Max Baucus celebrates Labor Day by ruining healthcare reform

Max Baucus, U.S. Senator from Montana.

Max Baucus Image via Wikipedia

The chairman of the Senate Finance Committee, Democrat Max Baucus, is circulating what he calls a bipartisan proposal for healthcare reform. The proposal contains neither a public option (not even “triggers,”) nor a government-run insurance plan to compete with private insurers. Baucus refuses to support the public option even though a majority of constituents from his state of Montana say they approve of the public option idea, while a majority disapprove of Baucus’ actions on health care reform, and a majority of Americans support the choice of a public option.

Additionally, Republicans like Charles Grassley are unlikely to support even this woefully watered down proposal. If Republicans are refusing to vote no on reform regardless of what the final healthcare bill contains (Republican Senator Jim Inhofe says he is going to vote no without reading or knowing what the bill includes,) why does Baucus continue to compromise reform into total meaninglessness? The Republicans insist on throwing chronic tantrums and have made it clear they’re not interested in compromise, so one can only conclude Baucus is tossing out the public option — triggers and all — because of demands from the private healthcare industry with perhaps some other Centrist Democrats serving as proxies for private industry wish lists.

Baucus’s proposal will cost between $850 billion and $900 billion, which he plans to pay for by taxing insurance companies on their most expensive policies. “The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services,” according to the New York Times. This means employers will provide less healthcare coverage for their employees, who will then have to pay for their healthcare out-of-pocket, which effectively passes the cost for Baucus’s plan to hardworking men and women.

In July, former healthcare executive Wendell Potter told me about these kinds of “consumer-driven plans,” a euphemistic term for shifting the financial burden from insurance company to consumer. Pottter explained that these plans feature high deductibles and are really just another way for the insurance companies to make money from the suffering of their consumers. Baucus isn’t proposing a reform solution that will benefit a majority of Americans in his latest proposal. He’s literally shifting the burden from the insurance companies to employers, and ultimately employees. Baucus is actually maximizing the suffering of a majority of Americans.

California Lieutenant Governor John Garamendi told the Associated Press in 2005 when he was serving as the state’s insurance commissioner, the movement toward consumer-driven coverage will eventually result in a “death spiral” for managed care plans. Unlike “death panels,” “death spirals” are the real deal. Garamendi explained that this will happen as consumer-driven plans “cherry-pick” the youngest, healthiest and richest customers while forcing managed care plans to charge more to cover the sickest patients. The result, he predicted, will be more uninsured people.

“In other words,” Potter explains, “a high-deductible plan might be exactly what you’re looking for if you don’t really need decent insurance now and can afford to shell out thousands of dollars of your own money in the event you get hit by a bus. The rest of us, however, might want to steer clear of this sort of plan — if we had the choice.”

Baucus attempts to address the financial worries of Americans by including another section in the proposal where poor people receive assistance from the government in order to pay for their insurance. People with incomes from 300 percent to 400 percent of the poverty level (up to $88,200 for a family of four) would generally not have to pay more than 13 percent of their income in premiums. Currently, 37 percent of low-income people and 22 percent of middle income people with private coverage spend more than 10 percent of their household income on health care, compared with 8 percent of high-income people.

Baucus’s proposal is a government subsidization of the private insurance industry. Nothing in his “solution” controls cost or regulates the insurance industry. In fact, coverage under Baucus’s plan would be less extensive than the most modest of three levels envisioned in a bill approved by three House committees. Poor people pay taxes into a system in which the government then cuts them checks to purchase insurance on the private market. It’s more expensive for average citizens, and it’s a boon for the private healthcare industry.

In the past six nearly one-fourth of every dime raised by Baucus and his political action committee has come from groups and individuals associated with drug companies, insurers, hospitals, medical supply firms, health service companies and other health professionals. These donations total about $3.4 million, or $1,500 a day, every day, from January 2003 through 2008, according to the Billings Gazette.

Baucus would have to be insane to drain the pockets of his most generous campaign contributors. So it’s no surprise that this proposal — rather than placing the onus of reform on the private healthcare industry — places the burden on the shoulders of average, hardworking men and women. It’s not surprising, but it sure is evil.

