Hullabaloo

Monday, August 24, 2009

 
Bypassing Senate Finance

by dday

Leaks keep springing that the White House is ready to give up on bipartisanship and just pass a health care bill with Democrats. My message would be, hurry up!

The only committee still working on the health care bill is the Senate Finance Committee. They've been systematically dismantling it on a number of fronts. Not only have they ditched the public option, as well as the employer mandate which would require businesses to either provide health care for their employees or pay a percentage into the system (I may be OK with dropping that), they are striking at the very heart of what will tangibly help people in the bill - the subsidies for insurance:

The saving grace of those four bills was that the consumer protections and financial assistance in them remained reasonably strong. If reform ends up looking like those four bills, then financial assistance would be available to people earning up to four times the poverty rate--or around $88,000 a year in family income. (Subsidies would be available on a sliding scale, so that a family making $70,000 would get very little, a family making $60,000 would get more, and so on.) Such a measure would also limit out-of-pocket expenses to $10,000 a year per family, while providing other crucial protections. And, of course, it would include a real public insurance option.

If Conrad and his supporters get their way, the new health care system won't be nearly as generous--or protective. They've made clear they want a package that costs less than $1 trillion. A lot less. And, thanks to the Center on Budget and Policy Priorities, we have some sense of what that would mean in practice.

Based on previously leaked drafts of legislation going through the Senate Finance Committee--the last of the five considering health legislation, and the only where it's still hung up--the Center was able to project what a scaled back plan would look like. Their conclusions, as noted previously in this space, were pretty discouraging:

...an individual with income above $32,490, and a family of three with income above $54,930, would not receive any subsidy to help pay for coverage.

Substantial numbers of people with incomes modestly above 300 percent of the poverty line could face difficulty paying the full price for coverage. The average job-based insurance policy today would cost a family of three at 300 percent of the poverty line about 23 percent of its income. This could leave the family short of funds for other expenses such as housing and child care.

So people making between three and four times the poverty line--that is, families with incomes between roughly $66,000 and $88,000 a year--would get no assistance whatsoever. Families making less than that would still get some assistance, but it'd be a lot less than they'd get otherwise.

It gets worse. In the Finance Committee bill, the basic policy would cover only 65% of total medical costs, far less than even the current standard of 80-90%. For the poor, you'd be paying a premium of indeterminate size that don't actually cover you. Sure, the insurance company brochure and the glossy ads will say that their plans offer you affordable coverage and piece of mind. But when you try to use it, you'll find it to be junk, and you'll be on the hook for major out-of-pocket costs. Even if they're capped at $10,000 annually, that's far more than a lot of people can afford.

As Jon Cohn says, this sounds like a Trojan horse to bring Republicans back to prominence more than anything else:

Put aside, for a moment, whether this makes sense substantively. It makes absolutely no sense politically. Scaling down legislation basically means gutting the benefits that would go to the working and middle class. In other words, it would help fulfill the fear many of these voters already have and that opponents of reform have tried hard to stoke: That reform doesn't have much to offer the typical middle-income American.

You can imagine why Republicans might think this is a dandy idea. But why on earth would Democrats agree?

A lot of needed attention has been paid to these scale-backs. But understand - all of them are in the Senate Finance Committee version of the bill. The competing versions all have a higher percentage of coverage for basic policies, higher subsidies, more protection for consumers and a public option. It's good to have this information because we know what to look out for, but if the Administration is truly committed to giving up on bipartisanship, they can give up on all of these coverage scale-backs borne out of the bipartisan process. Simply put, if Republicans will not be needed for a bill, the Senate Finance Committee version gets thrown in the trash bin. All of the offending items under discussion exist there. Bypass the committee, borrow the House's funding mechanism and Medicare provisions (which is really the only elements under the jurisdiction of Finance), and get a bill to the Senate floor. Even reviving Max Baucus' original document as a blueprint, which by the way INCLUDED a public option, could work. This may offend Chuck Grassley, but that's a feature, not a bug.

Beating back the army of insurance lobbyists is as simple as devaluing the Baucus caucus.

...I kind of mentioned this at the end, but please take note: Max Baucus' sketch of principles for health care reform from last year is to the left of ANY bill that has come out of any Congressional committee thus far. It not only included a public option, a bigger role for the insurance exchange, an employer mandate, and subsidies up to 400%, but opened up Medicare to anyone aged 55-64 who didn't get coverage from their employer. Seems to me Sen. Reid could just take that sketch and run with it.


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dday 8/24/2009 08:30:00 AM |