Insuring Resources Commentary:
I have shared with readers recently my thoughts and numerous reports that suggest the health care reform bills under consideration would raise insurance premiums and not curtail the increases we've seen in health care costs.
In contrast, the report below argues that the health care reform bills will cut costs and lead to job growth.
Here's my analysis of their review:
This article lacks details but here is the full length report if you're interested:
http://www.americanprogress.org/issues/2010/01/pdf/health_care_jobs.pdf
***Note: I took items 1 and 2 below from the full length report***
For me, it is hard to believe that the taxes on cadillac health plans will have a positive effect so I agree with the Heritage Foundation on that point, as the article shows their viewpoint below. In addition the phased in penalties for businesses with payrolls over $500,000 annually could be a huge detriment to job growth in the all-important small business sector. The phased-in penalties will be key. If they are properly indexed they should have little effect, but if the penalties do not follow incremental and appropriate steps, the effect could be harsh for small business job growth.
In looking at the full length study here are some of the findings:
1) The study estimates that "insurance exchanges should lower average employer-paid premiums by about 2 percent".
2)"Aspects of the health reform legislation now before Congress that would promote more efficient care include bundling payments for different health care providers to encourage practice of more coordinated care, increased use of pay-for-performance systems for providers rather than the pay-per-visit system used by most insurers, and greater funding to support health care transitions, such as between hospitals and outpatient care, and for so-called medical homes, a primary care model that emphasizes coordinated care for the patient. These reforms would initially be implemented within the Medicare program, but are expected to extend to privately insured patients as reforms take hold, as has happened in the past."
The authors estimate cost reductions from these initiatives of about 0.75 percentage points annually after a phase-in period, or 6 percent by 2019. "Other work suggests savings as high as 1.5 percentage points annually are feasible. These cost reductions will enable employers who gain from these increased efficiencies to hire more workers and enable employees to seek higher wages as rising health care costs slow down."
My Final analysis: The authors acknowledge that the bundling cost savings an other reforms begin in Medicare, but they expect that they will be expanded to the rest of the health care system "as has happened in the past."
Here's the problem-- we have no idea when or if that will happen BECAUSE there is no timeframe for it in the bill. Saying it will happen is wishful thinking at best.
As I've argued from the beginning of this blog in August: payment reform and incentivizing lean processes is essential now for the whole system. Voluntary, Medicare programs will not get it done.
Details below from the Harvard/ USC study
--------------------------------
Healthcare overhaul could save money and boost jobs, researchers say
In a report to be released January 8, 2010, Harvard and USC economists say legislation being considered would slow cost increases and free up money for companies to raise wages and hire more workers.
National healthcare legislation in Congress could slow the growth of medical costs, allowing employers to create 250,000 to 400,000 new jobs a year over the next decade, economists from Harvard University and USC are predicting.
Wading into the hotly debated issue of whether the legislation is a job creator or a job killer, researchers from the two universities say that the reforms under consideration would slow the rate of cost increases and free up money for companies to raise wages and hire more workers.
Specifically, healthcare savings could be achieved through proposals for greater competition in insurance markets, better coordination of care and shrinking administrative expenses, they said in a report to be released today. With those changes, employers could then reallocate money now spent on ever-growing premiums to other business priorities.
"We could achieve huge productivity gains," said Harvard economist David Cutler, one of the study's authors and a senior fellow at the Center for American Progress, a liberal think tank.
But conservative economists and many business leaders contend that the proposed legislation would drive up costs by imposing billions of dollars in new taxes and penalties, killing jobs and hurting the economy as the financial burden of healthcare shifts to employers and workers.
One analysis from the conservative Heritage Foundation determined that higher taxes levied on the wealthiest Americans -- a proposal in the healthcare bill approved by the House in November -- would eliminate more than 450,000 jobs over the next decade.
The foundation and other critics of the healthcare overhaul say such taxes would have a particularly harmful effect on small businesses, which operate on smaller margins but have historically played key roles in renewing economic growth after recessions.
