Finance Committee Offers Scaled-Back Proposal
Max Baucus (D-MT)
The Finance Committee turned out to be able to move admirably quickly toward drafting a pared-down version of their initial proposal, reaching a result that they hope the CBO will score as costing $1 trillion over ten years rather than $1.6 trillion over ten years. Ezra Klein was given an outline of their thinking. Basically, it looks like the $1.6 trillion proposal but scaled back. Instead of subsidies for people earning up to 400 percent of the poverty line, they’ll subsidize people up to 300 percent of the poverty line. And concurrent with that, the minimum level of insurance is being watered down. Medicaid will be expanded, but by less than was initially contemplated.
These kind of compromises strike me as fairly reasonable. There’s a case to be made that the CBO is scoring these health bills in an unduly unfavorable way. But that means that if we go with something cheaper, and the CBO turns out to have been unduly pessimistic there’ll be more money around than we thought to revisit this stuff and beef up subsidies and so forth. Alternatively, if the CBO turns out to have been right this means we’ll have a bill we can afford.
What’s really missing here is the public plan. As Ezra says “For all the concerns about cost, there is no strong public plan able to negotiate low rates and implement aggressive reforms.” This is too bad, and not just as a token of socialistic goodness. The cost savings implied by a robust public plan would do a lot to resolve some of the financial issues that are making it difficult for Finance to offer coverage that’s as generous as they initially intended. Thus far, unfortunately, cost conscious centrist senators haven’t tended to look at the public plan in that light. But since any legislation will go through several rounds of ping-pong with more liberal outfits—HELP Committee, the House of Representatives—I hope there’s still some time to turn their thinking around.
25 Responses to “Finance Committee Offers Scaled-Back Proposal”
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June 19th, 2009 at 10:03 am
You’re kidding, right? A trillion-dollar boondoggle for the insurance companies that does little to improve access and less than nothing to control future costs is anything but “reasonable”. Its passage would be the death-knell both for health care reform and for the Democratic majority in Congress. This train must be derailed. No STRONG public option, no deal.
June 19th, 2009 at 10:06 am
This seems like a brilliant move. The primary threat to the Democrats is the same one that bedeviled the Republicans – excessive spending. If the Democrats can move forward and confirm in the public’s mind that they are the party of fiscal responsibility – it will solidify the democratic majority.
June 19th, 2009 at 10:06 am
So the compromise is that the government will hand a trillion dollars over to private insurance companies, who will continue to compete with each other to find reasons to deny coverage. How do these assholes always win?
June 19th, 2009 at 10:10 am
Because there are too many people like jmo who think that’s “fiscal responsibility”.
June 19th, 2009 at 10:16 am
So we can spend more on a pointless, counterproductive war than we can spend on fixing our crappy health care system? Got it. What’s the f***ing point without the public option?
June 19th, 2009 at 10:17 am
Why this “health reform expensive” meme? The feds pay more, insurance industry get less, consumers pay MUCH less if the reform is good.
Healthcare would be cheaper; a more efficient player (the gov) will be doing the same with MUCH less. Why no attempts to try to frame the discussion this way? Kill the greedy insurers. People hate middlemen these days.
June 19th, 2009 at 10:22 am
Without a public plan, the intiative will fail. Skyrocketing healthcare costs across both the private and public sectors will result in a budget crisis. The Democrats will own this crisis. The Republican solution to this budget crisis will be for the government to give up on providing health care. Old people will have to accept dying earlier. Middle class people will have to accept that they can only see GPs and only get cheap, routine care. The poor will just have to do without.
We can’t let the Republicans back us into passing a flawed bill that we alone will own. That does more harm than good. We should instead let things fester.
It has to be made clear to Democratic members of congress that measures to keep costs down are much more important than easures to cover everybody. If you don’t fight costs, universal coverage is a fantasy.
June 19th, 2009 at 10:25 am
This is America. Paying $100 more in taxes and $400 less for health insurance means you’re out $100.
June 19th, 2009 at 10:27 am
My thought is the House will be the ones to include the public plan in their proposal and the two will merge. Pelosi said it will be in there. Obama supports it.
I don’t think you can do increments. If they punt on this now, it’ll never get done. “Reform” without the public plan will be an expensive mess and will turn the public off the idea of having to spend more tax dollars for a government-run plan. That will play in Republicans’ favor. Now’s the time to take advantage.
June 19th, 2009 at 10:27 am
What makes you think they care? They’re just dancing to the tune played by their paymasters.
June 19th, 2009 at 10:36 am
Can we get the CBO to estimate the cost & value of a plan with a strong public option? That would be interesting. At least to me. Maybe not to the Senate.
June 19th, 2009 at 10:37 am
“My thought is the House will be the ones to include the public plan in their proposal and the two will merge.”
Of course.
We can’t get a good initial bill out of the Senate because we’d need 60 votes.
But we can get a good bill passed by the Senate after it goes through the conference committee because we’ll only need 50 votes.
The math is pretty simple, and let’s hope the WH and the Democratic high commands on the Hill are playing the game with the correct strategy.
June 19th, 2009 at 10:37 am
“These kind of compromises strike me as fairly reasonable. “
In the same kind of way that the Iraq war struck you as fairly reasonable?
June 19th, 2009 at 10:39 am
“These kind of compromises strike me as fairly reasonable. “
In the same way that the Iraq war struck you as fairly reasonable?
