KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Baucus Plan Would Create Winners And Losers

The Associated Press examines the health care plan of Sen. Max Baucus and finds that while hospital and drug makers like what they see, insurers, doctors, advocates for low-income workers and some business groups aren't as happy.

The Baucus plan would cover "around 95 percent of Americans. Illegal immigrants would not receive government benefits," The AP reports in a detailed look at the propsals. It would cost less than $900 billion over 10 years and would be paid for with "fees on insurance companies, drug makers, medical device manufacturers and insurers," plus a "[t]ax of 35 percent on insurance plans costing more than $8,000 for individuals and $21,000 for families, applied to premium amounts over the threshold." There would also by '[a] fee on employers whose workers receive government subsidies to help them pay premiums," and "fines on those who fail to get coverage" (9/14).

Baucus "has promised a formal proposal within days and plans to convene a bill-drafting session the week of Sept. 21," The AP reports in a second article. The plan "is important for two reasons: It's the only proposal that's been worked out in close consultation with Republicans, and it also seems to be headed in the general direction Obama wants to take." The plan is "widely seen as making major concessions to industry. There's no government insurance plan to compete with private carriers, and no requirement on employers to provide coverage - as legislation drafted by House Democrats would provide. In another significant break with House Democrats, Baucus wouldn't raise taxes on upper-income earners to pay for health care."

But there is still "plenty to argue about in the fine print." The plan would help middle-class Americans pay for health insurance by providing tax credits to millions who purchase their own plan. "But Sen. Jay Rockefeller, D-W.Va., says the way eligibility for the tax credits is being computed might result in a meager benefit that leaves many consumers with insurance sticker-shock" and "says the tax credits should be based on an individual's total medical costs, including premiums and out-of-pocket expenses."

Employers are also concerned. Although they won't be required to offer insurance, "an employer will be charged a $400 fee if their workers receive a tax credit from the government to purchase coverage." But "[e]ven if just one employee gets help, the fee would be multiplied by the total number of employees at the firm," which advocates for the poor say could "discourage some companies from hiring low-income workers." Insurers worry about an additional fee, and "[d]octors are upset Baucus has not given them as much relief from scheduled Medicare fee cuts as have Democrats in the House" (Alonso-Zaldivar and Fram, 9/14).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.