"If small businesses are not hiring, you'll have higher unemployment and slower wage growth," said Rea Hederman Jr., a senior policy analyst at the foundation.
Several California employers said they found the Harvard-USC study hard to believe, given that the average employer has paid double-digit annual increases in insurance premiums for several years and experienced other escalating business costs.
Santa Monica attorney Jeffrey Lee Costell, for one, says he will probably hold off hiring additional clerical workers if provisions remain in the healthcare legislation that require companies like his -- those with payrolls exceeding $500,000 -- to pick up the bulk of insurance premiums or face penalties.
"It's going to have a chilling effect," Costell said. "We're getting penalized because we are productive entrepreneurs."
Members of Congress are preparing to hash out a compromise between House and Senate healthcare bills. The measures would, among other things, require most Americans to have health insurance, expand coverage for the poor and stop insurers from denying coverage for preexisting conditions.
The bills also would impose billions of dollars in new taxes on the insurance industry, with the Senate bill including the "Cadillac tax" on more expensive healthcare plans.
The Harvard-USC report could be a boost for President Obama, who has made the economic benefits of health reform a top selling point in his administration's efforts to forge public support for the overhaul.
The president's Council of Economic Advisors said healthcare reform would increase domestic growth, raising family incomes substantially and leading to significant new hiring.
The Harvard-USC economists concluded that industries with high rates of employer-sponsored insurance -- including manufacturing, utilities and financial services -- would see some of the largest employment gains.
"If you have a strong bill that will promote control of healthcare costs, there will be an effect on the number of jobs," said Neeraj Sood, director of international programs at USC's Schaeffer Center for Health Policy and Economics.
How to achieve the savings remains a matter of heated debate in Congress and other quarters. Insurance industry executives maintain that reining in premiums without also addressing surging costs of hospitals and doctors will do little to stem medicine's drag on the economy.
"Unless you have the entire system reduce costs, you won't get premium relief," said Jay Gellert, chief executive of Woodland Hills-based Health Net Inc.
Relief can't come soon enough for San Francisco business owner Scott Hauge, who has seen health premiums for his 30-employee insurance brokerage rise 14% annually over the last seven years.
Hauge, president of advocacy group Small Business California, said he didn't expect much relief from Congress -- at best a slowdown in his costs, as the Harvard-USC economists predict. He said he might use any savings to replace computers, to pay employee bonuses or perhaps to help pick up insurance costs.
He is closely watching the legislation in Congress but can't get any firm sense of how the healthcare overhaul would affect his bottom line.
"There are a whole lot of unknowns out there right now," he said.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Sunday, January 10, 2010
Thursday, November 19, 2009
Senate, House Democratic Health Bills Compared
Stay tuned for Insuring Resources Commentary soon.
.... in the meantime see an analysis below courtesy of the Associated Press
--------------------- ---------------------------
Senate, House Democratic Health Bills ComparedAssociated Press
November 19, 2009
A comparison of the health care bills before Congress:
The Senate Democratic bill (Patient Protection and Affordable Care Act):
WHO'S COVERED: About 94 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2014. Illegal immigrants would not receive assistance.
COST: Coverage provisions cost $849 billion over 10 years.
HOW IT'S PAID FOR: Fees on insurance companies, drugmakers, medical device manufacturers. Medicare payroll tax increased to 1.95 percent on income over $200,000a year for individuals; $250,000 for couples. New 5 percent tax on elective cosmetic surgery. Cuts to Medicare and Medicaid. Excise tax on insurance companies, keyed to premiums paid on health care plans costing more than $8,500 annually for individuals and $23,000 for families. Fees on employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage.
REQUIREMENTS FOR INDIVIDUALS: Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. Those who are obligated to buy coverage and refuse to do so would pay a fine starting at $95 in 2014 and rising to $750.
REQUIREMENTS FOR EMPLOYERS: Not required to offer coverage, but medium and large companies would pay a fee if the government ends up subsidizing employees' coverage.