29 Comments

  1. herblepp

    Ms. Kilkenny talks about her opinions without facts or evidence in support. She fails to realize that consumers pay for health care already whether its through taxes or employer provided. No version of a government health plan proposal, whether the House, Senate or the President’s, address reforms that will be most effective at reducing costs. The government developed employer provided health care is a major contributor to overuse of health care services. Government provides political solutions to problem, not economically sound effective soultions based upon evidence. Who would want healthcare provide by the government who provided Franie May, Freddie Mac, ethanol and 30-years of trying to find gasoline replacements at a cost of billions of dollars wasted?
    Bon Temps Rouler

    • Allison Kilkenny

      She fails to realize that consumers pay for health care already whether its through taxes or employer provided.

      No where do I claim or even suggest healthcare is free, so this is a weird statement. My thesis (which you either misunderstood or willfully ignored) is that Max Baucus’s proposal is a boon to the private healthcare industry because Baucus plans to pay for it by taxing insurance companies on their most expensive policies. The New York Times reports “The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services. None of this is a matter of opinion. It’s in Baucus’s proposal.

      Government provides political solutions to problem, not economically sound effective soultions based upon evidence.

      Yikes. Speaking of regurgitating propaganda without facts or evidence. Let me guess, you think the free market can provide health insurance more efficiently than the government. Well, we see what the fruits of deregulation and the private markets are: bubbles followed by apocalyptical market crashes. Yes, let’s throw the healthcare system right into the free market. Great idea.

  2. Allison – I’m not particularly crazy about the Baucus plan either, but I have to say that it is somewhat misleading to label it a “consumer driven” health care plan. It simply is not. A plan that would further promote HSA plans with higher deductibles would qualify as a consumer driven health care plan. I seriously doubt that Regina Herzlinger – likely the greatest proponent of consumer driven care – would agree with your assessment. I knowJ John Garamendi and understand his feelings about the consumer driven movement – because I share his opinion. But this really isn’t what he’s talking about.
    There are no gov’t subsidies in consumer driven care.
    There are no increases to Medicare in consumer driven care.
    There would certainly be no mandated health insurance in consumer driven care – indeed, that is the absolute antithesis of the concept.

    As I say, I’m with you on not being thrilled with everything in Baucus’ plan – but its not all bad. We can and should do better, but i don’t see the up side in condemning the elements that will help people.

    • Allison Kilkenny

      but i don’t see the up side in condemning the elements that will help people.

      Shifting the cost to consumers is the very definition of a “consumer driven plan.” All a consumer-driven plan means is that the bulk of the cost is placed upon the consumer, and that’s exactly what Baucus is proposing. Even if the government partially subsidizes the plan, and there are slight increases to Medicare, Baucus’s plan still encourages employers to buy cheap coverage with the burden of full coverage then being passed on to employees. Call it whatever you want, but shifting the burden of coverage from employer to employee mirrors the behavior of consumer-drive plans. You’ll have to show me where all of these great benefits to the “people” live.

      Sorry, Rick, but I agree with Marcy Wheeler on this one. We will remain “serfs to the healthcare industry” under this proposal This plan does nothing to control costs, and as Wheeler points out, this plan ensures we’ll continue to spend more on health care than on federal taxes. Baucus is asking upper middle class to pay 26% of their income to health insurance companies. That’s highway robbery, and unsustainable. It’s kicking the can down the road instead of addressing the central problem — the model of a for-profit healthcare system is broken and needs to be fundamentally changed. Baucus’s solution relies on shifting the burden to employees, which again, is evil (and it can’t work in the long-term.)

      • Allison Kilkenny

        Additionally, Baucus’s proposal actually extracts about $400 billion in cost-savings from Medicare, “cuts that are stirring unease among lawmakers in both parties, due to the potential backlash among senior citizens, and Medicare’s own precarious fiscal state.” Senior citizens are not going to be thrilled.

  3. Allison – I just went and had a look at Bob Pear’s piece in the NYT. With respect to his assessment that the intention of taxing the insurance companies on their most expensive insurance policies is for the purpose of causing companies to buy cheaper poiicies for employees in order to cuause them to use less services makes no sense whatsoever. I can’t even believe that the way it reads is what Pear intended.
    The tax is on policies provided to employees at the highest possible level. Not sure if you’ve ever worked in a company, but there is a big difference between the policies offered to the executives at the top and employees at the bottom. This is intended to tax the policies at the top. These are people who can certainly afford to get health care even if they augment their employer provided insurance with an ancillary plan which they pay for themselves.
    If you take a look at who supports this tax, it is the very people in the Senate who support everything you have wanted. it is the insurance companies who are opposing this idea (big surprise) and those Senators who are supported by the insurance companies. I’m having a really difficult time seeing why this is troubling to you.

