Baucus Bill: Health Reform That Isn't

With the long-awaited release of the Baucus health plan, which is said to have Obama's approval, the fix is in. Billions of taxpayer dollars will be thrown at the insurance and pharmaceutical industries, much of it diverted from Medicare and Medicaid (despite Obama's protestations that he would not raid Medicare to shore up the private system). We'll simply pour more money into a system that's already shown itself capable of absorbing whatever we put into it without providing anything like commensurate health care.

Look at the bare bones of the plan. Americans will be required to buy health insurance at whatever price the companies choose to charge, many using government subsidies. Businesses will have to contribute or be fined. Drug companies will still be able to charge whatever they like for drugs, and continue to jack up prices at several times the inflation rate. In short, the government will deliver to the insurance and pharmaceutical industries millions more paying customers, with virtually no curbs on their profiteering. The "public option" was first gutted, then all but dropped.

The only savings will come from stopping over-payments to the private Medicare Advantage plans (certainly a worthwhile reform), and from limiting some services now covered by Medicare and Medicaid, presumably on the basis of effectiveness studies. (Few experts believe there are significant savings from preventive care or computerization of records.) Insurers will be prohibited from denying coverage on the basis of pre-existing conditions or reducing benefits when customers have the temerity to get sick, but these prohibitions are easily circumvented.

So what will happen? First, the medical-industrial complex will consume an ever greater fraction of our GDP, at the expense of other social needs, like infrastructure and education. Second, American businesses that compete in the global market, already reeling from the costs of providing health insurance to their workers, will be even less competitive. Third, we'll see the growth of huge bureaucracies to make sure everyone buys insurance and penalize those who don't, and to monitor insurance companies for violations of the regulations against creaming off the most profitable customers. Finally, health care itself -- the ostensible purpose of the exercise -- will progressively deteriorate. We'll see not only rapidly rising premiums, but shrinking benefits and higher co-payments, until even those who have insurance will not be able to use it when they're sick.

We can get a glimpse of what lies in store from Massachusetts, which three years ago adopted a plan similar to the Baucus/Obama plan. Premiums in the state are rising at double-digit rates, benefits are often skimpy, co-payments are rising, and subsidies are costing the state far more than originally predicted. Die-hard advocates now say that universal insurance was always the first goal, to be followed by cost-control and increased benefits, but that hope is belied by the fact that things are moving in the opposite direction. Moreover, Massachusetts offers a best-case scenario, since the state already had a very low rate of uninsurance and was able to tap into a large pool of money set aside to provide free care to the indigent. The lesson is that there is not much sense in expanding coverage if it will quickly become inadequate and unaffordable.

All of this assumes that Baucus/Obama will eventually make its way through Congress in its present form. That is unlikely, but it is probable that some remnant of it will survive. It is now clear that the essential element in whatever passes will be publicly financed expansion of the insurance and pharmaceutical markets. Indeed, the purpose now seems not so much to provide universal health care as to win the heart and minds -- and wallets -- of these industries. They give copiously to Congressional campaigns, and with this health plan, the Democrats are positioned to take the lion's share of their donations. They've rolled right over the Republicans, whose health plan pretty much consists of, "Go out and buy insurance, and lots of luck." While that is good for the industries, it's not as good as the market expansion the Democrats now promise.

Insurance and drug companies will have plenty of opportunities to show their gratitude to the Democrats in the elections of 2010 and 2012. Moreover, since reform is not scheduled to be implemented until 2013, any public disillusionment won't be felt until after those elections.

Those of us who believe that advanced countries should provide universal and comprehensive health care as a matter of course, and who support a single-payer system as the most efficient way to do that, are faced with two unpalatable options: the Democrats' short-sighted and, I believe, cynical proposals to pour more money into a dysfunctional system, and the Republicans' clueless disregard for people not shrewd enough to be rich. In my next blog, I will suggest a practical proposal that would move us toward universal care, while containing costs. But it would take an aroused public to force the Democrats to stop wooing the health industries. Maybe real reform will have to await the emergence of a third party.

 

 

Comments

[Dacktyl]

Baucus can't support TRUE health reform! His benefactors sent him the Washington to PROTECT THEIR PROFITS! So what every 12 minutes another American dies because they lack health insurance and that that they don’t actually provide any value, but are simply running a mafioso-style middle-man racket, skimming 30% off the top before paying your doctor - THIS SYSTEM WORKS for people like Unitedhealth Group’s Stephen Hemsley who had a 124.8 million dollar payday!

Baucus was sent to Washington with STRICT INSTRUCTIONS not to mess too much with the status quo.

Check out the picture of our Sovereign Lord Baucus and Lady Snowe strolling around Washington:
http://republicandirtytricks.com

[wildedge]

"Moreover, since reform is not scheduled to be implemented until 2013, any public disillusionment won't be felt until after those elections." I disagree - I think voters today are able to see through hoodwinks faster than in previous generation, I think the backlash begins 2010; and if the Baucus bill does become the Obama bill, the President's active campaigning in 2010, the way Bush campaigned in 2002, will not help. Bush built upward from his base, Obama seems to be - if not cutting himself off from his base - at least severely limiting his influence with it.

