Obama Embraces Health Care Cost-Cutting Commission (With Teeth)

Finally, some specifics. President Obama wants health care form to be revenue neutral and today endorsed a Congressional proposal to strengthen an independent government-cost cutting commission. In a letter to the two senators who are crafting health care reform bills, Obama said was "open" to giving the Medicare Payment Advisory Commission the power to recommend cost reductions unless Congress overrides the particular rulings. 2009healthcare ltr rel (2).pdf

In the letter, Obama acknowledged  that the costs of health care reform would need to be offset by up to $300 billion more than has already been budgeted, and he said he would consider "appropriate proposals to generate additional revenues."  That's code for, among other things, a tax on health care benefits for individuals making more than $250,000 a year, an idea Obama opposed in the primary when Sen. John McCain made it a centerpiece of the Republican health care platform.   

Obama also used the letter to reiterate his support for  a "public health insurance option" that would "keep the insurance companies honest" and "make the health care market more competitive."  The White House isn't saying whether that plan ought to be big -- in which case it would require more funding -- or small, meaning that it would pay for itself and not crowd out private insurance plans. 

Both the Baucus and Kennedy proposals would create health insurance markets featuring a variety of proposals and would provide subsidizes to those who needed money. Kennedy wants a robust public plan; Baucus is struggling with Republicans over its size and scope.

On MedPac, Obama noted that the commission "is similar to a process that has been used effectively by a commission charged with closing military bases, and could be a valuable tool to help achieve health care reform in a fiscally responsible way."