    • Allison Kilkenny

      First, while it’s tempting to envision these taxes will only affect the “highest possible levels,” let us remember that many people with these “gold-plated” plans are union members who took health care in exchange for wage increases. Second, Baucus’s proposal sets a $11,900 annual limit on upper middle class families for out-of-pocket medical costs — the co-payments, deductibles and similar charges for covered items and services. Baucus is asking middle class families to pay 26% of their income to health care. That’s insane.

      So we have no cost control and less coverage. Mm, where do I sign up?

    • Allison Kilkenny

      Also – Some believe Baucus imposed limits on how much the insurance companies can charge because it was a sort of wrong-headed concession made to get a better CBO score. The real bill, as Digby points out, will be written in conference committee as Obama told bloggers months ago:

      The House bills and the Senate bills will not be identical. We know this. The politics are different, because the makeup of the Senate and the House are different and they operate on different rules. I am not interested in making the best the enemy of the good. There will be a conference committee where the House and Senate bills will be reconciled, and that will be a tough, lengthy and serious negotiation process.

      I am less interested in making sure there’s a litmus test of perfection on every committee than I am in going ahead and getting a bill off the floor of the House and off the floor of the Senate. Eighty percent of those two bills will overlap. There’s going to be 20 percent that will be different in terms of how it will be funded, its approach to the public plan, its pay-or-play provisions. We shouldn’t automatically assume that if any of the bills coming out of the committees don’t meet our test, that there is a betrayal or failure. I think it’s an honest process of trying to reconcile a lot of different interests in a very big bill.

      Conference is where these differences will get ironed out. And that’s where my bottom lines will remain: Does this bill cover all Americans? Does it drive down costs both in the public sector and the private sector over the long-term. Does it improve quality? Does it emphasize prevention and wellness? Does it have a serious package of insurance reforms so people aren’t losing health care over a preexisting condition? Does it have a serious public option in place? Those are the kind of benchmarks I’ll be using. But I’m not assuming either the House and Senate bills will match up perfectly with where I want to end up. But I am going to be insisting we get something done.

      So we have a vague proposal entering a shadowy process during which everything gets “ironed out.” Feel that participatory democracy. :) The Democrats are going into committee showing exactly how weak they are. They totally abandoned the universal healthcare model, and Baucus’s plan doesn’t mention a public option, or a trigger, so none of this bodes well for how aggressively they plan to fight for liberal elements (wherever they are) in the final bill.

  4. I think I will have to answer this in a blog as it is much to much to respond to in a comment!
    I will just say this – I really think you are missing the point of what consumer driven health care is about. I am not a fan – but anyone who is would point out that its about putting the buying power back into the hands of the consumer as a way of controlling costs. That is a very far cry from pushing the burden onto the consumer. I don’t mean to go t semantical or anything, but I think its important that readers understand the nature and terms of the debate.

    • Allison Kilkenny

      Hey Rick – I would highly recommend reading these articles: The Baucus Plan: Junk Insurance by Definition and the always excellent Marcy Wheeler as opposed to me freely quoting from them. However, a quick point: this is absolutely shifting the burden of payment to employees. Here is an excerpt from the first article I linked to:

      [Baucus] proposes a mandate that uninsured people get plans that will cover “less than 70%” of medical costs.

      How would you feel about this insurance plan: a $500 deductible; a 50% co-pay, and a maximum of $4,200 out-of-pocket cost. Using a highly simplified model from the CBO, this plan has an actuarial value of about 66%. The premium for an individual would be $3,290 plus the administrative costs, which range from 7% to 30%. The high end is for individual and small firm policies, so let’s say 25%, for total premiums of at least $4,112.50.

      Under this plan, if you had medical costs of $8,725, or more, you would get back more than you paid in, that is, your premiums plus your co-pay plus your deductible would equal your costs. If you had $5,000 in expenses, maybe the cost of falling and breaking an arm (you’d be amazed how hard it is to find the cost for a medical procedure), you’d be out your premium and $2,750, a total of $6,862.50 that year. That is going to be a real problem for someone making $35,000 per year.

      I’d call that a pretty good definition of junk insurance.

