Baucus Watch, Part VIII

What kind of public plan is the senator talking about?

As chairman of the Senate Finance Committee, Senator Max Baucus holds the keys to health care reform; any health care legislation must pass through his committee. So what he says or doesn’t say is important to those following the twists and turns of the congressional effort to fix our health care system. This is the eighth of an occasional series of posts on the senator’s pronouncements and how the media has covered them. The entire series is archived here.

More clues are coming from Sen. Baucus about the type of health reform likely to emerge from his committee. It’s sounding more and more like the senator won’t let those who may be required to carry health insurance choose to buy it from a public plan that might compete with commercial insurers. Such a plan is vehemently opposed by the insurance industry, because it would cause them to lose business. For the record, doctors and hospitals aren’t too keen on a public plan either, fearing that it could lead to “socialized medicine”—and lower paychecks.

It does seem like Baucus might be listening to them. After all, health care interests contributed more than $3 million to his campaign and leadership PAC last year—certainly enough to buy access, which is what Washington is all about. Last week he told reporters that while a government-run plan (the new pejorative du jour) was still on the table, “it might be a bit on the side of the table.” In other words, it’s not, at the moment, the centerpiece of a bill. Instead, according to, Baucus said he would focus on preserving the insurance system for self-insured companies and expanding private insurance and public programs. “We’ll end up with more private insurance and more public insurance,” he said.

CQ explained that “self-insured companies” are big employers that unilaterally insure their employees and assume the risk, but often hire insurance companies to administer their plans. More to the point for reform, though, self-insured plans don’t have to offer state-mandated health benefits like coverage for maternity care, smoking cessation, or drugs for Alzheimer’s disease. Some 55 percent of all workers with coverage are in self-insured plans.

What exactly does Baucus have in mind for these plans? Does he mean they would not have to conform to any minimum health benefits package that might be part of a bill? That’s a good question to begin exploring. So far, there’s been virtually no media discussion of what will be in a minimum benefit package—an issue guaranteed to ignite World War III.

Baucus signaled that an individual mandate is likely to be part of the plan, saying “I believe that everyone should have health insurance, every American should have health insurance. This (new) system will only work if every American gets health insurance,” That, of course, circles back to Massachusetts, with its individual mandate requiring every resident to have coverage one way or another. The senator opined on that: “We’ll set up a system similar to Massachusetts’ where an individual looking for health insurance can go to the exchange and get health insurance from a public health insurance company – similar to FEHBP for government employees today.”

But was Baucus mixing up his terms or signaling a different type of “public” plan? The FEHBP, or Federal Employee Health Benefit Plan, is a system available to all federal employees, who may choose among many different commercial health care plans that meet the coverage-and-benefit requirements set by the federal government. The FEHBP acts as any other employer which chooses coverage and benefits for its workers; it just offers more options.

This is very different from what some public plan advocates are envisioning: a public plan like the Medicare program, where the government provides the benefits. “There is more than one way to create a public plan. There are public options and there are public options,” Baucus said. It’s not clear the senator will support even an FEHBP brand. A reporter for, a division of the conservative Media Research Center, tried to pin Baucus down, asking whether the senator would personally push for such a plan—one which both he and President Obama could support. “We’ll see,” Baucus answered.

Baucus was actually saying quite a lot. It’s now up to the media to explain all this in terms that ordinary people can understand.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.