How would Obama’s proposed spending ‘trigger’ work?
In his healthcare address Wednesday night, President Obama proposed a new element in his overhaul plan -- the creation of a so-called trigger to prevent higher medical costs from pushing the budget deficit higher.
Here is what he is proposing:
--
How would the spending “trigger” work?
In broad terms, it would force cutbacks in government outlays if healthcare spending began to get out of control. Specifically, the trigger -- also referred to as a fail-safe -- would kick in if savings that Obama says his plan would create somehow failed to materialize.
Proponents of the healthcare overhaul are counting on those projected savings to play a big role in financing the extension of insurance coverage to more Americans. The White House maintains that making the system more efficient and productive could save hundreds of billions of dollars.
Republicans -- as well as some moderate and conservative Democrats -- have expressed concern that if Congress approves the broad overhaul and it fails to yield the promised savings, neither the president nor Congress would step in and prevent the deficit from soaring.
--
Would the trigger be automatic?
Not necessarily. A special board could be created to decide when to invoke it.
--
Would the trigger apply to all healthcare spending?
No. The idea is to apply it to Medicare’s payments to doctors and others who provide services to the elderly. Reimbursing them accounts for a major chunk of federal healthcare spending, and readjusting the payment schedule could be relatively simple.
Under Obama’s proposal, providers who failed to make sufficient progress in controlling costs would see their Medicare payments reduced.
--
Is this the same trigger that would automatically launch a government-run health insurance plan?
No, that is a different concept being floated by Sen. Olympia J. Snowe (R-Maine). Under Snowe’s proposal, a government-run insurance option would kick in if it were determined that private insurers in a particular region had failed to revamp their policies to provide more people with affordable coverage.
Snowe’s trigger is viewed as a possible legislative compromise that would allow a public insurance option, but only under certain conditions.
--
Get the L.A. Times Politics newsletter
Deeply reported insights into legislation, politics and policy from Sacramento, Washington and beyond. In your inbox three times per week.
You may occasionally receive promotional content from the Los Angeles Times.
