Baucus Bill Unveiled

Baucus Bill: America’s Healthy Future Act 2009

The highly-anticipated health care proposal authored by Senate Finance Committee Chair Max Baucus (D-MT) has officially been unveiled. Titled "America’s Healthy Future Act of 2009," this 223-page proposal is presented in the form of a chairman’s mark and carries a price tag, in its current form, of $856 billion. Those interested in reading the full text of the Baucus Bill should find the language easier to read than previous bills.

So far, the Senate Finance Committee does not have endorsement from either party embracing this new attempt at healthcare reform, so the immediate task at hand will be for members of the Finance Committee to review the Baucus bill draft and attempt a "mark-up" of the bill scheduled for September 22, 2009. At that time the document will be put into full legislative text where it is expected to easily expand to 1,000-plus pages.

Clearly, with Democrats controlling both House and Senate, they do not need bipartisan support of this or any other Democrat-sponsored legislation. Shumer (D-NY), a member of the Finance Committee, has already made the strong-arm statement, "We will enact health-care reform by the end of the year. If the Republicans are not able to produce an agreement, we will have contingencies in play." By contingencies, Shumer has stated that Democrats may invoke "reconcilliation," where the Democrats could ram through a bill with 51 Senate votes rather than the usual required 60. While it is true that there are no Republicans willing to endorse the Baucus bill yet, there are many of the rank-and-file Democrats within the committee that have also voiced opposition. Right now the Democrats are heavily courting the support of moderate to left-of-moderate Senators Olympia Snowe of Maine, Chuck Grassley of Iowa, and Mike Enzi of Wyoming in hopes that bringing any or all of them on board would signal true bipartisanship reform.

Without support from any of the members of the Finance Committee’s Gang of Six, Baucus, flying solo on this one, stated, " The Finance Committee has carefully worked through the details of health care reform to ensure this package works for patients, for health care providers and for our economy…We worked to build a balanced, common-sense package that ensures quality, affordable coverage and doesn’t add a dime to the deficit."

Baucus Bill Content

So what’s in the new Baucus bill and how does it differ from current law and/or other healthcare bills?

Under Subtitle D – Shared Responsibility, individuals will be required to have insurance. Beginning in 2013, all U.S. citizens and legal residents would be subject to a fine of as much as $3800 per family or $950 for an individual for failure to carry insurance. Exemptions on the basis of religious objections consistent with those allowed under Medicare and for undocumented aliens would be allowed. Individuals will be required to report their compliance annually on their Federal income tax returns.

Under Subtitle E – Creation of Health Care Cooperatives, this bill proposes Consumer Operated and Oriented Plan (CO-OP) rather than a public option. This program would create member-run, non-profit health insurance companies serving individuals in one or more states. Beginning in 2012, there will be $6 billion in federal funding to states or groups of states that would have consumer-owned and operated nonprofit health insurance co-ops.

Under Subtitle B – State Exchanges and Consumer Assistance, illegal immigrant will be able to get insurance for their U.S. citizen or lawfully present children. Illegal immigrants will not be allowed to purchase insurance for themselves. (Not clear how this will do anything to reduce high traffic of illegal immigrants visiting emergency rooms and other urgent care facilities pro gratis)

Under Subtitle C – Making Coverage Affordable, no federal funds or cost-sharing credits would be used to pay for abortions except in the case of rape, incest, or if the life of the mother is endangered. "Health benefits plans participating in state exhcanges would be prohitibed from discriminating against any individual health care provider or health care facility because of its willingness or unwillingness to provide, pay for, profice coverage of, or refer for abortions."

Under Subtitle G – Role of Public Programs, Part 1 – Medicaid Coverage for the Lowest Income Populations, the Medicaid program would be expanded beginning on January 1, 2014, to include all non-elderly non-pregant individuals (childless adults) making 133% of the federal poverty level (about $30,000). Existing law would remain unchanged for pregnant women. Qualifying childless adults will be able to choose between the state exchange coverage and Medicaid. American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands would have increased spending caps for these territories by 30% and a 55-percent FMAP (Federal Medical Assistance Percentage).

Under Subtitle C – Making Coverage Affordable, there will be four available benefit plans: platinum, gold, silver, and bronze. There will be certain minimum care mandatory under all plans.

Under Title VI – Revenue Items, the high-end or cadillac plans would be levied an excise tax exceeding a certain threshold ($21,000 threshold for family or $8,000 for individuals).

Under Title VI – Revenue Items, tax on HSA distributions not used for qualified medical expenses increased to 20 percent of the amount disbursed. The health care flexible spending account limits under a cafeteria plan will also be lowered to $2000.

Baucus plan proposes an $856 billion cost over the next 10 years, a $100 billion reduction over the H.R. 3200 plan cost. The Congressional Budget Office’s analysis of the Baucus bill came in even lower, at a meager $774 billion. Many are skeptic of both numbers stating that there are literally no programs anywhere near the size of this bill whose final numbers end up anywhere near first projections. Baucus still insists that his bill will not add to the federal deficit. Instead, expect over $500 billion in new taxes or cuts to programs like Medicare.

Under Subtitle A – Insurance Market Reforms, absolute denial of coverage because of pre-existing conditions or imposing lifetime or annual limits on coverage will be eliminated. Federal guideline for rating, issue, renewability, and pre-existing condition will be established for the individual market.

Under Title VI – Revenue Items, there will be taxes imposed on pharmaceutical manufacturers, medical device makers, and clinical laboratories. These fees to be assessed under the Chairman’s Mark are not tax deductible. (Conservatives understand that corporations don’t pay taxes, that those costs trickle down to the consumer.)

Under Subtitle H – Sense of the Senate Regarding Medical Malpractice, there is no true tort reform outlined in the Baucus bill. Tort reform is one of the major provisions considered by the Republicans to be essential to true health care reform. Rather there will be money to fund pilot programs to study ways to reform the malpractice system without capping malpractice awards.

Under Subtitle D – Shared Responsibility, there is no employer mandate to provide health insurance to employees, however, employers would be required to pay a penalty tax annually if their workers receive subsidies in order to purchase insurance through an exchange.