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Baucus presents healthcare overhaul plan
The Montana Democrat who heads a key Senate panel unveils his proposal. It
would tax high-end insurance plans and create nonprofit insurance cooperatives
as an alternative to a government-run option.
By Noam N. Levey and Janet Hook
September 9, 2009
Reporting from Washington
Senate Finance Committee Chairman Max Baucus (D-Mont.) on Tuesday unveiled
his long-awaited compromise blueprint for healthcare reform, proposing new taxes
on high-end insurance plans and offering nonprofit insurance cooperatives as an
alternative to a controversial government-run option.
The unveiling
marked an end to his marathon effort to win over substantial Republican support
for a healthcare reform plan. Baucus' plan lays down a vision designed to appeal
to moderate and conservative Democrats, who will be key to any
overhaul.
Liberals in the House and Senate have already spelled out their
vision. With Baucus' proposal, the range of potential reform options has
solidified, since no final bill is likely to be substantially more liberal than
the House version or more conservative than Baucus'.
President Obama's
speech to a joint session of Congress tonight is likely to further clarify the
boundaries of a final compromise.
After a meeting with Baucus on Tuesday,
none of the three Finance Committee Republicans who have been negotiating with
him for most of the year would commit to backing the plan, according to a GOP
aide briefed on the meeting. Baucus said he had to move forward in the committee
with or without them.
"The rubber's starting to hit the road," Baucus
said Tuesday. "We're not going to dawdle."
To draw moderates who object
to the government-run insurance option, Baucus would provide federal funds to
help set up nonprofit, state-level cooperatives in which consumers could band
together to purchase health insurance.
Advocates of this approach,
including Sen. Kent Conrad (D-N.D.), argue that these cooperatives could
pressure private insurers to provide affordable, quality coverage in the same
way that a government plan could. In many regions, a small number of companies
often dominate the medical insurance market.
On Tuesday, several
lawmakers praised Baucus' efforts, including Sen. Olympia J. Snowe of Maine, a
moderate Republican who has been working with Baucus and whom Democrats see as a
crucial vote.
"There are a lot of promising elements. It's a work in
progress," Snowe said, adding that she wanted to see a trigger mechanism setting
up a government plan in case the cooperatives don't work.
Sen. Debbie
Stabenow (D-Mich.) said she was not troubled by the absence of a public option
because the legislation will be "refined." She said Baucus' proposal was a
"very, very good starting point."
Baucus, who began sharing his plan with
a bipartisan group of lawmakers over the weekend, proposes to help pay for his
bill with a series of new fees on the health insurance industry as well as taxes
on some employer-provided healthcare plans.
Like the other major
Democratic proposals, Baucus' plan would prohibit insurers from denying coverage
to people with preexisting medical conditions, a cornerstone of the changes
being pushed by the president and his congressional allies.
It would also
require nearly all Americans to get insurance -- a provision that would create
millions of new customers, which private insurers say they must have to offset
the cost of dropping the restrictive rules that deny and limit
coverage.
The Baucus plan would set up regulated insurance marketplaces
operated by states, in which people who do not get their insurance through work
could shop among plans offered by private carriers.
The proposal also
would dramatically increase federal aid to Americans seeking insurance,
expanding the Medicaid program for the country's poorest residents and offering
tax credits to other low-income people to help them pay their insurance
premiums.
Democratic leaders have all but abandoned hope that more than
one or two Republicans in Congress will back their effort to reshape the
nation's healthcare system.
They are instead laboring to bridge the
divide between liberal Democrats, who demand a new government insurance plan,
and more conservative members of the party, who have said they will never vote
for such a plan.
That tension was underscored Tuesday as House Speaker
Nancy Pelosi (D-San Francisco) insisted that a government plan must be part of
healthcare legislation just hours after her senior deputy, Majority Leader Steny
Hoyer (D-Md.), told reporters it was not essential.
Baucus' plan does not
include a mandate requiring employers to provide health insurance, as other
proposals do. Instead, large employers that do not provide insurance would have
to pay a fee for each of their employees that received federal subsidies to
purchase insurance.
Individuals, meanwhile, could face fines if they
elect not to get insurance. Under Baucus' plan, families making more than three
times the federal poverty level -- or $66,150 for a family of four -- could pay
as much as $3,800 in fines.
To pay for a bill that Baucus estimated would
cost $900 billion over the next decade, the senator is proposing new taxes on
insurance plans worth more than $8,000 for individuals and $21,000 for families,
and new fees for insurers, drug makers, device makers and clinical
labs.
That drew sharp criticism from the insurance industry Tuesday. "New
taxes on healthcare coverage will only make coverage less affordable," said
Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the
industry's Washington-based lobbying arm.
"That is the opposite of what
healthcare reform is supposed to accomplish," he said.
On the other end
of the political spectrum, a leading consumer group also took aim at the Baucus
proposal, criticizing a provision that could allow insurers more flexibility to
sell plans across state lines.
"This is a huge loophole that the
insurance industry has been seeking for decades," said Jerry Flanagan,
healthcare policy director of Santa Monica-based Consumer Watchdog.
noam.levey@latimes.com
janet.hook@latimes.com
Copyright © 2009, The Los Angeles Times