Obama appears open to some health insurance mandates

With lawmakers poised to begin a major push to reshape the nation’s healthcare system, President Obama on Wednesday signaled new openness to the idea of the government requiring that most Americans get medical insurance -- a position likely to increase momentum behind the drive to create a coverage mandate.

At the same time, the president, who rejected such a mandate during the 2008 campaign, reaffirmed in strong terms his determination to offer a government-run healthcare plan as an alternative to private insurance.

“I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans,” Obama said in a two-page letter to Sens. Edward M. Kennedy (D-Mass.) and Max Baucus (D-Mont.), who are leading efforts to develop healthcare legislation. “This will give them a better range of choices, make the healthcare market more competitive and keep insurance companies honest.”

Obama also indicated that he was receptive to a new requirement that large businesses share in the cost of providing health insurance. And he called for at least $200 billion more in cuts to the federal Medicare and Medicaid insurance programs for senior citizens and poor families to pay for expanded coverage. This would be on top of the $300 billion in cuts requested earlier.

The letter, released a day after the president met with two dozen Senate Democrats at the White House to talk about healthcare, came as the White House intensified its effort to build momentum for a major healthcare overhaul this year. Obama has asked Congress to send him a bill by October.

Kennedy and Baucus plan to introduce major healthcare bills over the next several weeks, as do senior House Democrats. At the same time, many Republicans are stepping up their criticism of the initiative, which they assert will increase government control of medicine.

Obama and his chief lieutenants have emphasized the need to control costs in reaction to widespread public anxiety about rising healthcare bills -- as well as concerns among experts about the nation’s skyrocketing healthcare tab, which this year will top $2.2 trillion.

“I want to stress that reform cannot mean focusing on expanded coverage alone,” Obama wrote. “Indeed, without a serious, sustained effort to reduce the growth rate of healthcare costs, affordable healthcare coverage will remain out of reach.”

Though Obama has made a healthcare overhaul one of his top priorities, he has thus far largely avoided staking out firm positions on some of the most contentious issues, endorsing broader goals while letting senior Democrats write the specifics on Capitol Hill.

The coverage mandates, described sometimes as “shared responsibility,” and the so-called public plan have been among the more controversial concepts in the emerging debate.

In his letter, the president left room for compromise on the mandates, suggesting exemptions for people who cannot afford insurance and for small businesses.

At least one GOP lawmaker praised the president’s approach.

“Having the president engaged in the legislative debate with yesterday’s meeting and today’s letter, which doesn’t draw lines in the sand, is helpful because of his statements that reform legislation needs to have bipartisan support,” said Iowa Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee.

But Obama’s letter, which came as lawmakers are finalizing their healthcare bills, represented a direct challenge to business groups long wary of requirements that they provide insurance or pay some kind of fee to help the government finance wider coverage.

A spokeswoman for the U.S. Chamber of Commerce called the mandate a “job killer.” Even some small businesses are wary of mandates with exemptions, out of concern that the exemptions could be adjusted in the future.

Insurance companies, which have embraced a new mandate, vigorously oppose the proposed government insurance program.

The president also waded further into the potentially explosive debate over how to pay for an overhaul that is expected to cost more than $1 trillion over the next decade.

Obama pledged to work with Congress to cut $200 billion to $300 billion from the Medicare and Medicaid insurance programs over the next 10 years.

That would come on top of the $634 billion that the president proposed in his budget to pay for the healthcare overhaul.

About half of that came from changes in Medicare, including cuts to private insurers who contract with the government to provide insurance to seniors. The rest would come from reducing the amount that the wealthiest Americans could deduct on their taxes for charitable donations, state taxes or interest payments on a home.

That proposal has run into stiff opposition from Democrats as well as Republicans, but administration officials have not given up on it. And Obama signaled his intent to keep it on the table as legislative debate proceeds.

The president also suggested empowering a federal commission under the Department of Health and Human Services to make further cuts in Medicare spending with less interference from Congress.

The recommendations of the Medicare Payment Advisory Commission, which proposes reimbursement rates for hospitals and doctors, are subject to changes by Congress, a highly politicized process long decried by healthcare policy experts.

Under Obama’s proposal, Congress would only be able to stop the cuts by passing a joint resolution in a process akin to how the federal government handled the politically sensitive closure of military bases around the country.

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noam.levey@latimes.com