By John Whitesides and Patricia Zengerle
WASHINGTON (Reuters) - President Barack Obama tried to rejuvenate his stalled U.S. healthcare overhaul on Monday with a plan to make insurance coverage more affordable and to bolster government authority to regulate premium hikes.
Obama will push the proposal at a bipartisan White House healthcare summit on Thursday in a last-ditch bid to break an impasse in the U.S. Congress and rally support for a sweeping overhaul that would tighten regulations on insurers and expand coverage to tens of millions of Americans.
"We view this as the opening bid for the health meeting," said Dan Pfeiffer, White House communications director. "Hopefully this will move the process forward."
Republicans condemned the Democratic president's plan as a warmed-over version of the unpopular healthcare bills passed by the Democratic-controlled Senate and House of Representatives last year, and they renewed their calls to scrap the plans.
Republicans said the proposal was a bad sign for Thursday's summit.
"This week's summit clearly has all the makings of a Democratic infomercial for continuing on a partisan course that relies on more backroom deals and parliamentary tricks," House Republican leader John Boehner said.
The White House said Obama's plan would make it easier to bypass Republicans if necessary and ram legislation through in a process requiring a simple majority in the 100-member Senate rather than the 60 votes needed to clear procedural hurdles.
Pfeiffer said no decision has been made on whether to follow that route in getting a final bill through Congress, but the president believed "people deserve an up-or-down vote on health reform."
"This package is designed to provide us the flexibility to achieve that if the Republican Party decides to filibuster," he told reporters, referring to a procedural tactic used to thwart legislation.
The need for 60 votes in the Senate to break a filibuster has stymied Obama's healthcare reform efforts up to now.
Health insurer stocks shrugged off the news after an initial wobble, with the Morgan Stanley Healthcare Payor index up 1.4 percent in mid-morning trade, buoyed by a better-than-expected announcement late on Friday on 2011 Medicare payment rates.
Nevertheless, insurers have underperformed the broad market this month after the Obama administration seized on premium increases by WellPoint Inc's Anthem Blue Cross unit in California to ratchet up attacks on the industry.
Wellpoint is one of three top insurers along with Aetna and UnitedHealth.
PRICE TAG GOES UP
The new proposal, based on the Senate bill, would cost $950 billion over 10 years -- up from the Senate bill's $871 billion (563 billion pound) price tag -- and reduce the deficit by about $100 billion over the same period, White House officials estimated.
The plan offered several changes to the Senate bill to attract support from wavering Democrats but did not incorporate Republican ideas to limit medical malpractice lawsuits, an item of major emphasis for Republicans.
Obama's revised plan would expand tax credits for middle-class workers to make insurance more affordable, and would extend taxes for Medicare, the federal health insurance program for the elderly and disabled, to unearned income.
It provides U.S. government authority to block insurance premium hikes.
It also eliminates a controversial Senate deal exempting the state of Nebraska from paying for Medicaid expansion costs, closes a "doughnut hole" gap in prescription drug coverage, and incorporates a January deal raising the income threshold for a tax on high-cost "Cadillac" health insurance plans.
The proposal provides more tax credits to small businesses than in either the Senate or House bills and provides all states full federal funding for an expansion of Medicaid, the government health insurance program for the poor, for four years, the White House said.
The Obama proposal would close the "doughnut hole" in prescription drug coverage under Medicare by imposing $10 billion more in fees on drugmakers.
Like the Senate bill, the proposal would not include a mandate on employers to offer insurance and would extend coverage to about 31 million uninsured Americans, the White House said.
Congressional leaders have scrambled for a way forward on healthcare since a surprise Republican victory in a special Massachusetts U.S. Senate election cost Democrats their crucial 60th Senate vote and brought to a halt negotiations on merging the two bills passed by the House and Senate.
The most likely option would include a budget process called reconciliation that requires only a simple majority -- 51 votes in the 100-member Senate -- and would bypass Republicans.
It is unclear if Democrats can muster even that many votes on the healthcare bill, with congressional Democrats anxious to turn to jobs issues ahead of November congressional elections in which Republicans may challenge them for control of Congress.
House Speaker Nancy Pelosi said Obama's proposal contained "positive" elements of the House and Senate bills, but she did not offer any hints about the path ahead for Congress. House Democrats will meet on Monday night, with healthcare one of the items on the agenda.
(Additional reporting by Susan Heavey, Donna Smith and Jeff Mason; editing by Simon Denyer and Will Dunham)