SUBSIDIES: Tax credits for individuals and families likely making up to 400 percent of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers.
BENEFITS PACKAGE: All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage: The least generous would pay an estimated 60 percent of health care costs per year; the most generous would cover an estimated 90 percent.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2014: no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age and family size. Starting upon enactment of legislation: children up to age 26 can stay on parents insurance; no lifetime limits on coverage.
GOVERNMENT-RUN PLAN: A new federal insurance plan would be offered to compete against private carriers. The government would negotiate -- not dictate -- payment rates for medical providers. Unlike the House bill, states could opt out of the plan. It's not clear the proposal commands enough votes to survive, and it could be replaced by a standby system pushed by moderates that would not go into effect until it was clear individual states were experiencing a lack of competition among private companies.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Self-employed people, uninsured individuals and small businesses could pick a plan offered through new state-based purchasing pools. Employees would be generally encouraged to keep their work-provided coverage.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Drug companies contribute $80 billion over 10 years with the majority of the money used to limit the prescription coverage gap in Medicare.
CHANGES TO MEDICAID: Income eligibility levels likely to be standardized to 133 percent of poverty, which is $29,327 a year for a family of four, for all parents, children and pregnant women. Federal government would pick up the full cost of the expansion during the first three years. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Amendment expected to be offered on the Senate floor to strip the health insurance industry of its antitrust exemption.
____
The House bill (Affordable Health Care for America Act):
WHO'S COVERED: About 96 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2013. About one-third of the remaining 18 million people under age 65 left uninsured would be illegal immigrants.
COST: The Congressional Budget Office says the bill's cost of expanding insurance coverage over 10 years is $1.055 trillion. The net cost is $894 billion, factoring in penalties on individuals and employers who don't comply with new requirements. That's under President Barack Obama's $900 billion goal. However, those figures leave out a variety of new costs in the bill, including increased prescription drug coverage for seniors under Medicare, so the measure may be around $1.2 trillion.
HOW IT'S PAID FOR: $460 billion over the next decade from new income taxes on single people making more than $500,000 a year and couples making more than $1 million. The original House bill taxed individuals making $280,000 a year and couples making more than $350,000, but the threshold was increased in response to lawmakers' concerns that the taxes would hit too many people and small businesses.
There are also more than $400 billion in cuts to Medicare and Medicaid; a new $20 billion fee on medical device makers; $13 billion from limiting contributions to flexible spending accounts; sizable penalties paid by individuals and employers who don't obtain coverage; and a mix of other corporate taxes and fees.
REQUIREMENTS FOR INDIVIDUALS: Individuals must have insurance, enforced through a tax penalty of 2.5 percent of income. People can apply for hardship waivers if coverage is unaffordable.
REQUIREMENTS FOR EMPLOYERS: Employers must provide insurance to their employees or pay a penalty of 8 percent of payroll. Companies with payrolls under $500,000 annually are exempt -- a change from the original $250,000 level to accommodate concerns of moderate Democrats -- and the penalty is phased in for companies with
payrolls between $500,000 and $750,000.
Small businesses -- those with 10 or fewer workers -- get tax credits to help them provide coverage.
SUBSIDIES: Individuals and families with annual income up to 400 percent of poverty level, or $88,000 for a family of four, would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Beginning in 2013 through a new Health Insurance Exchange open to individuals and, initially, small employers. It could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules.
BENEFITS PACKAGE: A committee would recommend a so-called essential benefits package including preventive services. Out-of pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2013, no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age.
GOVERNMENT-RUN PLAN: A new public plan available through the insurance exchanges would be set up and run by the secretary of Health and Human Services. Democrats originally designed the plan to pay Medicare rates plus 5 percent to doctors. But the final version -- preferred by moderate lawmakers -- would let the HHS secretary negotiate rates with providers.
