits by $130 billion over the next decade. It would do so partly by raising various taxes and by reducing federal spending on Medicare, Medicaid and other programs by $491 billion over 10 years.

Republicans say such details are lost on many Americans, who might be led to believe the pending legislation would actually reduce overall spending on health care.

"All the Democrats' health care bills will increase costs, slash Medicare and raise taxes," said Antonia Ferrier, spokeswoman for House Republican leader John Boehner of Ohio.

Karen Ignagni, president of America's Health Insurance Plans, also criticized the Democratic proposals. She said the Senate bill would increase costs "by encouraging people to wait until they get sick to get insurance, adding new taxes on health care coverage and failing to include systemwide cost-containment provisions."

Ralph G. Neas, head of the Washington-based National Coalition on Health Care, which comprises unions, business groups, patient groups and others, called the House and Senate bills a good start. But Neas urged lawmakers to toughen the bills by including "a strong fail-safe provision" to ensure that segments of the health industry deliver cost savings they have promised.