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Baucus Urges GOP to Support His $900B Health Reform Bill

By Shailagh Murray
Washington Post Staff Writer
Monday, September 7, 2009 4:28 PM

Senate Finance Committee Chairman Max Baucus is urging three Republican colleagues to sign off on the $900 billion health-care reform package they have helped to negotiate over the past two months, in order to add a bipartisan proposal to the mix before President Obama's speech to Congress on Wednesday.

The Baucus plan, circulating among the Finance Committee's "Gang of Six" this weekend, sets forth provisions that have already gained the bipartisan group's unofficial support and adds nothing that the group has not already deliberated, senior Senate aides said. But Democrats are wary that two of the three GOP negotiators -- Sens. Charles E. Grassley (Iowa) and Mike Enzi (Wyo.) -- could walk away, under pressure from their Republican colleagues to allow Democrats to fight for a bill on their own.

Two of the Baucus measures reflect the group's long-standing goal to find common ground on highly contentious issues. Instead of a government-run insurance option, the Baucus proposal would create a network of nonprofit cooperatives -- an alternative that Grassley, the lead Republican negotiator, has backed.

The Baucus proposal also would levy a tax on insurance companies that offer the most expensive insurance plans, a move that would raise around $180 billion over the next 10 years. Negotiators had discussed directly taxing people who receive high-cost plans through their employers -- benefits that currently are tax-free -- but settled on taxing insurance companies as a more politically palatable alternative.

In either form, the tax is aimed at persuading insurers to stop offering high-cost plans and workers to stop choosing them, a change that economists believe would divert money from the nation's bloated health-care system and channel it into higher wages for workers. While many Democrats and Republicans in the Senate have endorsed the idea, it remains unpopular in the House, in part because union households are among the beneficiaries of the so-called "Cadillac" health plans. The levy also could violate an Obama campaign pledge not to increase taxes on families earning less than $250,000 a year.

In addition, Baucus would seek to raise a smaller amount by imposing a fee on all health insurance companies according to their market share -- a measure intended to extract some sacrifice from an industry that stands to gain 46 million new customers. Baucus proposes a variety of mechanisms to enhance competition and transparency to ensure that the firms do not simply pass the fee through to their customers.

White House spokesman Robert Gibbs told reporters Monday: "Obviously we'd be pleased if the Finance Committee, throughout the course of the next few days, came up with a proposal that can get through their committee, hopefully with bipartisan support." But he added that Obama's speech will "pull together the strands of many different pieces of legislation to come up with a plan that improves health care for all Americans."

At less than $900 billion, the Finance Committee bill would cost at least $100 billion less than other legislation on the table, including the $1.04 trillion, 10-year House bill. Senate aides familiar with the package said it would succeed in "bending the cost curve" downward over time, ultimately making health care more affordable for businesses, individuals and the government, while reducing the federal deficit within 10 years. Specific cost estimates were not provided.

In addition to the fee on high-cost plans, the proposal also would extract about $400 billion in cost savings from Medicare, cuts that are stirring unease among lawmakers in both parties because of the potential backlash among senior citizens and Medicare's precarious fiscal state.

A summary of the Baucus proposal said it "dramatically increases the focus on and coverage of prevention and wellness programs" and "begins the shift of health care delivery to the quality of care provided, not the quantity of services rendered, which will result in higher quality patient care." It also would seek to reform the insurance market to protect people with preexisting conditions and to limit out-of-pocket costs. It would prevent insurance companies from discriminating against individuals based on their health or demographic profile, and from capping coverage.

Under Baucus's plan, Medicaid would be expanded to cover all individuals -- except illegal immigrants -- who make up to 133 percent above the current federal poverty level. It also would provide tax credits to help low- and middle-income families purchase private insurance coverage, and would set up health insurance exchanges so small-business workers and other individuals whose employers don't provide health coverage could select from a menu of plans.

The package reflects the numerous areas of agreement among the Gang of Six, sources who have reviewed it said, and Baucus is assuring his colleagues that it is not a final product. He intends to seek suggestions for changes when the group meets Tuesday, one day before the Obama address. If the Baucus group does not produce a plan, Democratic Senate sources have warned, the Finance Committee may be bypassed.

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