CHANGES TO MEDICAID: The federal-state insurance program for the poor would be expanded to cover all individuals under age 65 with incomes up to 150 percent of the federal poverty level, which is $33,075 per year for a family of four. The federal government would pick up the full cost of the expansion in 2013 and 2014; thereafter the federal government would pay 91 percent and states would pay 9 percent.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Phases out the gap in Medicare prescription drug coverage by 2019. Requires the HHS secretary to negotiate drug prices on behalf of Medicare beneficiaries.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price-fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.
.... in the meantime see an analysis below courtesy of the Associated Press
--------------------- ---------------------------
Senate, House Democratic Health Bills ComparedAssociated Press
November 19, 2009
A comparison of the health care bills before Congress:
The Senate Democratic bill (Patient Protection and Affordable Care Act):
WHO'S COVERED: About 94 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2014. Illegal immigrants would not receive assistance.
COST: Coverage provisions cost $849 billion over 10 years.
HOW IT'S PAID FOR: Fees on insurance companies, drugmakers, medical device manufacturers. Medicare payroll tax increased to 1.95 percent on income over $200,000a year for individuals; $250,000 for couples. New 5 percent tax on elective cosmetic surgery. Cuts to Medicare and Medicaid. Excise tax on insurance companies, keyed to premiums paid on health care plans costing more than $8,500 annually for individuals and $23,000 for families. Fees on employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage.
REQUIREMENTS FOR INDIVIDUALS: Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. Those who are obligated to buy coverage and refuse to do so would pay a fine starting at $95 in 2014 and rising to $750.
REQUIREMENTS FOR EMPLOYERS: Not required to offer coverage, but medium and large companies would pay a fee if the government ends up subsidizing employees' coverage.
SUBSIDIES: Tax credits for individuals and families likely making up to 400 percent of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers.
BENEFITS PACKAGE: All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage: The least generous would pay an estimated 60 percent of health care costs per year; the most generous would cover an estimated 90 percent.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2014: no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age and family size. Starting upon enactment of legislation: children up to age 26 can stay on parents insurance; no lifetime limits on coverage.
GOVERNMENT-RUN PLAN: A new federal insurance plan would be offered to compete against private carriers. The government would negotiate -- not dictate -- payment rates for medical providers. Unlike the House bill, states could opt out of the plan. It's not clear the proposal commands enough votes to survive, and it could be replaced by a standby system pushed by moderates that would not go into effect until it was clear individual states were experiencing a lack of competition among private companies.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Self-employed people, uninsured individuals and small businesses could pick a plan offered through new state-based purchasing pools. Employees would be generally encouraged to keep their work-provided coverage.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Drug companies contribute $80 billion over 10 years with the majority of the money used to limit the prescription coverage gap in Medicare.
CHANGES TO MEDICAID: Income eligibility levels likely to be standardized to 133 percent of poverty, which is $29,327 a year for a family of four, for all parents, children and pregnant women. Federal government would pick up the full cost of the expansion during the first three years. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Amendment expected to be offered on the Senate floor to strip the health insurance industry of its antitrust exemption.
____
The House bill (Affordable Health Care for America Act):
WHO'S COVERED: About 96 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2013. About one-third of the remaining 18 million people under age 65 left uninsured would be illegal immigrants.
COST: The Congressional Budget Office says the bill's cost of expanding insurance coverage over 10 years is $1.055 trillion. The net cost is $894 billion, factoring in penalties on individuals and employers who don't comply with new requirements. That's under President Barack Obama's $900 billion goal. However, those figures leave out a variety of new costs in the bill, including increased prescription drug coverage for seniors under Medicare, so the measure may be around $1.2 trillion.
HOW IT'S PAID FOR: $460 billion over the next decade from new income taxes on single people making more than $500,000 a year and couples making more than $1 million. The original House bill taxed individuals making $280,000 a year and couples making more than $350,000, but the threshold was increased in response to lawmakers' concerns that the taxes would hit too many people and small businesses.
