A First Look at the Baucus Plan

The Washington Post has gotten hold of the mark-up notes for the the health care reform plan currently being revised by Senator Max Baucus (D-MT) in the Senate Finance Committee. His version of the bill, being created largely on his own authority as chairman of that committee, with limited outside input, is likely to be the basis for whatever final legislation passes the Senate.

Although they are 262 pages long, these notes are not the final bill. They are more like a commentary on the bill and explanation of what is in it. Assuming they are truthful, they present a more understandable explanation of the content of the bill than most readers would get from the bill language itself because of the multiple references to prior legislation which take a great deal of effort to track down and research.

The legislation, as described in these notes, shows a genuine effort on Senator Baucus’ part to address many of the objections to various aspects of the original HR3200. Though there are still major issues for concern, the greatest complaint may end up being that the bill as currently revised is so watered down that it isn’t likely to really accomplish many of the goals set for health care reform by President Obama.

Here are some highlights:

• The bill does allow for interstate purchase of health insurance, though under restrictions which will not allow for real competition unless the states actively make an effort to follow through with their own deregulation.

• There is still a mandate forcing individuals to buy health insurance or pay a penalty. Interestingly, the $750 penalty is referred to specifically as an “excise tax” which goes directly against President Obama’s claim that it is not a tax. The effectiveness (and offensiveness) of the mandate is also substantially undermined by specific provisions against any of the civil or criminal penalties previously proposed for those who don’t pay the tax and don’t get insurance. The government could only collect the tax out of money already in the government’s possession, such as an individual’s tax refund. These are very positive changes if you didn’t like the mandate, but for those who did like it they do mean that there will still be people who can remain uninsured by choice with few real consequences.

• Interestingly, the bill includes a provision requiring members of Congress to enter into the same insurance pool as the general population and give up the special coverage which they currently enjoy, though they would continue to have a higher employer-paid premium than most workers do, assuring them first-class coverage.

• The bill contains provisions for a substantial protective tariff on imported drugs and medical equipment, totaling almost $7 billion a year. This implies some lifting of the current restrictions on the importation of drugs, but the specifics are not clear from the document.

• There is a proposal for an excise tax on high-cost health insurance plans, where companies would be penalized for offering “cadillac” health plans. I really don’t see the logic behind this except as a revenue raising measure.

• White there is no specific provision for tort reform, there is a vaguely worded proposeal for a “sense of the Senate” resolution encouraging states to find ways to limit the cost of malpractice claims through alternative resolution methods. Not terribly meaningful, but well likely to be the best response to this problem you’ll get from a Democrat-controlled Senate.

• Subtitle F is a very long section on the “Patient-Centered Outcomes Research Act of 2009” which is the much-ballyhooed source of the rumors about supposed death panels. It would create an institute to study the cost-effectiveness and outcome value of various types of treatment and make recommendations on which policy would be set. While it is certainly not the stated intention behind creating an organization like this, it is inevitable that one of the things this institute would issue guidelines on would be end-of-life care, including when it was cost effective to deny care to an elderly patient and let them die.

• There are a lot of provisions to increase the efficiency of Medicare and Medicaid and cut down on fraud. This is intended to raise much of the revenue needed to fund the other elements of the bill, but how effective a bunch of additional bureaucrats and mandates will be in doing this is certainly debatable. Additional savings also come from placing limits on the massively expensive Medicare Prescription Drug Plan passed under the Bush administration.

• The bill specifically states that none of the current state or federal policies regarding abortion would be changed in any way, including no additional federal funding for abortion or interference in state laws limiting availability of abortion. It also specifies that abortion would have to be included as an additional rider above and beyond the cost for minimum benefits on an insurance plan paid for by the government.

• Rather than providing a “public option” to compete with private health insurance the bill expands Medicaid coverage to apply at least partially to people earning up to 300% of the Federal Poverty Level, with benefits inversely proportional to income. It would also provide a tax credit for insurance premiums paid by people earning up to 300% of the Federal Poverty Level, which would be about $30,000 for an individual or about $66,000 for a family of 4. It also provides $6 billion to help underwrite the creation of tax-exempt and member-run insurance co-ops as an alternative to traditional insurance. Relatively few specifics are provided on this proposal.

• The bill creates massive new health care bureaucracies, including boards to oversee insurance prices, drug prices, medical practices and treatment pricing. It inserts a government role in virtually every aspect of health insurance and medical care, from determing how you are insured to how you are treated to what drugs you are allowed to have. This means more rationing and more delay and denial of care. Most of this is in the interest of reducing costs and increasing efficiency, but I fail to see how government boards and commissions could ever do this better than the free market.

• Much of this plan seems to be drawn from the Massachusetts model, which has been enormously more expensive than anticipated and is considered a disastrous failure within Massachusetts, making service worse and costs higher for everyone while still failing to provide truly universal coverage.

So what you have here is very much a compromise bill, even if no Republicans have been willing to put their names on it. It makes many concessions, weakening elements which President Obama demanded like the insurance mandate, substituting ill-defined co-ops for the public option and making a mostly symbolic gesture at opening up the interstate insurance market. All of this comes with increases in cost for every taxpayer and a likely reduction in quality of service for many needing care. And at the same time it will still leave millions uninsured. But it does create thousands of new jobs in the massive new health care bureaucracy, so that’s just fantastic.

Looking at these proposals for health care I’m left asking what is the point of all of this? It spends a lot of money and wastes a great deal of effort to accomplish very little of substance. Senator Baucus has clearly worked very hard to craft something which can satisfy enough Senators to pass, but in the process he’s produced nothing which I can identify as a clear-cut plan for real reform. I really don’t think that these small adjustments to how we do health care are the answer. We’d be better off going back to the drawing board, finding a few basic principles everyone agrees on and passing something simple and comprehensive and effective.


About Dave 536 Articles
Dave Nalle has worked as a magazine editor, a freelance writer, a capitol hill staffer, a game designer and taught college history for many years. He now designs fonts for a living and lives with his family in a small town just outside Austin where he is ex-president of the local Lions Club. He is on the board of the Republican Liberty Caucus and Politics Editor of Blogcritics Magazine. You can find his writings about fonts, art and graphic design at The Scriptorium. He also runs a conspiracy debunking site at IdiotWars.com.

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