Feb. 23 (Bloomberg) -- With the economic stimulus package signed, President Barack Obama this week will outline how he plans to provide affordable medical coverage for all Americans, an administration official said.

Obama tomorrow will tell a joint meeting of the House and Senate that revamping the U.S. health system is a priority, according to the official, who spoke on condition of anonymity. The president will outline how he plans to pay for it when he submits his budget to Congress on Feb. 26, the official said in a telephone interview yesterday.

The president’s readiness to move the week after he signed a $787 billion stimulus measure shows how important health care is to economic growth, said Senator Ron Wyden, an Oregon Democrat. It also is a sign Obama hasn’t been sidetracked by the delay in naming a Health and Human Services secretary, said Len Nichols, a former Clinton administration official.

Obama’s budget “will help set the table for health reform,” said Wyden, a member of the Senate Finance Committee, which oversees U.S. government health programs.

One American in seven lacks health insurance, according to the Census Bureau. For those with coverage, the price rose an average of 5 percent last year, the Henry J. Kaiser Family Foundation in Menlo Park, California, reported in September. Obama said during his campaign that covering everyone might cost at least $65 billion a year.

By proposing how to pay for health changes in his budget plan, Obama is showing that he is committed to providing the necessary money, said Nichols, now head of the health policy center at the New America Foundation in Washington, in a telephone interview.

‘Can’t be Put Off’

“This is a president who knows that fixing health care can’t be put off any longer,” Wyden said in a telephone interview.

Obama’s first HHS nominee, former Senator Thomas A. Daschle, pulled out amid questions about his taxes, and no one else has been named. Kansas Governor Kathleen Sebelius is a leading contender for the job, an administration official, who spoke on condition of anonymity, said last week.

Obama campaigned on a promise to expand government health programs and give people subsidies to help them afford coverage. He also proposed creating a public plan to compete with private health insurers and taking steps, such as putting more health records in digital form, to help reduce costs.

The president may look to reduce payments to private Medicare Advantage plans to help pay for health-care changes, the administration official who spoke yesterday said.

$15 Billion in Cuts

Obama said during his campaign that he wanted to cut $15 billion in government payments to the plans, which private insurers such as UnitedHealth Group Inc., of Minnetonka, Minnesota, offer to seniors in place of the government’s Medicare insurance program for the elderly.

David Sloane, a lobbyist with AARP, the advocacy group for older people, said determining how to pay to get everyone covered is critical.

“Given all other spending priorities and economic peril, there’s a lot of uncertainty whether they can find savings elsewhere to offset this,” Sloane said in a telephone interview on Feb. 19.

Obama’s plans were boosted in the stimulus package, which he signed Feb. 17. The measure allocates $20 billion to encourage adoption of computerized records and gives $1 billion to research the comparative effectiveness of medical treatments. Both may save money later on, according to the Congressional Budget Office, an arm of Congress.

Bush’s Footsteps

President George W. Bush successfully used his budget to push a new health program. He devoted two sentences in his fiscal year 2002 budget proposal to create a program to subsidize prescription drug coverage for people in Medicare, the U.S. health insurance plan for the elderly and disabled. Congress approved it in 2003.

Obama’s plan isn’t expected to reach the level of detail that then-President Bill Clinton had in his 1,300-plus page health plan that he presented to Congress in 1993.

This is a good thing, said Sara Rosenbaum, who worked on Clinton’s failed health-care plan. Clinton tried to dictate to Congress.

“The point is to get the ball rolling and that’s where the president is needed,” said Rosenbaum, chair of the health policy department at George Washington University in Washington, said in a telephone interview on Feb. 19. “People don’t want to act until they have broad outline.”

Senator Edward M. Kennedy, chairman of the Health, Education, Labor, and Pensions Committee, and Senator Max Baucus, chairman of the Finance Committee, have been working on legislation to overhaul the health system.

To contact the reporter on this story: Aliza Marcus in Washington at amarcus8@bloomberg.net

Last Updated: February 23, 2009 00:00 EST