Health Compromise Floated Before Obama Speech

Below are excerpts from a NY times article on Sen. Baucus' health care reform compromise. I've edited the article to highlight what Baucus' plan would do, what it wouldn't and what it will cost.

The article as usual does not get into the essential issues- I'll list them again as I see them:
1) payment reform based on quality and episodes of care (rather than fee reimbursement)
2) elimination of individual underwriting and pre-existing conditions
3) requirement to institute LEAN manufacturing techniques to eliminate waste


The article does however layout the essentials of Baucus' compromise-
- no public option, instead using state-based non-profit co-ops
- expansion of Medicaid for low-income uninsured individuals
- lower benefit coverage for those under age 25 without coverage
- fees and additional reporting requirements for insurers

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Health Compromise Floated Before Obama Speech

By JACKIE CALMES and ROBERT PEAR
The New York Times
Published: September 7, 2009
WASHINGTON —
As President Obama and top advisers drafted his eagerly awaited health care speech to Congress, new details emerged Monday about fees and coverage limits under a proposal being floated by the chairman of a crucial Senate committee.
The proposal from the lawmaker, Senator Max Baucus, who heads the Finance Committee, would impose new fees on some sectors of the health care industry, but none on individuals, to help offset initial costs estimated at $880 billion over 10 years, according to officials familiar with the outline.
The plan would:
offer the option of lower-cost insurance, with protection only against the costs of catastrophic illnesses, to those 25 and younger.
provide basic Medicaid coverage to millions of low-income people who are currently ineligible for the program, but the benefits would be less comprehensive than standard Medicaid.
The plan will not be a government-run insurance plan, or include a “public option,” to compete against private insurers.
Solution: Instead, his committee’s group of negotiators has coalesced around the idea of forming nonprofit, member-owned insurance cooperatives in the states.
Republicans oppose the public option, calling it an invitation to a health care system run entirely by the government, and some moderate-to-conservative Democrats are leery as well.

To help pay for his plan:Mr. Baucus would impose fees of $6 billion a year on insurance companies, $4 billion a year on manufacturers of medical devices and $750 million a year on clinical laboratories.
Mr. Baucus has apparently dropped the idea of requiring Medicare beneficiaries to pay 20 percent of the amounts charged for laboratory tests. That will allow him to say his plan does not directly increase costs to beneficiaries.
Mr. Baucus’s proposal would offer low-cost catastrophic insurance as an option for people 25 and younger. Policy experts say many people in this age group cannot afford comprehensive coverage or see no need for it.

“Mr. Baucus’s plan would also expand Medicaid, starting in 2014, to cover millions of low-income people, including many childless adults who never qualified before. Benefits offered to such newly eligible adults would generally be less generous than the comprehensive benefits available to other Medicaid recipients.
For years, governors have wanted more discretion to tailor Medicaid benefits to the needs of different population groups. But Jocelyn A. Guyer, co-executive director of the Center for Children and Families at Georgetown University, expressed concern. “Low-income people without children tend to have extensive health care needs — higher rates of mental illness, physical disability and chronic conditions,” she said.

Mr. Baucus’s proposal would also require health insurance companies to report the proportion of premium dollars spent on things other than medical care. Hospitals would be required to list standard charges for all services.
The information could be useful to consumers. But insurance companies say the data on their expenses can be misleading because the costs of some activities that benefit patients, like “disease management” and the use of health information technology, may be classified as administrative rather than medical.