There are also more than $400 billion in cuts to Medicare and Medicaid; a new $20 billion fee on medical device makers; $13 billion from limiting contributions to flexible spending accounts; sizable penalties paid by individuals and employers who don't obtain coverage; and a mix of other corporate taxes and fees.
REQUIREMENTS FOR INDIVIDUALS: Individuals must have insurance, enforced through a tax penalty of 2.5 percent of income. People can apply for hardship waivers if coverage is unaffordable.
REQUIREMENTS FOR EMPLOYERS: Employers must provide insurance to their employees or pay a penalty of 8 percent of payroll. Companies with payrolls under $500,000 annually are exempt -- a change from the original $250,000 level to accommodate concerns of moderate Democrats -- and the penalty is phased in for companies with
payrolls between $500,000 and $750,000.
Small businesses -- those with 10 or fewer workers -- get tax credits to help them provide coverage.
SUBSIDIES: Individuals and families with annual income up to 400 percent of poverty level, or $88,000 for a family of four, would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Beginning in 2013 through a new Health Insurance Exchange open to individuals and, initially, small employers. It could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules.
BENEFITS PACKAGE: A committee would recommend a so-called essential benefits package including preventive services. Out-of pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2013, no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age.
GOVERNMENT-RUN PLAN: A new public plan available through the insurance exchanges would be set up and run by the secretary of Health and Human Services. Democrats originally designed the plan to pay Medicare rates plus 5 percent to doctors. But the final version -- preferred by moderate lawmakers -- would let the HHS secretary negotiate rates with providers.
CHANGES TO MEDICAID: The federal-state insurance program for the poor would be expanded to cover all individuals under age 65 with incomes up to 150 percent of the federal poverty level, which is $33,075 per year for a family of four. The federal government would pick up the full cost of the expansion in 2013 and 2014; thereafter the federal government would pay 91 percent and states would pay 9 percent.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Phases out the gap in Medicare prescription drug coverage by 2019. Requires the HHS secretary to negotiate drug prices on behalf of Medicare beneficiaries.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price-fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.
Thursday, September 17, 2009
Dems and GOP Agree- Baucus bill appears to be DOA
I guess Sen. Baucus has achieved what few others have. He's gotten Democrats and Republicans to agree... this is a horrible healthcare bill... except for widely different reasons.
Republicans are against tax increases (even though there is no employer mandate) and subsidizing "socialist" care for the poor. On the second point, I guess they still don't understand Medicare and Medicaid. On the first point, Baucus caves to their whims and still they're unhappy.
Many Democrats don't like that he didn't incorporate a true public plan, among numerous other issues which are far too lengthy to list.
Disabilities
In my own read of the 223 page bill I was dumbfounded to see no discussion or improvements on health care for people with disabilities. Apparently reform is discrminatory just like health care itself, and we're suppose to keep disabled folks in a separate health care program (Medicaid) that for the most part doesn't provide integrated care or care about quality with no serious ideas for improvement. Apparently Sen. Baucus doesn't want to improve health outcomes since he included yet another pilot Medical Home project. We've had enough of small-time pilots, medical homes work, they should be the essence of the program, not an underfunded, low enrollment step-sister.
By the way, Baucus decides to cut Medicare and Medicaid by $500 billion ovet the next 10 years to help pay for the expanded uninsured coverage. That's what I mean about discrimination.
The only substantial (I hesitate to even call it that) disability item is continued funding of a great idea- Aging and Disability Resource Centers- in the amount of $10 million for an additional five years.
Waste? Baucus says let's Demonstrate and Pilot, Not Fix it On the subject of reducing waste and cutting costs, there is virtually nothing substantial. For in depth analysis of those proposals go to this blog at the Center for Health Care Value- http://www.createhealthcarevalue.com/blog/post/?bid=104
Baucus proposes Medicare demonstrations and volunteer provider programs with incentives to "study" the potential of waste reduction. discussion around incentivizing providers to eliminate waste and practice efficiently. On this point I actually agree with Republican Sen. Enzi, not that he's proposed an alternative to achive cost efficiency. Again, on this point Baucus provides pilots.
