Baucus bill cost questioned
Lawmakers hope to ease burden of health reform
WASHINGTON – 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 would seek to change the legislation to ease that potential burden.
The Baucus plan is the product of a yearlong 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.
Some Senate Democrats along with a key moderate Republican, Sen. Olympia Snowe of 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 Grassley of Iowa, the ranking Republican on Baucus’ committee, is suggesting government assistance to insurance companies to help them control premium costs. And lawmakers in both parties are questioning whether Baucus’ 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 at $856 billion. Either way, it would be less than the $900 billion limit President Obama has set.
Another flashpoint among Democrats is the proposal to tax the insurance policies that cost more than $8,000 a year for individuals and $21,000 a year for families. Though the tax would affect only about 15 percent of policies, many of the beneficiaries are union employees who have bargained away wages in exchange for more generous health coverage.
House Speaker Nancy Pelosi, D-Calif., said she is concerned that the cost of any excise tax would be passed on to consumers and would harm many middle-class households. But she did not reject the idea.
“I think if that is to be the model, we have to see at what cost to the person who is insured,” she said.