[Milex]

I honestly don't believe that's true. I, for one, am not ready to abandon the President just yet. There has been no evidence that he is cutting himself off from his base. That's us. I'm still here. I also am not going to second guess him. I will trust him until he proves otherwise. One thing I would like for you all to remember - you will NEVER know what the President is thinking until he lets you know. That's one of the things I admire most about the man. He's a strategist. As we are often reminded, he only won by the electoral vote. But man, did he win. Also, I for one am not going to worry about what I cannot control. The government doe not control my life. I am proud to have a government that cares enough about its people to intervene when times are rough. All this fear. I can't understand it - and I'm soooooo glad I don't. I'd hate to be so paranoid that I refuse to take responsibility of my life simply because the government is doing what government does? Get over it.

[TongoRad]

Not sure "you will NEVER know what the President is thinking until he lets you know" qualifies as strong leadership.

He needs to get in front of the issues and lead - that's what strong leaders do. Obama on the other hand, appears to be choosing the smooth political operator route.

[Edmonsky]

Finance Senate Committee has 12 Democrats and 10 Republicans.
Three Democrats, Max Baucus, Kent Conrad and Blanche Lincoln have stated categorically that they are opposed to public option. Two Democrats, Jeff Bingaman and Bill Nelson, are suspected to be against public option. Any reasonable person knows that public option is dead. If the bill does not pass in the Senate Finance Committee, it means that the healthcare legislation has failed again and has to start all over again in 10-15 years again when Democrats have majority in the both Houses of Congress.

Democrats
http://finance.senate.gov/sitepages/committee.htm
Max Baucus, MT
John Rockefeller, WV
Kent Conrad, ND
Jeff Bingaman, NM
Blanche Lincoln, AR
Ron Wyden, OR
Charles Schumer, NY
Debbie Stabenow, MI
Maria Cantwell, WA
Bill Nelson, FL
Robert Menendez, NJ
Thomas Carper, DE

Republicans:
CHUCK GRASSLEY, IA
ORRIN G. HATCH, UT
OLYMPIA J. SNOWE, ME
JON KYL, AZ
JIM BUNNING, KY
MIKE CRAPO, ID
PAT ROBERTS, KS
JOHN ENSIGN, NV
MIKE ENZI, WY
JOHN CORNYN, TX

[M.S. Bellows, Jr. - Huffpost Blogger]

Any reasonable person knows that public option is dead. If the bill does not pass in the Senate Finance Committee, it means that the healthcare legislation has failed again and has to start all over again in 10-15 years

I understand your fear, but things are better than that. All it takes is for SOME bill to pass Finance and make it to the Senate floor. At that point, amendments will be voted on (hopefully including one adding public option). Then a conference committee will change it again to jibe with whichever version the House passes, then the full Senate and House vote on the final product, which could pass with 50 votes + Biden if they do it under budget reconciliation rules the way Republicans did in the past to defeat Democratic filibusters.

Again, all we need is for SOME bill to make it to the floor; then all bets are off. Thank God.

[JL-Sosa]

Unfortunately, both you and I know that by the time this bill gets to the President's desk there will be some war funding, a few provisions for farmers somewhere, some tax cuts, and a few protections for the 'farm raised tilapia' industry or some other minutae that will not be important enough to debate.

I am skeptical about public option... I hope I am wrong on this, but I sometimes feel as if people dumb enough to fight against efficient healthcare for themselves are also dumb enough to see things objectively or, god forbid, change their minds. I believe they call that 'flip flopping'?

[Tim303]

But the bill can be altered. Anyhow--I'd rather be a hypocrite who supported a bill that saved one life, than a cynic who for the sake of ideological purity damned a bill while thousands still die.

[LeftoftheLeft]

I guess that's going to be the new argument for getting us to support this piece of cr@p bill.

Well... I didn't buy it for torture.

And I'm not going to buy it for health care reform.

[eyemakeupneeded]

Doctor,you are too logical. Max Baucus gets more campaign contributions from health insurance companies than anyone else in the House or Senate. That's all you have to know. And the next question you should ask yourself is "Why isn't Obama reining him in?"

There are a variety of answers: the most obvious is that Obama does not really care about universal healthcare, he cares about power.

[Milex]

Not true. He does care. Why is it that you want the President to behave badly? He is NOT going to attack anyone publicly, so forget it. Contrary to some opinions, the President is NOT a thug. So if you're waiting on him to be rude to Republicans or opposing Democrats - forget about it. Not going to happen. You may as well face it, you have a President who does not go into a situation with guns blazing and bullying people.

[lookingAhead]

This was a boondoggle from the beginning. This administration lost by not starting out with single payer and working from their. But by starting with a public option then you started with a handicap. And yes these Medicare Advantage plans are a crock but have a lot of seniors mislead with what they got. I know this because I'm and insurance coder and biller,I work with these plans all the time. With these plans for some or most treatments depending on the situation one must get pre-authorization, with regular Medicare you have no such system. Medicare Advantage adds limited vision and dental that Medicare does not. Now if you read the plans carefully you will pay 75-80% out of pocket because you have a separate deductible for each, so not much of a saving and yes their is preexisting conditions on these policies.