On Co-ops- Sen. Rockefeller (D-W.V.) says thay are "untested and unsubstantiated." He's wrong. Wisconsin alone has three very successful coops in existence and there are dozens of others in the U.S. Its amazing how many components of this our legislators (on both sides) simply do not understand. The Co-ops proposed by Baucus must be integrated models so at least he got that right. What he gest wrong though is that integrated models should be used nation-wide with incentives given for providers and health plans to implement them.
If enacted, this bill in present form will make the system more costly than what we have today.
--------------- -------------------- -----------------
From today's Milwaukee Journal Sentinel
Washington — Senate Finance Committee Chairman Max Baucus' $856 billion plan to overhaul the nation's health care system - a package that lacks the public option that President Barack Obama favors - was greeted Wednesday largely with skepticism and sometimes disdain, even among fellow Democrats.
His package, which would create health care co-ops, raise taxes on insurers and require companies to offer coverage to nearly everyone, is the latest effort to find bipartisan agreement on Obama's top domestic priority.
For months, the Democratic senator from Montana and five other committee members, three from each party, struggled to craft bipartisan legislation. They finally gave up, and Baucus went his own way.
He still worked Wednesday to woo Republican support, but only Sen. Olympia Snowe (R-Maine) seemed hopeful. "The bill is a work in progress," she said.
More typical was the view of Sen. Michael Enzi of Wyoming, the top Republican on the Senate Health Committee, who said he was "deeply disappointed" that the group of six, of which he was one, couldn't agree.
"The proposal released today still spends too much and it does too little to cut health care costs for those with health insurance," he said.
Four other committees - three in the House and the Senate health panel - have written health care bills. All were authored almost entirely by Democrats, and all back a "public option."
Baucus thinks that such a plan can't pass the Senate. He stressed Wednesday that he made compromises aimed at winning passage.
The biggest change from the other bills is the co-op idea, which veers away from Obama's plea to include a public option.
Instead, Baucus proposed a system of co-ops that can operate at the state, regional or national level as nonprofit, member-run health plans. He proposed spending $6 billion in federal money to get them started.
Supporters of co-ops maintain that negotiating rates with hospitals, doctors and other providers collectively would reduce health care costs, "without putting the government in charge of health care," as Sen. Kent Conrad (D-N.D.), another one of the group of six, put it. He estimated that Baucus' plan would cover about 94% of Americans.
Many not happy
Many other Democrats and their supporters weren't pleased, however, and some were downright angry.
AFL-CIO President John Sweeney said the Baucus plan "absolutely fails to meet the most basic health care needs of working families."
Sen. Russ Feingold (D-Wis.) said, "My goals for health care reform include a strong public option, long-term care reform and reform of the Medicare reimbursement system that has disadvantaged Wisconsin for far too long. I am disappointed that the Finance Committee bill, as written, comes up short on all three fronts.
Sen. Jay Rockefeller of West Virginia, the second-ranking Democrat on the Finance Committee, branded co-ops "untested and unsubstantiated and should not be considered as a national model for health insurance."
House Speaker Nancy Pelosi (D-Calif.), issued a tersely worded statement. "The House bill clearly does more to make coverage affordable for more Americans and provides more competition to drive insurance companies to charge lower premiums and improve coverage," she said, adding that she looked forward to "modifications."
Pelosi made it clear what she wants: "I believe the public option is the best way to achieve that goal."
Others were more circumspect. At the White House, spokesman Robert Gibbs called the Baucus plan "an important building block," while Senate Majority Leader Harry Reid (D-Nev.) said, "Everyone should understand it's a beginning, a good beginning."
More reviews on tap
The Senate Finance Committee, which has 13 Democrats and 10 Republicans, is expected to finish writing its bill by the end of the month. It then would be combined with the Senate health committee measure and be considered by the full Senate.
At roughly the same time, the House is expected to vote on a consolidated bill melded from the three committee drafts. Then comes the hardest part: finding common ground between the House and Senate bills and producing one piece of legislation.
