Now election's over, Democrats pick up health insurance ideas

by Lesley Politi on November 18, 2008

Now election’s over, Democrats pick up health insurance ideas

The battle for health care reform is now engaged.

Sen. Max Baucus, the Montana Democrat best known for his bipartisanship, issued a 98-page call for reform last week that could be the biggest partisan fight of the next Congress.

It is a plan for universal coverage that would be built on the current system. Employer-sponsored insurance would still play a big part, but it would start requiring employers to provide it if they don’t do so now. It also would require individuals to buy health insurance if they aren’t covered by an employer’s plan. Those who can’t afford health insurance would be subsidized by those who can.

Sen. Baucus’ policy paper was the first off the mark since the Nov. 4 election. That gives his ideas the edge over other expected proposals, including a comprehensive one from Sen. Edward Kennedy. Sen. Baucus’ timing, his standing as chairman of the Senate Finance Committee, and Sen. Kennedy’s health problems are all seen as making the Baucus proposal the basic outline for the Democratic majority in Congress.

It is not known what his legislation will finally look like, how much it will cost, or when it will be introduced in bill form. But the proposal raises both hopes for and doubts about the possible reform of America’s expensive, unequal and inadequate health care system.

The Baucus proposal is similar to President-elect Barack Obama’s campaign health plan. The biggest difference is that Sen. Baucus calls for an individual mandate. That means if a single person makes more than $41,600 a year, he or she will be required to purchase health insurance whether it’s wanted or not.

Like the Obama plan, the Baucus proposal calls for a government-created insurance exchange, which would allow an employee to keep his or her insurance even when changing or losing a job.

Sen. Baucus also wants to effectively lower the age of Medicare eligibility to 55, expand Medicaid to everyone living below the poverty level, cover more children of the working poor, and eliminate abuse and waste in the system.

Sen. Baucus thinks the proposal could go into effect in about three years.

The details are unclear, but the proposal builds on the current system. It would require practically every employer to pay for employee health insurance. “Small firms” would be exempted, but the senator doesn’t define what that term means.

Sen. Baucus does not explain how the reform will be paid for. Deep in the document he raises the possibility of taxing the benefits that employees receive from their employers. Those medical benefits have never been taxed as income.

Democrats roundly condemned that idea when Sen. John McCain brought it up in the presidential campaign. But experts say the federal government lost more than $300 billion in tax revenue in 2007 by excluding employer-sponsored benefits. The thinking is that the government can’t afford that luxury any more.

The Baucus proposal also says it would save money by eliminating waste and fraud, a claim practically every politician ever elected has made and then failed to deliver. He also believes in greater use of information technology and making science-based evidence the basis of medical practice. Both reforms hold a lot of promise, but how much money they will save is widely debated.

Still, all of this is in the opening of the reform battle. It mainly declares the Democratic majority’s intention to attend to the nation’s health care system — on the party’s terms.

Despite the buoyant tone of Sen. Baucus’ plan, even Democrats are nowhere near consensus on what should be done.

Some of the plan’s ideas are good, while others need to be thoroughly examined and debated.

And starting this week, they will be.


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