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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

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And I'm Michele Norris.

The budget unveiled by the president today is his opening bid on overhauling the nation's health system, $634 billion, to be precise. While details on the proposal are few, it's having its planned effect - kicking the healthcare conversation into high gear.

NPR's Julie Rovner reports.

JULIE ROVNER: In his brief remarks on the budget this morning, President Obama continued this week's theme of tying healthcare to his overall goal of fixing the nation's economy.

President BARACK OBAMA: It's a step that will not only make families healthier and companies more competitive, but over the long term it will also help us bring down our deficit.

ROVNER: The budget lays out eight separate principles for congress to follow in crafting a healthcare bill, for making health coverage affordable, to guaranteeing patient a choice of insurance plans, to putting the nation on, quote, "a clear path to cover all Americans."

Chip Kahn helped sync President Clinton's health plan 15 years ago. As president of the Federation of American Hospitals, he's now working for a health overhaul. He says the Obama administration's minimalist approach is likely to be more successful than the Clinton strategy, which involved spending months writing an entire bill.

Mr. CHIP KAHN (President, Federation of American Hospitals): I think here the administration is really approaching this issue in the right way with principals, with an outline that can be used in the budget processing congress from the get-go this year.

ROVNER: Even more important, say observers, is that the president is putting money where his plan is. The $634 billion over 10 years may not be enough to pay for the entire program, says Dan Mendelson, who is a top health budget official in the Clinton administration, but it shows how serious the new administration is about healthcare as a priority.

Mr. DAN MENDELSON (Former Clinton Administration Health Budget Official): This is an iron-clad commitment to pursue everything that they promised to pursue during the campaign. And so what they're doing is they're saying, this is what we're going to do and this is how we're going to pay for it.

ROVNER: But how they're paying for it is already proving controversial. One of the biggest chunks of money would come from cutting payments to private managed care plans that serve Medicare beneficiaries. That wouldn't be fair to seniors, says Karen Ignagni, who represents the insurance industry.

Ms. KAREN IGNAGNI (America's Health Insurance Plans President and CEO): The beneficiaries in the program are being asked to shoulder virtually 30 percent of the cost of healthcare reform.

ROVNER: And more than half the money would come from limiting tax deductions for families earning more than $250,000. Conservative health policy analyst John Goodman says that's a mistake.

Dr. JOHN GOODMAN (National Center for Policy Analysis President): While he's sticking with what he promised during the campaign and that is to pay for healthcare reform by taxing the rich - but what that really means is paying for healthcare consumption by taxing capital.

ROVNER: And without capital to create new jobs, you won't get the economy out of its tailspin, Goodman says. But not everyone in healthcare is unhappy with the budget. The nation's doctors, for example, are thrilled President Obama's budget doesn't assume a scheduled 21 percent cut in doctors' Medicare payments for next year.

Ms. NANCY NIELSEN (American Medical Association President): Because he knew, and congress knows and physicians know that that can't possibly happen. So, it does not assume that cut. And that's the biggest part of this budget that we're pleased about.

ROVNER: That's Nancy Nielsen, president of the AMA. But one thing that's very different is that even groups that are unhappy about some of the details remain optimistic about the health overhaul effort. Again, Karen Ignagni of the health insurers.

Ms. IGNAGNI: It feels very different this year than it did, certainly, 15 years ago. Groups are spending a great deal of time trying to get to yes and working out details of how versus coalitions that basically forestall or prevent reform.

ROVNER: On the other hand, the real deal-making hasn't even begun yet.

Julie Rovner, NPR News, Washington.

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