Baucus' proposal got one important boost Wednesday from the nonpartisan Congressional Budget Office and the bipartisan Joint Committee on Taxation.
Their preliminary analysis found that Baucus' plan would mean a net reduction in the deficit of $49 billion over the next 10 years, as new spending is offset by a combination of cuts in federal health programs, notably Medicare, as well as new taxes and fees.
Baucus proposes a nondeductible excise tax, starting in 2013, of 35% on insurance companies and plan administrators for any health insurance plan that charges more than $8,000 for individuals and $21,000 for families. The Joint Taxation Committee estimates that it would raise about $214.9 billion over 10 years.
The plan faces two instant hurdles: House Democratic leaders prefer an income tax surcharge on wealthy taxpayers, which would raise an estimated $544 billion over 10 years, and the House legislation has considerably less in Medicare savings.
And Republicans will oppose almost any tax increase. Senate Republican leader Mitch McConnell of Kentucky set the tone, saying the Baucus bill would "put massive new tax burdens on families and individuals."
Republicans are against tax increases (even though there is no employer mandate) and subsidizing "socialist" care for the poor. On the second point, I guess they still don't understand Medicare and Medicaid. On the first point, Baucus caves to their whims and still they're unhappy.
Many Democrats don't like that he didn't incorporate a true public plan, among numerous other issues which are far too lengthy to list.
Disabilities
In my own read of the 223 page bill I was dumbfounded to see no discussion or improvements on health care for people with disabilities. Apparently reform is discrminatory just like health care itself, and we're suppose to keep disabled folks in a separate health care program (Medicaid) that for the most part doesn't provide integrated care or care about quality with no serious ideas for improvement. Apparently Sen. Baucus doesn't want to improve health outcomes since he included yet another pilot Medical Home project. We've had enough of small-time pilots, medical homes work, they should be the essence of the program, not an underfunded, low enrollment step-sister.
By the way, Baucus decides to cut Medicare and Medicaid by $500 billion ovet the next 10 years to help pay for the expanded uninsured coverage. That's what I mean about discrimination.
The only substantial (I hesitate to even call it that) disability item is continued funding of a great idea- Aging and Disability Resource Centers- in the amount of $10 million for an additional five years.
Waste? Baucus says let's Demonstrate and Pilot, Not Fix it On the subject of reducing waste and cutting costs, there is virtually nothing substantial. For in depth analysis of those proposals go to this blog at the Center for Health Care Value- http://www.createhealthcarevalue.com/blog/post/?bid=104
Baucus proposes Medicare demonstrations and volunteer provider programs with incentives to "study" the potential of waste reduction. discussion around incentivizing providers to eliminate waste and practice efficiently. On this point I actually agree with Republican Sen. Enzi, not that he's proposed an alternative to achive cost efficiency. Again, on this point Baucus provides pilots.
On Co-ops- Sen. Rockefeller (D-W.V.) says thay are "untested and unsubstantiated." He's wrong. Wisconsin alone has three very successful coops in existence and there are dozens of others in the U.S. Its amazing how many components of this our legislators (on both sides) simply do not understand. The Co-ops proposed by Baucus must be integrated models so at least he got that right. What he gest wrong though is that integrated models should be used nation-wide with incentives given for providers and health plans to implement them.
If enacted, this bill in present form will make the system more costly than what we have today.
--------------- -------------------- -----------------
From today's Milwaukee Journal Sentinel
Washington — Senate Finance Committee Chairman Max Baucus' $856 billion plan to overhaul the nation's health care system - a package that lacks the public option that President Barack Obama favors - was greeted Wednesday largely with skepticism and sometimes disdain, even among fellow Democrats.
His package, which would create health care co-ops, raise taxes on insurers and require companies to offer coverage to nearly everyone, is the latest effort to find bipartisan agreement on Obama's top domestic priority.
