America Ball Land: Democrats unveil US healthcare reform plan

Democrats, backed by Obama, propose plan to tax the wealthy to pay for expansion of government-run healthcare

Democrats in the US congress plan to sting wealthy Americans with a massive tax increase in order to fund a broad expansion of government-provided healthcare, facing powerful opposition from Republicans and the healthcare industry who warn of a costly government takeover of the health system.

Leading Democrats, backed by Barack Obama, have unveiled a plan that would tax the richest 2 million Americans to fund a $1tn effort to provide healthcare to most of the 46 million Americans who now lack health insurance.

The plan would impose a surtax of as much as 5.4% on families earning $350,000 (�213,000) a year and individuals making more than $280,000. The plan's backers hope it will extend coverage to 37 million through subsidies and government health insurance coverage.

"The status quo on health care is not an option for the United States of America," Obama told a group of nurses today. "It is threatening the financial stability of our families, our businesses, and government itself. It is unsustainable."

Broad agreement exists across the political spectrum that the US healthcare system is in a wretched state. With no universal public programme akin to Britain's National Health Service, Americans rely on a patchwork of employee-provided healthcare, government programmes for the poor, elderly and veterans, and costly private health insurance coverage. Americans spend one out of every six dollars on healthcare - roughly twice as much per capita as other industrialised nations - but lag behind in life expectancy, infant mortality and other health indicators.

"There's not anybody in America that's an adult that doesn't have some horror story about somebody that lost their lives, lost their home, lost their jobs, lost their insurance," New York congressman Charles Rangel, a senior Democrat, said.

An overhaul of the US healthcare system was one of Obama's top campaign promises. US presidents since Harry Truman following the second world war have attempted to revamp the system but have faced entrenched opposition from powerful hospital and doctors' groups and insurance companies.

Bill and Hillary Clinton's effort in the early 1990s failed amid an insurance industry advert campaign that warned the government would take over health decisions from doctors and patients.

Key to Obama's proposed reform is a health plan provided by the government that would be available to all Americans on a sliding fee scale.

Opponents, including some within Obama's own Democratic party, say that would harm the lucrative market for private health insurance. Another provision would reshape the private market by creating a clearinghouse for health insurance products. The entire programme is expected to cost more than $1tn over ten years. Obama hopes to have legislation finalised by August.

"If you lose your job, change your job, or start a new business, you'll still be able to find quality health insurance you can afford," Obama said. "If you have a pre-existing medical condition, no insurance company will be able to deny you coverage. You won't have to worry about being priced out of the market. You won't have to worry about one illness leading your family into financial ruin."

Opponents have rallied against Obama's proposals, warning of rationed care, long waits for treatment, bureaucratic meddling in the doctor-patient relationship, and massive government borrowing to pay for it all.