  5. Rick Ungar

    Allison – it turns out I really can’t answer in a blog because there is absolutely none of the information you refer to seemingly available. I have scoured all the major newspapers, all the known players and the closest thing I can find this morning is a statement by Ezra Klein that Politico seems to have the most up to date info. If you read Politico, it is really only the bullet points I referred to yesterday.
    I wonder if you can point me in the direction of where you are getting this detailed info to form these rather firm points you express? It would be very helpful.

    • Allison Kilkenny

      I’m not sure what you mean. Which information specifically?

  6. Rick Ungar

    About the elements of Baucus’ proposal. You seem to be drawing some very firm conclusions that need to be based on what is in the actual proposal. Yet, while I am able to find “the bullet points”, I can’t seem to track down any information as to the data which reveals that his plan would cause the upper middle class to pay 25% of their income to health care; where you see that Baucus’ plan extracts $400 billion from Medicare, etc. I simply cannot find any of these facts or figures. Maybe you can point me?

    One fact I was able to find is that Baucus’ plan proposes high deductible insurance plans ONLY for participants up to 25 years of age – hardly the shift to consumer driven health care that you appear to allege, based on Wendell Potters assertions. You kind of have to see the logic of that, don’t you? If we are going to mandate everyone to have health insurance, and we know that kids under 25 are less likely to get sick than we older folks, why not let them pay a lower premium for their mandated health care with a higher deductible? Right now, many of these kids elect to have no insurance at all. That is consumer driven health care – they are exercising their right to chose whether they need it or not.

    • Allison Kilkenny

      Gotchya. The $400 figure is from the Washington Post’s Shailagh Murray. The 25% figure is from Marcy Wheeler’s family of four-$88,200 model. (I did link to these in our original conversations, so please let me know if the links are the problem).

      One fact I was able to find is that Baucus’ plan proposes high deductible insurance plans ONLY for participants up to 25 years of age

      I haven’t read this anywhere. Where did you see this? I just tried searching for any mention of specific age brackets and came up empty. From what I’ve read, the proposal seems much more fee oriented and lacks age cut-off specifics. What the major news outlets stress is the tax on expensive policies, which may lead to employers buying cheaper, less generous coverage for employees, thereby reducing the overuse of medical services.

      Right now, many of these kids elect to have no insurance at all.

      I can tell you right now, Rick (because you’re talking about my age bracket,) that few people my age are “electing” not to get insurance. We simply can’t afford it. This is a talking point straight out of the Republican handbook: “Young people just don’t WANT insurance!” We’re not talking about people who just can’t be bothered to take time off from checking their Facebooks and rocking out to Guitar Hero to care about their health. They can’t afford the outrageous premiums.

      You can’t “exercise the freedom” not to have car insurance, so we shouldn’t dally with such ridiculous free market excuses when it comes to our nation’s health. The reason the public option was so important is because mandates under any other system (for example: Baucus) ensures a boon to the private healthcare industry. However, mandates under a public option could have at least controlled costs. Baucus’s proposal is the worst of both worlds: mandates under a private system that shifts the burden to employees. Yikes.

      • Hi – here are the answer to your questions directly from the Baucus memo (which is now available at /www.healthbeatblog.com/2009/09/finally-max-baucus-unveils-his-outline-for-reform-.html

        First, a special category has been set up for the “young invicibles” (that’s you!)
        Benefit Options. Four benefit categories would be created: Bronze, Silver, Gold and Platinum, with the following actuarial values:
         Bronze (minimum creditable coverage) = 65%  Silver = 73%  Gold = 81%  Platinum = 90%
        A separate “young invincible” policy would be available in addition to these benefit options. This policy would be targeted to young adults who desire a less expensive catastrophic coverage plan but with a requirement that preventive services be covered below the catastrophic amount. Cost-sharing for preventive benefits would be allowed.

        As to the tax on the insurance companies that you feel will result in crappier insurance for all employees, here are the figures-

        High Cost Insurance Excise Tax. An excise tax of 35% would be levied on insurance companies and insurance administrators for any health insurance plan that is above $8,000 for singles and $21,000 for family plans. The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market. The tax would apply to the amount of the premium in excess of the threshold. The threshold would be indexed for inflation, and a transition rule would raise the threshold by 20%, 10%, and 5% for the 17 highest cost states for the first three years.

        I can virtually guarantee you that there are no union worker families with a health insurance plan where the premiums are over $21K per year! Or, for that matter, at any other employer. These are the plans offered to the top executives. So, I don’t think your concern would come come to reality.

