Pat Dollard

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Politico:

The Obama administration will announce a 10-year, $634 billion reserve fund aimed at expanding health care coverage, an administration source said Wednesday.

The investment, to be rolled out as part of Obama’s budget request on Thursday, is being billed as a down-payment on covering all Americans.

“The goal is still to bring down the cost of care and to get universal coverage,” the source said.

According to the plan, the $634 billion will be paid for by limiting tax breaks for the wealthy and by squeezing new savings and efficiencies from pre-existing government health care programs.

Itemized deductions for the highest taxpayers will be frozen, paying for about half the cost of the plan. The other half will be drawn from an array of changes to Medicare and Medicaid, including expanding competitive bidding and the use of more generic drugs to bring down costs.

OMB chief Peter Orszag is to announce the plan while outlining Obama’s budget in a press conference Thursday.

Obama previewed his broader plans for health care in his address to Congress Tuesday night, saying his budget contained “a historic commitment to comprehensive health care reform — a down payment on the principle that we must have quality, affordable health care for every American.”

But health care advocates are watching closely just how many people Obama thinks he can cover, and how quickly.

Obama has generally shied away from talk of “universal health care” and the $634 billion is not being billed as an achievement of that goal but a big step in that direction. About 47 million Americans don’t have health insurance.

The budget fund also fulfills a goal first outlined by Orszag – to use fixes to Medicare reimbursement rates as a way to begin the process of health reform. Because those reimbursement rates are used to set treatment regimens at hospitals nationwide, Orszag reasoned, changing them would be a way to change the very delivery of health care across the nation.

But those reimbursement rates is politically sensitive and closely watched, particularly in big states like New York, where they are the lifeblood of public hospitals. Hospital advocates, too, are watching to make sure Obama’s changes don’t drain funding from their facilities.