June 19th, 2009 at 10:46 am
Dear El Cid,
Using numbers from the lewin group and numbers from the CBO estimate of the cost of the HELP committee exchange I calculated a strong public option would make the bill roughly $250 billion cheaper. A weak public option would only save about $100 billion.
http://jwalkerreport.blogspot.com/2009/06/public-option-could-save-250-billion.html
June 19th, 2009 at 10:53 am
Spending a trillion dollars without a public plan…How is that reasonable?
ughhhh.
June 19th, 2009 at 10:56 am
Without a public plan, the intiative will fail. Skyrocketing healthcare costs across both the private and public sectors will result in a budget crisis.
Possible. But it’s also possible that, if true 100% UHC is achieved via subsidies to insurance companies, in three or four years when the crisis hits conservatives and centrists will be forced to swallow a public plan, as the only means of getting us out of the crisis.
I regard the non-adoption of a public plan as highly undesirable. But what I regard as disastrous is the non-adoption of a public plan accompanied by a failure to get us to true UHC.
Anyway, as Matt suggests, the House will weigh in, and the White House has yet to forcefully give its input. Vigilance is highly appropriate at this stage, but panic isn’t.
June 19th, 2009 at 11:05 am
I think this plan is likely to put a golden straight jacket on health care reform. There are no major conservative politicians in Canada who think that having millions of people without insurance is a good idea. If we can get conservatives there in America things will be much better. Conservatives will be forced to choose between higher taxes and no public option and lower taxes and a public option. Alternatively they could support aggressive regulation of the insurance market, but they won’t be able to complain about nationalizing health care anymore.
June 19th, 2009 at 11:16 am
Jon: That’s a very valuable effort. I’d like to see it reflected in official fora.
June 19th, 2009 at 11:17 am
But we can get a good bill passed by the Senate after it goes through the conference committee because we’ll only need 50 votes.
Well, I was wondering about this yesterday. I was under the impression that conference committees ironed out relatively minor, non-substantive differences in legislation. Is there much precedent for returning to either chamber a bill that is hugely different from the one it sent to conference? I’d say passing a bill without a public option, and then receiving a Pelosified bill back from conference with a public option constitutes a pretty big change in the bill’s language. Such talk frankly gives me hope. I do find it curious, though, that there’s been much talk of reconciliation as a means of getting past the 60-vote requirement, and very little discussion of conference committee for the same purpose. I’m wondering (with hope, mind you) if such a strategy is viable. I’d be thrilled to learn that it is.
June 19th, 2009 at 12:00 pm
Any plan without a public option is worthless. All it will do is force people to buy insurance, pump even more money and political power into the pockets of insurers, and build mythologies where the puppets of corporate America can be trusted.
Jasper, you are pretty much ignoring the reality of insurance for the economists version of it. In real life, insurers just cancel your plan and let you die rather than paying out benefits. This prevents universal health care from being achieved under your magic-market-fairy strategy. You act like we don’t already have insurance companies and they aren’t already failing to perform their functions. You act like the only problem with health care occur among the uninsured. that’s simply not the case.
June 19th, 2009 at 12:15 pm
Hi Matt,
I’ve been reading the bill. I have to say, upon close inspection the bill leaves some obvious questions. The first section deals with pre-existing conditions. There is interesting language in this section which allows insurance companies to possibly refuse individuals, a scaled back version will be even worse. The entire bill must be rewritten.
There are also some interesting questions that arise with any of these bills. The problem for people is paying a premium. I have not yet come across the requirement that every business be required to pay for insurance for their employees. It might be in there but as of yet I have not come across it.
Another question is: Where does the entire premium come from. How does this affect the cost of insurance as the pool of individuals to pay into the Federal Employee Health Benefits plans, how much will the cost of insurance go down. There are so many questions. I don’t think any of these Senators even know what is in the original bill, let alone what will be in the watered down version.
June 19th, 2009 at 12:27 pm
Jasper, you are pretty much ignoring the reality of insurance for the economists version of it
soullite: My first choice would be single payer. My second choice would be a strong public option. My third choice would be genuine UHC via insurance company subsidies. I loathe the system we have now, dominated as it is by poorly regulated private insurance companies, and characterized as it is by a vast, uninsured population. So, while it wouldn’t be my first choice, if private insurance companies continued for a while to play a dominate role, but did so under a much better (eg, guaranteed issue, community rating) regulatory regime in a system that got everybody insured, then yes, I’d take that over the status quo. I suspect that, in your zeal to rid the world of Evil Health Insurance Companies, you wouldn’t take such a deal. I’m ok with that. Reasonable people can disagree.
In real life, insurers just cancel your plan and let you die rather than paying out benefits.
This indeed happens. And I’ll join you in opposing any legislation that fails to end such abuses. Again, I’m pretty confident (although by no means certain) any bill that makes it to Obama’s desk will encompass needed regulations to end such practices. I just don’t think it’s necessary (even if it might be desirable) to rid the world of private health insurance companies to accomplish this.
you act like we don’t already have insurance companies and they aren’t already failing to perform their functions.
I have no idea why you conclude this. I agree with you: the various abusive practices of health insurance companies must be ended by the government.
You act like the only problem with health care occur among the uninsured.
Again, you simply have no basis for this conclusion based on anything I’ve written.
June 20th, 2009 at 4:26 am
This seems to be a good one, but the problem will occur about the premium payment for the insurance companies. Also before taking this into action a public opinion must be reviewed.
June 20th, 2009 at 5:41 am
It seemed that all the American people will pay for a past politic,this is why some of my friends there are looking for other income’s resources,at least,to avoid any difficult politics over them and their families…