        One more thing – here is an additional revenue provision –
        Limit Health Flexible Savings Account Contributions. Contributions to health Flexible Savings Accounts (FSAs) would be limited to $2,000 per year under this proposal.

        This is hardly the act of a plan moving in the direction of consumer based health care!!!

        • Allison Kilkenny

          An excise tax of 35% would be levied on insurance companies and insurance administrators for any health insurance plan that is above $8,000 for singles and $21,000 for family plans.

          Mm’k. Here is another way to envision these numbers:

          Maximum amount a family of four making $67,000 would have to pay for health care, per year: $20,610 (31% of income)

          Total amount that family of four would pay in fine if they did not get health care insurance: $3,800

          Total amount a corporation with more than 50 employees would pay in fine if it did not offer health insurance: $400 per employee

          Total amount a corporation can pay for health care plans without paying 35% tax: $8000 individual, $21,000 family

          If the fine procured by not insuring employees is cheaper than a government fine, where is the incentive not to race for the bottom and offer less coverage to employees? Where is the price control and regulation?

          Here is a great example of the Race to the Bottom from Marcy Wheeler. Let’s say there’s an imaginary company called AlmartWay (wink) that employs around 1.4 million people in the US. (I’m going to paste the example in its entirety since selectively quoting from it would be pointless.)

          AlmartWay pays such shitty wages that a huge proportion of their employees would actually be eligible for Medicaid, particularly with the eligibility for Medicaid boosted to 133% of poverty. So those employees could just enroll in Medicaid; AlmartWay wouldn’t pay a dime, and you and I would therefore be subsidizing the gutting of our local economy so that the descendants of Sam AlmartWay could continue to get disgustingly rich.

          But say that only covers about 500,000 of AlmartWay’s employees. That would leave 900,000 employees. Enough that AlmartWay might want to offer health care to avoid the 350 million dollar fine it might get. So AlmartWay offers a plan that has a huge deductible and pays 60% of costs that employees have to buy into. According to Bad Max’s plan, after all, employer health care plans don’t have to meet any of the standards that single enrollee plans have to meet, save for making preventative care available.

          Coverage offered by an employer of any size, including fully insured and self insured plans, is not required to comply with the list of benefits required of plans in the non-group and small group markets. Employers must provide first dollar coverage for prevention services (except where value-based insurance design is used), however, and cannot have a maximum out-of-pocket limit greater than that provided by the standards established for Health Savings Accounts (HSAs).

          Because of AlmartWay’s size, everyone would be automatically enrolled.

          Employers with 200 or more employees must automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of employer coverage, however, if they are able to demonstrate that they have coverage from another source. Additionally, states would have the option of establishing a process for auto-enrollment of individuals and families into policies offered in the non-group and small group markets

          Which means AlmartWay’s employees can only get out of paying for such crap is if they can prove that they’re enrolled in something else. But unless AlmartWay’s insurance cost more than 13% of their employees’ salary, then that employee couldn’t get a subsidy they’d otherwise qualify for.

          As a general matter, if an employee is offered employer-provided health insurance coverage, the individual is ineligible for the tax credit for health insurance purchased through an exchange. An employee who is offered unaffordable coverage by their employer, however, can be eligible for the tax credit. Unaffordable is defined as 13% of the employee’s income.

          Hell, if I were a rapacious manager like AlmartWay’s completely hypothetical managers were, I’d turn employee health care into a profit center because (if I read this right) you could require employees to pay back 12.9% of their income for health care, and the only thing you’d really have to promise in return is preventative care. So I predict, if this bill passes in anywhere near this form, that AlmartWay will start making its own employee health care a big profit center because they will be stuck.

          By golly. This is even a health care plan Blanche Lincoln and Mark Pryor and their biggest constituent could love!! Though frankly, Bad Max’s plan is even worse than Wal-Mart itself–with a call for part time mandates and no disability discrimination–called for (though maybe Wal-Mart was thinking of the free subsidy for its Medicaid eligible employees all along).

          • Aren’t you kind of mixing apples and oranges here? First you refer to the excise tax – what the insurance company will pay on certain policies. Then you jump to the penalties for failing to get health insurance per the mandate and the penalty a company will pay for not providing insurance, a wholly unrelated matter, no? You may have a point on the penalties (i’ll have a look) but I don’t get why you would be making such a comparison. Am I missing something in the numbers or is there a point you are trying to make that I’m not seeing?

