From The Washington Post:
Senate Finance Committee Chairman Max Baucus is urging three Republican colleagues to sign off on the $900 billion health-care reform package they have helped to negotiate over the past two months, in order to add a bipartisan proposal to the mix before President Obama’s speech to Congress on Wednesday.
The Baucus plan, circulating among the Finance Committee’s “Gang of Six” this weekend, sets forth provisions that have already gained the bipartisan group’s unofficial support and adds nothing that the group has not already deliberated, senior Senate aides said. But Democrats are wary that two of the three GOP negotiators — Sens. Charles E. Grassley (Iowa) and Mike Enzi (Wyo.) — could walk away, under pressure from their Republican colleagues to allow Democrats to fight for a bill on their own.
Instead of a government-run insurance option, the Baucus proposal would create a network of nonprofit cooperatives — an alternative that Grassley, the lead Republican negotiator, has backed.
The Baucus proposal also would levy a tax on insurance companies that offer the most expensive insurance plans, a move that would raise around $180 billion over the next 10 years. Negotiators had discussed directly taxing people who receive high-cost plans through their employers — benefits that currently are tax-free — but settled on taxing insurance companies as a more politically palatable alternative.
So insurance companies can pass that expense off to their policyholders. And this helps how?
In either form, the tax is aimed at persuading insurers to stop offering high-cost plans and workers to stop choosing them, a change that economists believe would divert money from the nation’s bloated health-care system and channel it into higher wages for workers. While many Democrats and Republicans in the Senate have endorsed the idea, it remains unpopular in the House, in part because union households are among the beneficiaries of the so-called “Cadillac” health plans. The levy also could violate an Obama campaign pledge not to increase taxes on families earning less than $250,000 a year.
In addition, Baucus would seek to raise a smaller amount by imposing a fee on all health insurance companies according to their market share — a measure intended to extract some sacrifice from an industry that stands to gain 46 million new customers. Baucus proposes a variety of mechanisms to enhance competition and transparency to ensure that the firms do not simply pass the fee through to their customers.
Because corporations are really lousy at finding new loopholes when old ones close.
From The New York Times:
The proposal by Mr. Baucus does not include a public option, or a government-run insurance plan, to compete with private insurers, as many Democrats want.
The White House press secretary, Robert Gibbs, appearing Sunday on the ABC News program “This Week,” said Mr. Obama saw the public plan as “a valuable tool” to promote choice and competition in the insurance market. But he stopped short of saying that the president would veto a bill without it.
People familiar with Mr. Baucus’s plan said it was calculated to appeal to Senator Olympia J. Snowe, Republican of Maine.
Mr. Baucus’s plan, expected to cost $850 billion to $900 billion over 10 years, would tax insurance companies on their most expensive health care policies. The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services.
The separate new fee on insurance companies would help raise money to pay for the plan. The fee would raise $6 billion a year starting in 2010, and it would be allocated among insurance companies according to their market shares.
The fees were first proposed by Senators Charles E. Schumer of New York, John D. Rockefeller IV of West Virginia and Debbie Stabenow of Michigan. Until now, Mr. Baucus had not shown interest in the idea.
Mr. Schumer said, “The health insurance industry should pay its fair share of the cost because it stands to gain over 40 million new consumers under health care reform legislation.”
Mr. Rockefeller said the fees were justified because insurance companies were “rapaciously, greedily and unstoppably making money by underpaying the patient, by underpaying the provider and by overpaying themselves.”
Insurers and many Republicans in Congress oppose the fees, saying they would be passed on to families and employers who buy insurance.
Another section of Mr. Baucus’s proposal would help pay insurance premiums, co-payments and deductibles for people with incomes less than 300 percent of the poverty level ($66,150 for a family of four). It would also provide some protection for people with incomes from 300 percent to 400 percent of the poverty level (up to $88,200 for a family of four), so they would generally not have to pay more than 13 percent of their income in premiums.
Mr. Baucus’s proposal does not include a “trigger mechanism” of the type recommended by Ms. Snowe, who would offer a public insurance plan in any state where fewer than 95 percent of the people had access to affordable coverage.
Senator Ben Nelson, Democrat of Nebraska, expressed support for Ms. Snowe’s idea on Sunday. On the CNN program “State of the Union,” he said Mr. Obama ought to say that “if there’s going to be a public option, it has to be subject to a trigger.”
Coverage under Mr. Baucus’s plan would, by some measures, be less extensive than the least generous of three levels envisioned in a bill approved by three House committees.
To compare health plans, experts often focus on the percentage of medical expenses paid by insurance, on average, for a given population. This figure ranges from 70 percent to 95 percent under the House bill’s options, but it would be less than 70 percent under Mr. Baucus’s proposal.
Mr. Baucus would impose limits on out-of-pocket medical costs — the co-payments, deductibles and similar charges for covered items and services. The limits would be $11,900 a year for a family and $5,950 for an individual. The comparable numbers in the House bill are $10,000 and $5,000.