The New Republic

Agree that Greenstein and Klein have excellent analytical critiques of the Baucus bill. But to make the many changes they suggest would fundamentally rewrite the entire bill in its most critical aspects which is the CBO scoring of the bill. The most efficient and straight forward way to show the underfunding of the Baucus bill is to compare it to the CBO scoring of the Tricommittee House bill. In the House bill according to CBO (July 17 letter to Chairman Rangel) the ten year number (2010-2019) for premium and cost sharing subsidies is $773 billion. in CBO's September 16 letter of Baucus the ten year number for subsidies is $463 billion over ten years. That is a three hundred billion cost shift from the Federal government to the middle and low income individuals who basically will be under a federal mandate to purchase health insurance. In the Senate bill, those with incomes at 300% FPL can pay up to 13 percent of the income which for a family at 400% of poverty is $11.460. Also the Baucus bill provides very little in terms of cost sharing subsidies. In fact there is no cost sharing subsidies for those above 200 percent of poverty. Before the Administration endorses this approach, lets think about the President's position on the individual mandate during his primary campaign against Mrs. Clinton. During several of the primaries, the President ran "Harry and Louise" look alike ads critisizing Mrs. Clinton for her endorsement of an individual mandate saying that it would force people to purchase insurance without adequate resources. He was right during the campaign. Next, what about the Medicaid expansion to 133% FPL that both the House and Senate require. In the House bill which picked up 100 percent of the cost the CBO score of this expansion was 438 billion over ten years. The CBO score for the Medicaid expansion in the Senate bill is $287 billion because this bill requires state matching payments. There are different starting dates in the two bills, so you cannot make a direct comparison, but the Senate bill is at least over $100 billion cost shift to the States. Many of our states are in dire financial condition and have only been able to keep their current Medicaid programs because of the stimulus bill. Consequently, this cost shift makes very little sense and many of the governors will object strongly. Then we have the center piece of Baucus' revenue proposal the 35 percent tax on high cost plans. According to Joint Tax, this raises $215 billion over ten years. This tax rapidly increases in the out years because it is indexed at CPI-U which is about one half of the annual increase in insurance premiums, meaning that over time more Americans will be hit by this tax. Even though applied to insurers, this tax is meant to be a 100 percent pass through to the individual. Again, didn't this President run tens of millions of ads against Senator McCain about taxing health benefits during the campaign? Let see the Democrats get this by the labor unions!! Totally agree with Greenstein critique of free rider provision which totally discriminates against low income. The provision is a joke. Another provision among many that makes no sense is tha Baucus bill will allow "young invincibles" to purchase high deductible plans ind a distinct risk pool which will undermine the connector risk pool. Isn't the main reason to have an individual mandate to have the young and healthy in the same risk pool with older americans?? Finally, the coops are a joke. No one has the slightest idea what they are,or if they other form. This bill is fundamentally flawed by trying to play the numbers game with CBO. Maybe it is time to start over.

- lawphd

September 16, 2009 at 10:13pm