          • Allison Kilkenny

            You brought up the tax on insurance companies, but my response included the other available figures that affect families, plus the possible incentives corporations will face to provide junk insurance. I didn’t intend to conflate the two separate responses, but I can see how it appears that way.

            The point of everything (and the point I’ve been making since the beginning) is in order to controls costs, expand coverage, and regulate the insurance industry, we need a serious public option. Baucus’s proposal doesn’t control costs. The provision that people won’t have to pay more than 13% of their income in health care premiums means that a family of four making $67,000 would pay $8,710. A family of four making $88,200 would pay $11,466. A family of four making $90,000 isn’t even included in his proposal so there’s no way to know how much they’ll be paying.

            Then there are the limits for out-of-pocket expenses ($11,900) and mandates. Quite simply: any mandates without a public option is the government subsidization of the private healthcare industry. The worst case scenario is mandates without a public option, and it looks like we’re going to get just that. Lack of regulation with mandates is a dream for the private insurance industry. With a captive market and no serious public option acting as a competitor, they’re free to exploit sick people for as long as they desire.

          • Please don;t think that I am defending the Baucus plan as a preferred solution. I just think it is important to get the facts right.

            The 13% you refer to is specifically tied to the ability to get tax credits.

            “Individuals between 300-400% of poverty would be eligible for a premium credit at a flat percent of income. Liability for premiums would be capped at 13% of income for the purchase of a Silver plan. Cost-sharing assistance would not be provided.”

            Nowhere does it say that a family in this braket or higher is obligated to pay a higher premium – it just says that you won’t get a tax credit. Families can still buy whatever they want -less expensive or more expensive.
            There’s no such thing that I can see where a family of 4 making 67K MUST pay $8700 nor is there anything that says that a family of 4 making $88,200 MUST pay $11,466. This just is not what this says so we shouldn’t be suggesting otherwise.

            The penalty provision is not based on how much a policy should cost you. It lays out the income brackets and assesses a fine for buying no health insurance accordingly.

            I don’t mean to be a pain in the ass, but we should get this info right.

            As for the public option, you would like it, I would like it – but it is not gong to happen. So, I would ask you again what I asked earlier in the chain. What would you suggest?????

          • Allison Kilkenny

            Please don;t think that I am defending the Baucus plan as a preferred solution.

            No worries. I didn’t think you were/are.

            Families can still buy whatever they want -less expensive or more expensive

            Sure, rich people can afford great insurance. That’s really nothing new. :)

            There’s no such thing that I can see where a family of 4 making 67K MUST pay $8700 nor is there anything that says that a family of 4 making $88,200 MUST pay $11,466. This just is not what this says so we shouldn’t be suggesting otherwise.

            Well, certainly the uninsured won’t be placed in camps as penalty, but for taxpayers between 100-300% of poverty, the penalty for failing to obtain health coverage is $750 per year with a maximum penalty per family of $1500. For taxpayers with incomes above 300% of poverty, the penalty for failing to obtain coverage is $950 per year with a maximum penalty per family of $3800. Again, I would be fine with mandates under a universal healthcare system or a serious public option, but not as means to subsidize the private healthcare industry. This just commits everyone to a system where premiums will continue to skyrocket.

            I think our conversation has shifted from my original concern. I wrote that Baucus plans to pay for his proposal by taxing insurance companies on their most expensive policies may cause employers to buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services. This means employers will provide less healthcare coverage for their employees, who will then have to pay for their healthcare out-of-pocket, which effectively passes the cost for Baucus’s plan to hardworking men and women. My concern was that his plan shifts the onus of healthcare from employer to employee, mirroring the behavior of those icky “consumer driven plans.”

            Baucus’s plan is unsustainable and fails to control costs, so I really don’t see the point in it unless we’re super eager to subsidize the private insurance industry.

            I’ve already stated this a couple times, but one more time won’t hurt: Without a public option, meaningful reform is not possible. Triggers that lead to fractionated, parochial “public options” and coops are too small to seriously compete with the private insurance industry. Progressives would be wiser to vote no on such a horrible healthcare bill and wait a year to begin negotiations again, but this time from a position of universal healthcare, so even the “compromise” is some kind of serious public option.

