Baucus Sends $900 Billion Health Care Proposal To 'Gang Of Six'

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, has sent his "gang of six" colleagues on the Senate Finance Committee a health overhaul proposal that would cost under $900 billion.

The proposal is the "first concrete and comprehensive proposal to come out of the bipartisan talks" in the Senate Finance Committee, Politico reports. It would "levy new fees on insurers and create a network of consumer-owned insurance cooperatives," but it does not include a public insurance option, "a major difference from bills approved by three House committees and the Senate Health, Education, Labor and Pensions committee."

"Another significant variance with the House bills is the absence of a mandate on employers to provide coverage. Instead, the Baucus plan includes a 'free-rider' provision in which employers would contribute to the cost of providing government subsidies for the employees who purchase coverage in a government-organized insurance marketplace known as an exchange, according to the plan circulating among senators. Baucus’ plan also is expected to be less generous in terms of subsidies and coverage than those bills – which, along with the absence of the public option, is sure to rankle more liberal Democrats."

Although the plan "does not include any new taxes on alcohol or sugar," the bipartisan group is "considering a tax on insurance companies that provide expensive coverage plans. And one feature that might help satisfy the more liberal members of the committee is that insurance companies could face a separate new fee to help pay for the plan. It would be determined based on market share, and could raise $6 billion a year starting in 2010, the sources said" (Brown, 9/7).

Related KHN story from 7/30: "Free-Rider" Penalty For Employers Draws Ire From Advocates, Yawns From Business

The New York Times reports that "[t]he plan, circulating among some committee members of both parties, would also offer the option of lower-cost insurance, with protection only against the costs of catastrophic illnesses, to those 25 and younger. In addition, it would provide basic Medicaid coverage to millions of low-income people who are currently ineligible for the program, but the benefits would be less comprehensive than standard Medicaid." In addition to the insurer fee, the Baucus plan would also impose fees of "$4 billion a year on manufacturers of medical devices and $750 million a year on clinical laboratories"

On Tuesday, Baucus will try "to win support from the three Republicans and two other Democrats on his committee with whom he has been deliberating for months. Ultimately, however, he will need a majority of the committee's 23 members, several of whom are resentful at being excluded" (Calmes and Pear, 9/7).

CNN: The proposal is "considered a last-ditch effort to secure Republican votes for a health-care bill as President Obama pushes the issue with a planned speech to a joint session of Congress on Wednesday night. So far, none of the three Republican senators involved in talks with Baucus on the compromise have indicated whether they support the version he is proposing" (Barrett and Bash, 9/7). 

The Hill: "A source close to the talks described the proposal as a broad outline for Gang of Six members to consider as they enter their final week of talks before a Sept. 15 deadline that Baucus said he will enforce. A Democratic lobbyist working on healthcare said the marker was intended to spur GOP negotiators to strike a deal before the deadline passed" (Bolton, 9/7).

The Washington Post: "Baucus is urging three Republican colleagues to sign off on the $900 billion health-care reform package they have helped to negotiate over the past two months, in order to add a bipartisan proposal to the mix before President Obama's speech to Congress on Wednesday" (Murray, 9/7).

Kaiser Health News: "Baucus has told members that the proposal is not a final product and that more elements may be added. If members want to suggest changes to the bill that would increase its costs, however, they must also include financing offsets so the overall cost would not increase. But members in both parties may see the Finance proposal as too large and propose possible cuts" (Carey and Pianin, 9/7).

Bloomberg: "Baucus suggested Sept. 4 that he's prepared to move forward, even without Republicans. 'I am committed to getting health-care reform done -- done soon and done right,' he said after conferring with other senators" (Litvan and Gaouette, 9/8).

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