Baucus Watch, Part XIII

At last, the senator brings forth a plan

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 system. This is the thirteenth of an occasional series of posts on the senator’s pronouncements and how the media has covered them. The entire series is archived here.

Regular readers of Baucus Watch should not be surprised at the health reform compromise the Senate Finance Committee has brought forth—many provisions are not terribly friendly to staunch reform advocates, and give insurance companies lots of wiggle room. But, then, we at Campaign Desk had been predicting that.

What’s important now is for the media to dig deeply behind some of those provisions, and refrain from doing stories like the one the AP moved on its wires yesterday. It was a classic bullet-point story, with graphs on the plan’s cost—about $900 billion over ten years); how it’s paid for—-cuts to Medicare and Medicaid, fees on health insurers, drug companies, and device makers; subsidies—but only for individuals and families with incomes three times the poverty level (about $66,000 for a family of four); benefits package—policies could require families to pay as much of 35 percent of their medical costs or as little as 10 percent, depending on what they bought; on how consumers would choose coverage—through a state-based purchasing pool, but, according to the AP, only if you are self-employed or own a small business; and so on. Most everyone must carry insurance, and fines for not doing so could be steep—as much as $3800 per year for a family with incomes over $66,000.

The committee scotched the idea of a public option, referred to by the AP as a “government-run plan” (the Republican pejorative has stuck). Instead, it recommends non-profit, member-owned cooperatives that would compete with industry giants like WellPoint and Unitedhealthcare. That, too, should not surprise Baucus Watch readers.

For months, we caught the senator dropping hints galore that there would be no Medicare-like public plan. Employers, who had the committee’s ear, got off easy—they won’t be required to cover their workers, although businesses with more than fifty full-time workers would have to pay a fee if the government ends up subsidizing their employees’ insurance. More poor people would get Medicaid coverage, but not until 2014. Perhaps that’s because the committee couldn’t afford to give them coverage right away. No word on what those folks should do if they get sick in the meantime.

AP readers might get the gist of Baucus’s plan while still not understanding what it actually means. For example, the AP story pointed out that there would be “no denial of coverage based on pre-existing conditions.” Well, yes, but there’s more to it than that.

Here’s where Maggie Mahar comes in. In her Health Beat blog yesterday, Mahar probed what she called “a gift to the for-profit insurance companies.” Turns out that Baucus and committee would require companies to insure even the very sickest, but would allow them to charge rates that are five times higher if they are older. For weeks, we have been noting that age rating is a proxy for medical underwriting, and that insurers would get their pound of flesh one way or another.

Mahar points out that the Baucus plan will not require people to have coverage if they can’t afford it and don’t qualify for subsidies. Massachusetts does the same thing the same thing under its health reform law. Fine—no penalty. But what about coverage for all those people in their fifties and early sixties, who need insurance at a time when ailments tend to surface? Most likely a good number won’t buy it because it’s too pricey.

There’s much more in the Baucus plan. Let’s keep reporting it out as the plan makes its way to a committee vote in the next week or so, and on to the Senate floor.

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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.