Rip It Up and Start Again

The tangled web Max weaves

The tangled web Max weaves

 by CHRIS MAISANO & JEFF MUCKENSTURM

Sen. Max Baucus (D-Health Insurance Industry) has finally graced us with his Senate Finance Committee health “reform” bill, and it stinks. Very, very badly. Here are some of the lowlights:

  • No public option, but rather state-level co-ops that will not have any chance of effectively competing with for profit insurance plans to lower costs, according to the Congressional Budget Office (CBO).
  • It doesn't come anywhere close to achieving universal coverage. The CBO estimates that 25 million people would still be uninsured in 2019.
  • Mandates that families buy health insurance or face a fine of close to $4000. Families would spend no more than 13 percent of their annual income on insurance premiums, or $6500 annually. This exorbitant figure does not even include co-pays and other potential costs.
  • Carries a $774 billion price tag. A single-payer, Medicare-for-all system would save the country approximately $400 billion.
  • Cuts Medicare and would dramatically expand state Medicaid enrollments even as many states struggle to balance their budgets.
  • Taxes "high value" insurance plans worth $21,000 for a family and $8,000 for individuals. Since many union-provided plans fall in this category, many union workers would see their paychecks shrink.
  • Contains a "free rider" provision that could penalize employers who hire low-income workers eligible for public subsidies. The upshot? Potential hiring discrimination against low income workers.

Even though Baucus included these provisions to attain Republican support, none of the Republicans on the Senate Finance Committee have endorsed the bill. So much for bipartisanship.

The bill does have its supporters out there. Chief among them is the pharmaceutical industry, which plans on spending big bucks running TV ads supporting the Baucus bill. Why? As that Times blog post notes, "the move would be a follow-up to the deal that drug makers struck in June with Mr. Baucus and the White House. Under that pact, the industry agreed to various givebacks and discounts" in return for guarantees that the government would not use its bargaining power to lower prescription drug costs. Quid pro quo indeed!

The question is now whether or not the "reform" legislation that comes out of Congress will give us something worse than the terrible system we have now. In his most recent column, Paul Krugman seems to be uncharacteristically optimistic that the Baucus plan could ultimately lay the groundwork for an acceptable bill: "maybe things will go the other way, and Mr. Baucus (and the White House) will, for once, actually listen to progressive concerns, making the bill stronger."

With all due respect to Mr. Krugman, this seems to be little more than wishful thinking. If this legislative process has taught us anything, it's that the White House will continue to sacrifice the best policy ideas while spurning critics to its left in order to strike a deal with Blue Dog Dems, Republicans, and the insurance and pharmaceutical industries. At this point, there's probably little hope that the final bill will be much better than what Baucus has proposed. Instead of wasting time "standing up to insurance companies" while actually standing up for them, let's keep working for Medicare for all.


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