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Medical Groups to Announce Health Care Cost Cuts

WASHINGTON - President Obama will announce today that the health care industry will try to cut $2 trillion in expenses over the next decade to slow the rising cost of medical care, two White House officials familiar with the plan said.

If successful, the cuts could help reduce costs for families and provide money for an expansion of health care coverage backed by Obama and some Democrats in Congress, said the officials, who briefed reporters but refused to be identified ahead of Obama's announcement.

"If these savings are truly achieved, this may be the most significant development on the path to health care reform," said Ron Pollack, executive director of Families USA, which advocates for expanded health care coverage. "It would cut health costs for families and businesses, and it would enable adequate subsidies to be offered so that everyone has access to quality affordable health care."

Six medical trade groups, including the American Medical Association and America's Health Insurance Plans, which represents health insurance companies, have agreed to the cost-cutting, which could save the average family of four $2,500 in 2015, according to the sources. Health care costs would continue to rise, just not as quickly.

"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control," Obama will say, according to excerpts of his speech released by the White House. "That is why these groups are voluntarily coming together to make an unprecedented commitment."

Some believe the groups are making these concessions in exchange for a private deal with the Obama administration in which plans for a nationalized health care system will be taken off the table. 

White House officials offered few specifics about how the cuts would be achieved or how the promise to slow the rate of cost increases would be enforced.

Democratic lawmakers are developing a plan to expand coverage to more of the 46 million people the Census Bureau estimates are uninsured. A major obstacle to that effort is the rising cost of health care, which has grown to $2.2 trillion a year, according to the Congressional Research Service.

Karen Ignagni, president of America's Health Insurance Plans, suggested a similar idea in congressional testimony in March.

"Cost savings of this magnitude could go a long way toward ensuring that every American has access to affordable, quality coverage," Ignagni said. "These savings could help finance part of the costs of providing coverage to the uninsured."

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