[M.S. Bellows, Jr. - Huffpost Blogger]

Actually, the Administration (and Baucus) DID build themselves negotiating room; apparently they just didn't envision negotiating to public option, but away from it. That's what Baucus' announced "amendments" today are: a preplanned concession designed to woo progressives into supporting it. http://www.huffingtonpost.com/m.s.-bellows/legs-on-a-pike-understand_b_294166.html

It's frustrating gamesmanship for anyone who really cares about this, as Marcia does and points out so well in this piece!

[marinara]

I ask b/c i want to know, the blog mentions that funds are diverted from medicare/ medicaid, but can you document this so I can pass this info on?
sincerely thanks

[thnk4selfagain]

Faved. The Baucus / Obama bill seems to be an accurate label. Ms. Angell tells it like it is - or will be. More people than the Dems suspect will not be steamrollered by the gov't into to giving hard earned money to the unreformed insurance / healthcare industries. The Democrats think that two wrongs make a right; and as long as they have GOP, lunatic townhallers, and teabaggers, they presume that they come off as reasonable leaders.

It used to be that Dems screwed around while GOP screwed the country; now it seems to the the inverse.

[LynnW49]

Excellent article, a clear statement of what is wrong with the Baucus bill. An interesting parallel with the finance industry's massive bailout emerges. That, too, poured money into a dysfunctional system with no systemic changes. This appears to be the pattern of Congress and this president: Say reform, enforce the status quo. And we pay for it.

[WinterParkMom]

The REAL reform and publicoption:
Coverage for EVERYONE who applies
Structured premium payments of not more than 100 per individual, 300 per family
Deductibles capped at $2000 and based on income (means testing every year like the va)
No mandates forcing people to purchase insurance (a windfall for private carriers)
No triggers (also a windfall to private carriers)
No subsidies to private insurance carriers
No taxes on employer provided benefits
If someone has private insurance and wants the public option, they can drop private with no problem and be covered immediately under public.
No mandates on employers to buy into the public option to cover employees. Has to be free choice.
Everyone with coverage gets treated for new or pre-existing conditions.
Fairly negotiated reimbursement to private pracitce, specialty doctors and hospitals
Fairly negotiated prices for medications, even on name brand stuff which has no generic equivalent.
AND MUST BE EFFECTIVE IMMEDIATELY. Within 1 month of the above bill passing, Americans must be able to start buying in and using it.
It must be administered by an autonomous federal agency. Monies paid in must not be co-mingled with any other money, does not go into the general fund so it can be looted.
The ONLY payouts from this fund will be for: payments to practicioners, pharmacies and admin. In 5 years if we see significant overages, those overages will only be used to suplement medicare and fund medical research and maybe scholarships.
See my next post on funding

[WinterParkMom]

47 million un insured
20 million under insured
Subtract 10 million poor/indigent/mentally ill, etc, who are uninsured and will have to get free care = 37 mill un-insured who can pay.
18.5 million can pay $50/mo = 925,000,000
18.5 mill can pay $100 = $1,850,000,000
20 mill under insured will switch and can pay $100 = 2,000,000,000
That is a grand total of $4,775,000,000
That is FOUR BILLION, SEVEN HUNDRED SEVENTY FIVE MILLION DOLLARS IN PREMIUM PAYMENTS PER MONTH. FIFTY SEVEN BILLION THREE HUNDRED THIRTY MILLION PER YEAR IN PREMIUMS FOR ONE SET OF PEOPLE.
That does'nt count the millions who'll switch from private companies if they can pay $100 or 200 per month and have their entire family covered even with pre-existing conditions. Repeal bush tax cuts asap another 700 billion.
After thinking about it more, institute a 1 penny federal sales tax on EVERY item. I can hear the opponents shouting about making the poor poorer, but my statement is 1 cent on each item NOT on every dollar or hundred dollars. From candy bars to big screen tv's to your house. 1 cent on everything. If your grocery bill was $100. for 53 items, your bill would be $100.53. That's not putting people in the poorhouse especially when we've been dealing with price increases. Also, if you're saving 300-500 per month on insurance, you have that money to spend and put back in the economy, save, or invest.

[Tim303]

Sales tax is regressive. What about an income tax hike on those earning more than two hundred and fifty kay?

[arktig]

Excellent article. The betrayal of Democratic leadership is becoming clear to more and more people. We have two right-wing parties one of which is also a left demagogue. It's not hard to find a reasonable health care reform plan, just take Canada's for a blueprint. It's hard to awaken the people to the fact that they were sold out and to craft some response to that reality. This is the really, really important issue.

[JDM73]

Yes, Baucus's "reform" bill has Obama's blessing. Those of us who can admit that will continue to fight (albeit against enormous odds) for true reform, and those who can't will congratulate the president for all the wonderful things he's doing for the American people.

It's sad.

[AJH]

If when a bill is announced wall street increases to stock value of the companies regulated it is a bad bill.

[Jimmyboyo]

great article