Baucus health plan would save money but squeeze private insurance
By: Susan Ferrechio
Chief Congressional Correspondent
October 8, 2009
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| Senate Finance Committee Chairman Max Baucus, D-Mont., left, huddles with Treasury Secretary Timothy Geithner as Geithner arrives to testify about the fiscal 2010 federal budget on Capitol Hill in Washington. (AP) |
A Democratic health care proposal in the Senate would trim the deficit and cost less than $900 billion, but it would result in as many as 8 million people being pushed out of private insurance.
The new price tag, produced by the independent Congressional Budget Office, is good news for Sen. Max Baucus, D-Mont., author of the bill and head of the Senate Finance Committee. Baucus put off a committee vote on his plan at the behest of lawmakers who wanted to make sure the legislation was "deficit-neutral" before deciding whether to vote for it.
The Baucus plan, which would require all Americans who could afford it to carry insurance or pay a fine, would cut the number of uninsured by 29 million over 10 years, but leave 25 million without insurance, including more than 8 million illegal immigrants.
The report found the number of people buying coverage outside newly created health insurance exchanges or getting coverage through employers "would decline by several million." About 3 million would be cut from employer-provided coverage and an additional 5 million would lose other private insurance.
The Baucus bill would put 14 million more Americans on Medicaid, the program for poor Americans, by 2019 through coverage expanded to include people earning up to 133 percent of the poverty level.
It also concluded that the creation of the much-touted health insurance co-operatives that are at the heart of the Baucus bill "seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments," according to a letter to Baucus by CBO Director Doug Elmendorf.
The estimate provided by the CBO has grown since an initial estimate in September, when the agency estimated the bill would cost $774 billion.
Baucus said the report showed his bill was "a smart investment on our federal balance sheet. It's an even smarter investment for American families, businesses and our economy."
Elmendorf warned that the figures could change once the bill was translated into legislative language.
The report also shows Medicare would take a substantial financial hit, with permanent reductions in payment rates for services (excluding physicians' services) totaling $279 billion over 10 years. The bill would also cut Medicare and Medicaid payments to hospitals by $45 billion. The CBO projects that a yet-to-be-created Medicare Commission will cut subsidies for the extra benefits provided under the Medicare Advantage program and reduce the subsidies for the Medicare prescription drug program in an effort to save $22 billion.
Republicans downplayed the report, warning that Democrats could add to the cost when they held closed-door negotiations on a final bill.
"The real bill will be another 1,000-page, trillion-dollar experiment that slashes a half-trillion dollars from seniors' Medicare, raises taxes on American families by $400 billion, increases health care premiums and vastly expands the role of the federal government in the personal health care decisions of every American," warned Senate Minority Leader Mitch McConnell, R-Ky.
