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Baucus Floats Proposal To 'Gang Of Six' Baucus Floats Proposal To 'Gang Of Six'

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HEALTH

Baucus Floats Proposal To 'Gang Of Six'

In advance of a crucial meeting Tuesday, Senate Finance Chairman Max Baucus has rolled out a $900 billion healthcare overhaul proposal for the group of senators engaged in negotiations to produce a bipartisan bill.

The Baucus plan includes a new fee on insurance companies, expands access to Medicaid and seeks to drum up competition for private insurers in the form of a cooperative rather than a so-called public option, according to sources close to the discussions.

 

The group of six bipartisan negotiators - known informally as the "Gang of Six" - is set to meet Tuesday to discuss the proposal. One source stressed that the details are not considered final or all-encompassing in terms of what might be contained in a chairman's mark of the legislation.

The White House and Senate Democratic leaders have given the group of six senators until next Tuesday -- Sept. 15 -- to produce a bipartisan bill before other options, such as considering healthcare reform through the budget reconciliation process, are utilized.

The insurance industry fee would be levied against companies offering the most expensive - or so-called Cadillac - plans. The hope is that employers would be encouraged to purchase less expansive coverage for employees, in turn discouraging wasteful medical spending.

 

The insurance industry argues such a fee would simply be passed on to consumers, but the Baucus proposal is designed to attempt to discourage that urge.

A source said that the non-profit co-ops would set the benchmark for insurance costs, while transparency provisions would make it difficult for insurance companies to pass the fee on without consumers direct knowledge -- possibly sending those individuals left feeling burnt to the co-ops.

The proposal would require insurers to disclose the portion of premium costs that go toward administration, including profits.

The insurance industry fee was first proposed in July by Democratic Sens. Charles Schumer of New York, Debbie Stabenow of Michigan, Robert Menendez of New Jersey and John (Jay) Rockefeller of West Virginia. At the time, Schumer said insurance companies would be gaining 40 million new customers as a result of universal coverage and should contribute to the cost of the overhaul.

 

The insurance industry argues it has already made concessions, including ending denials based on pre-existing conditions and discontinuing premium variations based on a person's health status and gender.

Baucus' proposal also would expand Medicaid to those earning less than 133 percent of the federal poverty level. In addition, it would offer tax credits to help low- and middle-income families and individuals afford the cost of health insurance, although an outline of the proposal does not include specifics.

As expected, the proposal includes provisions that create health insurance exchanges where individuals and small businesses could find standardized information on insurance plans and prices. It would place a limit on out-of-pocket expenses for consumers, and attempt to shift the basis for medical provider payment policies to quality rather than quantity.

The "Gang of Six" senators - including Baucus, Finance ranking member Charles Grassley, Health, Education, Labor and Pensions Committee ranking member Mike Enzi and Sens. Jeff Bingaman, D-N.M., Kent Conrad, D-N.D.,and Olympia Snowe, R-Maine - held a 90-minute teleconference last Friday. Afterward, Baucus announced the group would meet Tuesday "take stock of where we are and determine how to best pass real reform."

In a statement following the teleconference, Baucus said he is "committed to getting healthcare reform done -- done soon and done right," and he characterized the teleconference as "a productive one."

"We addressed a number of issues at hand, and the next steps moving forward. Health reform is certainly a significant challenge and each time we talk, we are reminded just how many areas of agreement exist," he said.

Members agreed they need to "take control of healthcare costs and make health insurance affordable for families and small businesses," Baucus said. They also agreed that all Americans should be able to choose -- and be able to afford -- a quality healthcare plan, and any legislation should not add to the deficit, Baucus added.

The price tag on the plan floated today by Baucus - in the neighborhood of $900 billion - appears to be a bid to appeal to Republicans and moderate Democrats who have balked at the $1 trillion-plus costs of healthcare reform bills debated in House and Senate committees earlier this summer.

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