Obama goes big on healthcare in final budget wish list

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The Obama administration is resurfacing its boldest healthcare proposals in its final budget wish list, which may mark its last chance to strengthen the Affordable Care Act.

The $4.1 trillion budget proposal — his most expensive to date — includes new ideas like enticing states to expand Medicaid and requiring drug companies to publicly disclose the costs of their research and development.

It also tries to settle a remaining dispute within the healthcare law about the scope of the "Cadillac tax." The administration proposed scaling back that tax by raising its threshold in areas where healthcare is more costly so that fewer people would be hit by the 40 percent excise tax.

President Obama also laid out an “aggressive reform agenda” to change the way the nation pays its doctors and hospitals, which it says will save more than $180 billion over 10 years.

While many of the health-related proposals are longtime Democratic priorities, the budget also includes two of the president’s biggest proposals that are likely to receive bipartisan support. The spending blueprint includes $1.5 billion to tackle the nation’s opioid epidemic and $500 million in new programs to help people with mental illnesses.

Structural changes to the delivery system — though many are vague in details — are also intended to “improve the financial stability of the Medicare program,” the administration said.

The savings to Medicare and Medicaid are key to financing the president’s budget plan, which stays under the discretionary caps for 2017 spending that was outlined in last year’s budget deal with Congress.

Lowering the eligibility for Medicaid has been a major goal for the administration, although 19 states have still refused to do so despite the promise of big federal investments. Under the proposal, the federal government would cover the full cost of expansion for three years, even if a state misses the initial deadline under the 2010 healthcare law.

Obama also proposed lowering the number of years that companies have a monopoly over biologic drugs from 12 years to seven and blocking companies from striking “anti-competitive” deals to restrict access to generics. Those proposals, along with the new data from the drug companies, would save $21 billion over a decade, officials said.

The budget would also allow Medicaid providers to negotiate for high-cost drugs, while opening up competitive bidding for medical equipment. In an effort to reduce overhead spending in Medicaid, the program would be required to adapt a medical loss ratio of 85 percent, meaning 85 percent of premium dollars be spent on medical care — the same rate as private health insurers.

About $3.4 billion in savings would come from eliminating waste and abuse, another repeated aim of the administration.