Plan To Overhaul US Health Care System Unveiled

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Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday released a proposal that would expand health insurance to all U.S. residents, saying that "now is the time" for Congress to address health care reform, the AP/Chicago Tribune reports (Freking, AP/Chicago Tribune, 11/12). Under the plan, employers of a certain size would have to provide coverage for workers or pay into a federal insurance fund. Individuals purchasing insurance on the private market would be given tax credits. A national health insurance exchange, similar to one proposed by President-elect Barack Obama, would be created to allow small businesses and people without insurance to choose among a menu of federally-approved private plans and a new "Medicare-style" federal program, the Boston Globe reports. Insurers would not be allowed to deny or charge different premiums to applicants with pre-existing health conditions.

In addition, the plan would expand Medicare to cover people ages 55 to 64 and let everyone with incomes below the federal poverty line enroll in Medicaid (Wangsness, Boston Globe, 11/13). SCHIP would be renewed and expanded to include all children in families with incomes less than 250% of the federal poverty level. The plan would eventually require that all U.S. residents be insured and provide subsidies for those who qualify for assistance (Armstrong, CQ Today, 11/12). Baucus also "broached another sensitive issue from the presidential campaign season, suggesting workers may be required to pay a tax on part of the value of health benefits they get from employers," according to Bloomberg. Baucus referred to "targeted reform," which would not subject all employer-provided benefits to taxes (Marcus, Bloomberg, 11/12).

The plan also does not mention how penalties would be imposed on those who do not obtain coverage. The plan also does not include a cost estimate, which Baucus said wouldn't be available from the Congressional Budget Office until legislative language is finalized. Baucus said his approach would require "investments" in the first five years but would generate savings after that. "It's important for us to have a good heart-to-heart talk with CBO" on scoring, he said.

Baucus will hold hearings, including one on Nov. 19, to gather feedback on the proposal. The aide said, "This was a first step. Now we're going out for another round of stakeholder input" (CQ Today, 11/12).

Individual Coverage Requirement

Baucus said that he proposed requiring all residents to obtain coverage because the mandate will stop shifting costs for care of the uninsured onto those who are insured and will prevent people from waiting until they are sick to purchase insurance. He said, "Coverage of all Americans will also make reforms work better, from insurance market reforms to a cost-saving focus on preventive care," adding, "Those who cannot afford coverage will not be required to purchase it -- there will be other options for them" (AP/Chicago Tribune, 11/12).

Coordination With Other Efforts

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Baucus also tried to "allay concerns he would take his own path rather than work with other lawmakers" to develop and pass health care legislation, CongressDaily reports. Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) has said he hopes to create a single overhaul bill that could be pushed through Congress swiftly. Baucus said, "I want to work with Sen. Kennedy," and "I want to work with the HELP committee." He "did not necessarily agree to a one-bill approach but expressed confidence lawmakers would reach a consensus," according to CongressDaily (Edney, CongressDaily, 11/12).

According to Baucus, "Much of what's here dovetails with the president-elect's own health plan. And where we differ, I have committed to work with him to find a consensus" (Hook et al., Los Angeles Times, 11/13).

Baucus said, "American families and our economy are in crisis over health care. We can't get coverage to the 61 million who are either uninsured or underinsured without a major overhaul of the system, and there's no way to really solve America's economic troubles without fixing health care for the long term" (Taylor, Roll Call, 11/12). He said, "The need is so great we have to act now with dispatch," adding that he would like the plan to make it through Congress and to Obama by summer 2009 (Los Angeles Times, 11/13).

Reaction

Thomas Mann, a political analyst at the Brookings Institution, said, "Key congressional players have decided to put some pressure on by having legislation ready to go at the beginning of the new administration," adding, "There are a lot of Democrats who want to get something done early on" (Bloomberg, 11/12).

In a joint statement, House Ways and Means Committee Chair Charles Rangel (D-N.Y.) and Health Subcommittee Chair Pete Stark (D-Calif.) said that Baucus' plan "supports a number of principles we have pursued over time, including many of those on which President-elect Obama campaigned." Kennedy, who has coordinated meetings with stakeholders to discuss a national health care overhaul, said the plan "provides an important analysis of the urgent need for significant improvements in our health care system and thoughtful recommendations for reform" (CongressDaily, 11/12).

Tommy Vietor, a spokesperson for Obama's transition team, said, "President-elect Obama applauds Chairman Baucus' work to draw attention to the challenges of the health system and looks forward to working closely with the chairman and other congressional leaders, as well as the American public, to make quality, affordable health care a reality for all Americans" (AP/Chicago Tribune, 11/12).

Finance Committee ranking member Chuck Grassley (R-Iowa) said, "Dramatically expanding government spending and putting additional pressure on employers already struggling to create jobs would have repercussions that need to be carefully considered," adding, "It's not a time for rosy scenarios" (Bloomberg, 11/12). Devon Herrick, an economist at the National Center for Policy Analysis, said, "The bottom line is that the Baucus plan will exacerbate current problems of skyrocketing costs and limited access while creating a huge burden for individual taxpayers and businesses," adding, "There is no such thing as free health care" (AP/Chicago Tribune, 11/12).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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