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Baucus health plan: How is it different?

No Republican has signed on yet to the healthcare "compromise" plan released Wednesday by Senate Finance Committee chair Max Baucus.

By Staff writer / September 16, 2009

Senator Max Baucus (D) of Montana, chairman of the Senate Finance Committee, discusses the healthcare reform bill during a news conference on Capitol Hill in Washington on Wednesday.

Hyungwon Kang / Reuters

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There’s a new healthcare bill in town – and its purpose may be to serve as a conservative alternative to existing bills, pulling any final legislation to the right.

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The long-awaited proposal from Senate Finance Committee chairman Max Baucus (D) of Montana has yet to draw support from Republicans, however. In that sense Senator Baucus’s bid to develop bipartisan legislation has fallen short, so far.

Still, some of the main provisions of Baucus’s plan released Wednesday are quite different from the more liberal versions of healthcare reform produced by the Senate Health panel, and by committees in the House.

Baucus himself notes that the horse-trading of the legislative process is just beginning.

“By the time we get to final passage of the bill in this committee, you’ll find we get Republican support,” he predicted at a press conference Wednesday.

Among the notable ways in which the Baucus plan differs from other healthcare bills now progressing in Congress:

It’s cheaper. The Baucus bill would cost an estimated $856 billion over 10 years, as opposed to, say, the $1 trillion the House multi-committee effort might run taxpayers over the same time period. Given the mysteries of the congressional cost-estimation process, this projected figure might yet change. GOP senators may also consider the approximately $200 billion difference to be insufficient.

Subsidies are smaller. The Baucus legislation would provide federal subsidies to purchase health insurance to individuals and families with incomes up to 300 percent of the federal poverty line. The House bill, by contrast, offers subsidies for those with incomes up to 400 percent of poverty line.

Baucus would cap at 13 percent of income the health insurance costs for those with incomes up to 400 percent of poverty. But some Democrats are already questioning whether this approach would burden some middle-class families with sizable new costs.

“This is reducing coverage for poor and working people,” said Rep. Charles Rangel (D) of New York, chairman of the House Ways and Means Committee.

No government-run health plan. Baucus’s “chairman’s mark” does not include the so-called “public option,” government-run health insurance intended in part to help bring down costs by serving as a competitor to private insurance. The House bill, by contrast, does include such a plan.

Nor does the Baucus bill include a trigger that would lead to the creation of a public option if health costs rise by a certain amount. Instead, it calls for the creation of private, nonprofit health insurance cooperatives to compete with private insurers.

Such co-ops “would be a useful player, but not a game-changer,” says J.B. Silvers, a professor of health systems management at Case Western Reserve’s Weatherhead School of Management.

Tougher on illegal immigrants. Unlike the House bill, the Baucus legislation would bar illegal immigrants from purchasing health insurance through the new exchanges set up for individuals to purchase policies. It would also establish verification procedures to check the immigration status of those covered by the bill – a move long pushed by many Republicans.

Like other current efforts, the Baucus bill would require individuals to have health insurance. It would also ban insurance companies from denying coverage to those with preexisting medical conditions.

Baucus noted Wednesday that his effort reflects many of the main points made by President Obama in his recent healthcare speech to Congress.

“It delivers on the vision for meaningful healthcare reform that I share with President Obama,” he said.

Many liberals, however, were dismayed at the Baucus effort, considering it a scaled-back version that did not meet their basic concerns.

“The way it is now, there’s no way I can vote for [the chairman’s mark],” said Sen. John Rockefeller IV (D) of West Virginia, a Finance Committee member.

But the legislative process is just beginning. Next week, Baucus’s bill will be considered by the full Finance panel. After amendments, it must be melded with the Senate Health, Education, Labor, and Pensions Committee effort.

If the Senate and House both manage to pass healthcare legislation, those must be blended together as well. Any final health legislation would thus be a mixture of all its component bills.