Baucus Measure Would Expand Care Without Adding to Deficit

Senate Finance Committee Chairman Max Baucus (D-Mont.) outlines his 10-year, $856 billion health-care bill that he unveiled Wednesday. Video by The Washington Post
By Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Thursday, September 17, 2009

A year-long effort by senators to draft a bipartisan overhaul of the nation's health-care system on Wednesday yielded the only congressional proposal that would extend coverage to millions of uninsured Americans while making good on President Obama's pledge not to add "one dime" to budget deficits.

But the $774 billion proposal has not attracted any Republican support and has drawn a lukewarm response from Democrats, who say it would require many people to buy insurance policies they cannot afford.

What some lawmakers view as stingy, however, others called laudably frugal: The nonpartisan Congressional Budget Office forecast that the plan would generate more than enough cash to expand coverage to nearly 30 million more Americans, reducing budget deficits by nearly $50 billion over the next decade and by even more after that -- a goal Obama and other Democrats have set as one of the most critical objectives of health-care reform.

Senate Finance Chairman Max Baucus (D-Mont.), the plan's sponsor, hailed it as "one of the largest pieces of social legislation in the history of our country since the Depression" and said it represents "a balanced and common-sense" approach to health-care reform that can pass Congress by the end of the year.

But after working for months on the package with three Republicans and two Democrats -- the "Gang of Six" -- Baucus stood alone at the lectern when he announced it to reporters, and he acknowledged that the full Finance Committee may substantially revise the legislation.

The White House underscored that point. Press secretary Robert Gibbs on Wednesday called the proposal "an important building block [that] gets us closer to comprehensive health reform," Obama's signature domestic initiative, but he added that the White House expects that "Republicans, certainly, on the committee will offer amendments to change the bill."

Although she decided not to endorse the measure, Sen. Olympia J. Snowe (Maine), a moderate Republican, insisted that prospects for a bipartisan deal are not dead.

"Those of us as members of the bipartisan Group of Six fully intend to keep meeting, moving forward and continuing to work with the Chairman during the committee process," Snowe said Wednesday in a statement, "toward crafting a bill that I, and hopefully other Republican members of the Finance Committee, can support."

Baucus's proposal would dramatically expand eligibility for Medicaid, the government health-care program that covers the poor. It would also set up a new system of insurance "exchanges," where millions of people without access to affordable coverage through an employer could find high-quality insurance at rates heavily subsidized by the federal government.

In a preliminary analysis, the CBO said the package would cover 94 percent of Americans by 2019, leaving 25 million people uninsured -- a third of them illegal immigrants who would not be eligible to participate in the exchanges.

To pay for expanding coverage, Baucus proposes cutting payments to hospitals and other providers that serve recipients of Medicare, the federal health-care program for the elderly, and to tax, for the first time, the nation's most generous health insurance policies. The package also would impose $93 billion in fees on insurance companies, drugmakers and other sectors of the health-care industry. And it would collect nearly $50 billion in penalties from people who do not obtain health insurance and employers who do not offer their workers affordable options for coverage.

Because the value of those provisions would grow faster than the cost of expanding coverage, the package would reduce budget deficits now and in the foreseeable future, the CBO said. But CBO Director Douglas W. Elmendorf cautioned in a letter to Baucus that "the long-term budgetary impact could be quite different" if lawmakers found a way to short-circuit the most painful provisions, as Congress has done repeatedly in the past.

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