Major Health-Care Reform Challenge Is Affordability

Sen. Charles E. Grassley (R-Iowa) is suggesting government assistance to insurance companies to help them control premium costs.
Sen. Charles E. Grassley (R-Iowa) is suggesting government assistance to insurance companies to help them control premium costs. (By Melina Mara -- The Washington Post)
By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Friday, September 18, 2009

Lawmakers in both parties raised concerns Thursday that the health-care reform bill offered by Senate Finance Chairman Max Baucus a day earlier would impose too high a cost on middle-class Americans and said they will seek to change the legislation to ease that potential burden.

The Baucus plan is the product of a year-long effort to find a middle ground between the expansion of government-run health care that liberal Democrats are seeking and the private insurance overhaul that many Republicans favor. But with finance panel members on both sides expressing concerns about the Baucus draft, major revisions could come through amendments in committee and on the Senate floor and in final negotiations with the House.

How to make insurance more affordable to the estimated 30 million uninsured people who would be required to buy coverage under the Baucus proposal is emerging as a central challenge as the long-awaited plan advances to full committee debate Tuesday. Democrats and Republicans alike worry that a bill intended to address one source of financial hardship -- the skyrocketing cost of health care -- could lead to another, in the form of hefty premiums.

"It's very clear that the driving issue of this debate is affordability, particularly for middle-class folks. And the Democratic caucus is very much committed to getting this issue right," said Sen. Ron Wyden (D-Ore.), a Finance Committee member who said he will offer amendments next week in an effort to improve affordability and choice.

Some Senate Democrats, along with a key moderate Republican, Sen. Olympia J. Snowe (Maine), are now discussing ways to increase assistance for individuals and families who could face premium costs of up to $15,000 per year by 2016. Sen. Charles E. Grassley (Iowa), the ranking Republican on Baucus's committee, is suggesting government assistance to insurance companies to help them control premium costs. And lawmakers in both parties are questioning whether Baucus's main revenue source, an excise tax on insurance companies for their most generous insurance policies, would simply be passed on to consumers.

"They're legitimate concerns," said Baucus (D-Mont.). "I'm going to try to address them." But he added: "It's important to realize, compared to what? Today, insurance policies are so expensive, people tend to forget that, hey, this is a big improvement over the status quo."

The trick is to maintain the fiscal balance -- lowering the deficit over time -- that may be the Baucus bill's greatest selling point, as Democratic House and Senate leaders begin the arduous task of fusing five legislative efforts into a single final bill. The nonpartisan Congressional Budget Office estimates the Baucus proposal would spend $774 billion over the next decade to expand insurance coverage, while Baucus puts the cost of the entire package at $856 billion. Either way, it would be less than the $900 billion limit President Obama has set.

As his health-care overhaul slowly moves through Congress without Republican support, Obama turned to a solidly young, liberal audience on Thursday morning, rallying students at the University of Maryland to help him face the "defining struggle of this generation."

"When you're young, I know this isn't always an issue that you have at the top of your mind," he said at the university's Comcast Center. "You think you're invincible. That's how I thought."

Obama sought to ease concerns among young adults, who are now among the least likely to purchase health insurance, but who would be required to do so under the Baucus plan. Healthy 20-somethings are key to successful reform, because their payments to insurance companies would offset the costs of care for older adults.

The White House has endorsed one approach to covering more young people: allowing them to stay on their parents' insurance until age 26. Baucus chose a different approach, proposing the creation of a cheaper policy, one covering only the most dire and expensive medical emergencies, that would be offered exclusively to the same age group.

When Obama mentioned Baucus's bill Thursday, members of the crowd booed. Although moderate Democrats have expressed support for the proposal, liberal Democrats are disappointed that the senator rejected the idea of creating a government-run insurance plan to compete with private firms, and that his plan might force people to buy insurance without providing an adequate safety net.

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