Lawmakers wonder if the Baucus Plan does enough to control premiums

Sep 21 2009

Both Republican and Democratic lawmakers fear a new plan unveiled by Sen. Max Baucus, D-Mont., could impose added costs on middle-class people in the form of higher health insurance premiums, a problem they will seek to mitigate, The Washington Post reports: "Some Senate Democrats, along with a key moderate Republican, Sen. Olympia J. Snowe (Maine), are now discussing ways to increase assistance for individuals and families who could face premium costs of up to $15,000 per year by 2016. Sen. Charles E. Grassley (Iowa), the ranking Republican on Baucus's committee, is suggesting government assistance to insurance companies to help them control premium costs. And lawmakers in both parties are questioning whether Baucus's main revenue source, an excise tax on insurance companies for their most generous insurance policies, would simply be passed on to consumers. 'They're legitimate concerns,' said Baucus (D-Mont.). 'I'm going to try to address them.' But he added: 'It's important to realize, compared to what? Today, insurance policies are so expensive, people tend to forget that, hey, this is a big improvement over the status quo'" (Murray and Montgomery, 9/18).

The Wall Street Journal reports that Baucus is planning to move some things around in the bill to help woo needed support and appease naysayers: "Critics of the bill say some lower-to-middle-income Americans would have trouble affording coverage under the Baucus plan. Among those expressing that concern is Sen. Olympia Snowe of Maine, the Republican whom Senate Democrats have the best hope of winning over. Mr. Baucus, a Montana Democrat, made clear he was flexible. 'We're going to have to work all that out,' he said. Among the options likely to be considered: further limiting consumers' out-of-pocket medical expenses; sweetening subsidies to low-income people to defray the cost of insurance; and limiting the scope of the new tax" (Hitt, 9/18).

The whole Senate Finance Committee also remain skeptical of the plan, Roll Call reports: "Finance senators are particularly concerned about affordability. Both Republicans and Democrats worry that Baucus' legislation does not do enough to bring down the cost of health care premiums. Additionally, they are concerned the bill would force individuals who cannot afford it to purchase insurance" (Drucker, 9/17).

"What is in the Senate bill right now...does not have affordability for the middle class," House Speaker Nancy Pelosi, D-Calif., said, Dow Jones Newswires/Wall Street Journal reports. She also pointed out that the House bill affords more protection to seniors in her view. House Democrats would limit insurers to charging only twice as much in premiums for the elderly compared with young people. The Baucus proposal allows them to charge older people up to five times as much (Yoest, 9/17).

Related KHN Story: Chasm In Congress Over How Much Individuals Should Pay For Health Care (Rau, 9/17)

"Baucus acknowledges the criticism he is getting from within his own party," TIME reports. Baucus told TIME he was working to address concerns raised by fellow lawmakers, such as the tighter limit on subsidies to help lower-income people by insurance. In the House, subsidies are available to people earning up to 400 percent of the poverty line, or $88,000 for a family of four. The Baucus plan doesn't go that far, but any increase would also raise the price tag, $774 billion over a decade (Tumulty, 9/18).

Two new studies show the ever increasing burden of rising premiums to families, The Nashua (N.H.) Telegraph reports. In New Hampshire, for instance, average, annual premiums for families rose 96 percent to $14,448 in 2008, compared with only $7,525 in 2000, according to a report by Families USA, while wages had grown an average of only 21 percent during that period. The Obama administration and Families USA both reported that workers were bearing an ever greater burden as some companies stop covering employees or shift more costs to them (Landrigan, 9/18).

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