            The negotiations this time around were screwed from the beginning because Democrats began the compromise from the middle position of the public option. If they had begun for (and fought like hell for) universal coverage, the public option would have been the ultimate compromise. I accept that you and I do not see eyes-to-eye on this matter. :)

          • Rick Ungar

            OK. so, here’s the problem. The can’t start again in a year because it will be mid-term elections and there isn’t a chance in hell anyone is going to touch this. It would be possible to try again after mid-terms but unlikely, particularly the way it has gone this time. If history tells us anything, we are likely to loose democrats in the House – not enough to shift the balance of control to the Repub., but less is certainly not better.
            Also-after the mid-terms Obama has to begin running for president, also not a great time to go back to a contentious battle. So, in all likelihood, we can’t come back to this until after the next presidential election, and, should Obama loose, we won’t get back to again for a very long time. This is why we don’t have the luxury of just throwing it all out for lack of the public option. It’s not an accident that the trigger mechanism would require health insurance improvements in five years – that would be time for Obama to install the public option while still president but not having to run for office again.

          • Allison Kilkenny

            If history tells us anything, we are likely to loose democrats in the House

            Right, why do we know that, Rick? Because the Democrats fail to fight for big, sweeping reform that will excite the base and help the majority of Americans. They constantly settle for lukewarm initiatives, or worse, Republican-esque bills that end up causing widespread suffering. Then, surprise-surprise, after they’ve spent a year acting like Republicans, they lose their seats. Shocker.

            If Obama attached his name to a watered down bill like this, he’s going to be remembered as the President who fines families $3800 for refusing to buy junk insurance they don’t need. Not a thing you want on your resume come 2012.

  7. I went back and looked and I have no idea where you are coming up with these numbers. Where in the world does it say that a family has to buy health insurance that costs over $20K??? Are you trying to say that the only way the insurance company has to pay a tax is if a family of four does pay this amount? Because that’s just plain wrong.

    “The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market”

    Self-insured plans are large companies that can afford to self-insure. Like GE, etc. It clearly says that the tax does not apply to the individual market so you can’t be trying to say that the tax only applies when a family buys such an expensive policy because that’s the individual market.

    So, you must be talking about the penalties. But the draft clearly says,

    “The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market.”

    So we are clear, “individual market’ does not mean plans sold to just an individual – its a plan sold directly to a consumer, ie. not provided by company or group plan.

    So, what are you saying? Maybe instead of coming back with a bunch of numbers, you can just kind of answer my question?

  8. This just occurred to me – is it possible that you are defining “self-insured” as meaning one who buys their own insurance? That might explain the numbers you are suggesting.
    In case this is what is happening, “self-insurned’ means large companies with a large number of employees who find it cheaper to pay off a claim out of their own pocket rather than go to an insurance company. Typically, they use one of the large health insurance companies to administrate the program for them so the employee thinks they are insured by, say, United Healthcare, when they are really just the administrator. This, by the way, comes with a whole bunch of other problems for employees. These programs are regulated by ERISA. Among other problems, this means that if you are getting your coverage from a company that is self-insured, you cannot sue for damages in a State court. You have to go to federal court and you are only entitled to your actual, out-of-pocket losses, no matter how badly the company might have behaved in attempting to deny your claim.

    • Allison Kilkenny

      I can barely keep up with you, Rick! :)

      Baucus claims he will prevent people from having to pay more than 13% of their income in health care premiums. For the family of four making $67,000, that’s $8,710. For the family of four making $88,200, that’s $11,466. Then, he has a limit for total out-of-pocket expenses (and this appears to include everything). For that family of four (regardless of income) the limit is $11,900. (Families would only have to pay that limit if they used enough services to reach that limit, but in Baucus’s plan, health insurance companies pay far less of actual expenses, so in his plan, families are going to reach the limit quickly.)

      Now, here we get back to regulation. What’s to stop the insurance companies from charging everyone that 13% rate on premiums? As Wheeler puts it, “Under Bad Max’s plan, because it requires everyone to have insurance, corporations actually have more of a guarantee (and therefore an incentive) to charge such exorbitant fees.” The $20k figure was based on the assumption that the model families (heaven forbid) are subjected to Baucus’s plan and pay the limit as stated under the proposal.

      Help me out on where I mentioned “self-insured” plans. I did a quick search and only see the posts where you mention it.

      Here is what I’m afraid of: a plan that forces uninsured people to purchase under-regulated private insurance that will cover “less than 70%” of medical costs. I’m with Rep. Lynn Woolsey on this one: the only way to compete with private insurance was the public option, and “compromises” (read: surrender) like this proposal from Baucus have killed the concept of widespread coverage and price control.

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