Baucus Plans Last Attempt At Bipartisan Bill, Dems Acknowledge Moderates' Key Role

Main Category: Health Insurance / Medical Insurance
Article Date: 15 Sep 2009 - 4:00 PDT

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This week is crucial for Sen. Max Baucus, who is trying to win bipartisan support from his Senate Finance Committee negotiators. If not, he is likely to join a Democrat-only effort to reform the health care system.

Baucus "has promised a formal proposal within days and plans to convene a bill-drafting session the week of Sept. 21," The Associated Press reports. The plan "is important for two reasons: It's the only proposal that's been worked out in close consultation with Republicans, and it also seems to be headed in the general direction Obama wants to take." The plan is "widely seen as making major concessions to industry. There's no government insurance plan to compete with private carriers, and no requirement on employers to provide coverage - as legislation drafted by House Democrats would provide. In another significant break with House Democrats, Baucus wouldn't raise taxes on upper-income earners to pay for health care."

But there is still "plenty to argue about in the fine print." The plan would help middle-class Americans pay for health insurance by providing tax credits to millions who purchase their own plan. "But Sen. Jay Rockefeller, D-W.Va., says the way eligibility for the tax credits is being computed might result in a meager benefit that leaves many consumers with insurance sticker-shock" and "says the tax credits should be based on an individual's total medical costs, including premiums and out-of-pocket expenses."

Employers are also concerned. Although they won't be required to offer insurance, "an employer will be charged a $400 fee if their workers receive a tax credit from the government to purchase coverage." But "[e]ven if just one employee gets help, the fee would be multiplied by the total number of employees at the firm," which advocates for the poor say could "discourage some companies from hiring low-income workers." Insurers worry about an additional fee, and "[d]octors are upset Baucus has not given them as much relief from scheduled Medicare fee cuts as have Democrats in the House" (Alonso-Zaldivar and Fram, 9/14).

Meanwhile, Bloomberg reports: "While Baucus said President Barack Obama's Sept. 9 speech to Congress 'breathed new life' into negotiations for a bipartisan compromise, the Montana Democrat vowed to present draft legislation with or without Republican votes, after struggling for months to reach a deal. … One sticking point for Baucus's group is how an expansion of the Medicaid program for the poor affects state governments, which would pick up a portion of the costs. Baucus wants to extend Medicaid coverage to those with incomes 133 percent above the poverty level. That's worried governors, some of whom will speak to committee members today, said Senator Kent Conrad, a North Dakota Democrat who's in the negotiating group."

Baucus' Finance panel negotiators "may go further than Obama" in attempting changes to medical malpractice law - "an effort designed to make an overhaul appeal more to Republicans. There is consensus to include 'safe harbor' legal protection for doctors who can show they comply with 'best practices,' and expanded use of arbitration to end disputes between patients and practitioners, Conrad said on Sept. 10" (Jensen and Litvan, 9/14).

Moderates are key to any bill's passage, Roll Call reports: "The president's apparent flexibility on the public insurance option does appear to have assuaged some centrist Democratic Senators on a key issue. But these Democrats remain resistant - particularly over the price tag, including how much reform will cost the government and what it will cost taxpayers. … Most moderate Democrats appear to have responded positively to Obama's speech, his latest move to recast the health care debate. They share his general philosophy of wanting to improve health care delivery, increase access to care and lower insurance premiums, which have risen sharply in recent years and are projected to continue in that direction." However, moderates are seriously considering the politics of any vote on health care reform legislation, particularly those "running for re-election next year in conservative-leaning states" (Drucker and Pierce, 9/14).

Sen. Mary Landrieu, of Louisiana, is in effect representing 15 centrist Senate Democrats and independent Sen. Joseph Liberman, The New Orleans Times-Picayune reports. "After meeting with the president on Thursday as part of the group of 16 centrist senators, Landrieu said: 'The primary purpose of health reform ... is cost containment. We need to change the cost curve, which has the power to essentially bankrupt government for all intents and purposes.' On Sunday, Landrieu said, 'Neither the government nor families or businesses can afford the current system that we have. The rates are going through the roof, for small businesses, for families. We're predicting in our state it could be as much as 50 percent of average household incomes are going to have to go to affording health insurance. We must do something'" (Tilove, 9/13).

Gannett Washington Bureau/The Ithaca Journal reports that members of New York's delegation aren't considered crucial, but will influence a final bill: " New York's congressional delegation is dominated by liberal Democrats, many of whom would vote for a single-payer health care system that would make the federal government the sole source of health care financing. But that kind of dramatic change doesn't have enough votes to pass even in the House, where Democrats hold a solid majority.

"For a public insurance option to win approval in the House, it must satisfy liberal and conservative Democrats while avoiding any increase in the budget deficit. That deal has not yet been struck, and many members of the New York delegation say they are undecided how they will vote on whatever compromise reaches the House floor" (Tumulty, 9/13).

in a separate story, The Associated Press examines the details of Baucus' plan and finds that while hospital and drug makers like what they see, insurers, doctors, advocates for low-income workers and some business groups aren't as happy. The Baucus plan would cover "around 95 percent of Americans. Illegal immigrants would not receive government benefits," AP reports. It would cost less than $900 billion over 10 years and would be paid for with "fees on insurance companies, drug makers, medical device manufacturers and insurers," plus a "[t]ax of 35 percent on insurance plans costing more than $8,000 for individuals and $21,000 for families, applied to premium amounts over the threshold." There would also by '[a] fee on employers whose workers receive government subsidies to help them pay premiums," and "fines on those who fail to get coverage" (9/14).

Related KHN story: Baucus Proposal For Senate Finance Health Care Deal (9/8)

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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