For months, the Democratic senator from Montana and five other committee members, three from each party, struggled to craft bipartisan legislation. They finally gave up, and Baucus went his own way.
He still worked Wednesday to woo Republican support, but only Sen. Olympia Snowe (R-Maine) seemed hopeful. "The bill is a work in progress," she said.
More typical was the view of Sen. Michael Enzi of Wyoming, the top Republican on the Senate Health Committee, who said he was "deeply disappointed" that the group of six, of which he was one, couldn't agree.
"The proposal released today still spends too much and it does too little to cut health care costs for those with health insurance," he said.
Four other committees - three in the House and the Senate health panel - have written health care bills. All were authored almost entirely by Democrats, and all back a "public option."
Baucus thinks that such a plan can't pass the Senate. He stressed Wednesday that he made compromises aimed at winning passage.
The biggest change from the other bills is the co-op idea, which veers away from Obama's plea to include a public option.
Instead, Baucus proposed a system of co-ops that can operate at the state, regional or national level as nonprofit, member-run health plans. He proposed spending $6 billion in federal money to get them started.
Supporters of co-ops maintain that negotiating rates with hospitals, doctors and other providers collectively would reduce health care costs, "without putting the government in charge of health care," as Sen. Kent Conrad (D-N.D.), another one of the group of six, put it. He estimated that Baucus' plan would cover about 94% of Americans.
Many not happy
Many other Democrats and their supporters weren't pleased, however, and some were downright angry.
AFL-CIO President John Sweeney said the Baucus plan "absolutely fails to meet the most basic health care needs of working families."
Sen. Russ Feingold (D-Wis.) said, "My goals for health care reform include a strong public option, long-term care reform and reform of the Medicare reimbursement system that has disadvantaged Wisconsin for far too long. I am disappointed that the Finance Committee bill, as written, comes up short on all three fronts.
Sen. Jay Rockefeller of West Virginia, the second-ranking Democrat on the Finance Committee, branded co-ops "untested and unsubstantiated and should not be considered as a national model for health insurance."
House Speaker Nancy Pelosi (D-Calif.), issued a tersely worded statement. "The House bill clearly does more to make coverage affordable for more Americans and provides more competition to drive insurance companies to charge lower premiums and improve coverage," she said, adding that she looked forward to "modifications."
Pelosi made it clear what she wants: "I believe the public option is the best way to achieve that goal."
Others were more circumspect. At the White House, spokesman Robert Gibbs called the Baucus plan "an important building block," while Senate Majority Leader Harry Reid (D-Nev.) said, "Everyone should understand it's a beginning, a good beginning."
More reviews on tap
The Senate Finance Committee, which has 13 Democrats and 10 Republicans, is expected to finish writing its bill by the end of the month. It then would be combined with the Senate health committee measure and be considered by the full Senate.
At roughly the same time, the House is expected to vote on a consolidated bill melded from the three committee drafts. Then comes the hardest part: finding common ground between the House and Senate bills and producing one piece of legislation.
Baucus' proposal got one important boost Wednesday from the nonpartisan Congressional Budget Office and the bipartisan Joint Committee on Taxation.
Their preliminary analysis found that Baucus' plan would mean a net reduction in the deficit of $49 billion over the next 10 years, as new spending is offset by a combination of cuts in federal health programs, notably Medicare, as well as new taxes and fees.
Baucus proposes a nondeductible excise tax, starting in 2013, of 35% on insurance companies and plan administrators for any health insurance plan that charges more than $8,000 for individuals and $21,000 for families. The Joint Taxation Committee estimates that it would raise about $214.9 billion over 10 years.
The plan faces two instant hurdles: House Democratic leaders prefer an income tax surcharge on wealthy taxpayers, which would raise an estimated $544 billion over 10 years, and the House legislation has considerably less in Medicare savings.
And Republicans will oppose almost any tax increase. Senate Republican leader Mitch McConnell of Kentucky set the tone, saying the Baucus bill would "put massive new tax burdens on families and individuals."
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