Huffpost Politics
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Joe Sestak Headshot

The Baucus Bill: Right Step, Wrong Direction

Posted: Updated:

The health care reform bill passed by the Senate Finance Committee chaired by Sen. Max Baucus is not the reform we need and is not the reform we promised the American people. In its current state, the bill reinforces health insurance monopolies, does not provide access to affordable care for all Americans, and does not present a full and honest accounting of its costs. While I am encouraged that the Finance Committee has moved forward, I hope our Congressional leaders will embrace the legislation passed in my committee (Education and Labor) in the House that better controls cost, expands coverage, and improves care.

The Senate Finance committee is the last of five Congressional committees to advance a health care plan. It is the only one that lacks a public health insurance option.

The public option is crucial if we want to introduce competition and bring down costs. The current health insurance industry is highly monopolized, with a small group of insurers exercising an almost "cartel" like power to dictate prices and continually raise premiums and fees on American families. Nationwide, an astounding 94% of insurance markets meet Department of Justice criteria for being "non-competitive." In Pennsylvania, two insurance companies control 70% of the market; one company has 74% of all the insurance plans in Southeast Pennsylvania.

A public option will guarantee competition and, as it will not be subsidized by the government and will operate on a fair playing field, it will use market forces to bring down prices and raise the quality of care. As the Senate moves forward, it must incorporate a public option.

Our goal is to provide affordable care to all Americans, but the Baucus plan will leave about 16 million of the approximately 40 million uninsured Americans without coverage. The bill does not do enough to assist working families, and it even leaves out an additional two million people from the requirement to have insurance because they would not be able to afford it.

One flaw in the bill actually discourages businesses from hiring low-income workers. Instead of requiring employers to provide insurance, businesses that do not provide insurance have to pay a penalty if at least one of their employees needs federal assistance to purchase insurance. These employees would traditionally be lower income, working class individuals. This approach, though appealing to the business community, would establish a serious disincentive for companies to hire workers from larger or single-income families. This is a regrettable and unintended consequence that clearly has to be fixed.

Though the Senate bill may appear less costly than its House counterpart, the numbers do not tell the full story. The Senate Finance bill, unlike the House bill, ignores an impending 20% cut to Medicare doctors' payments that will occur as a result of current law and threatens seniors' access to their caregivers. The House bill confronts this issue and puts in place a long-term solution, while Senate Finance just kicks the can two years down the road in order to save costs now.

The Baucus bill also disguises cost by using Medicaid expansion to shift too much of the burden to the states. Medicaid will be a crucial component of any substantial health care reform, but it should not be used to make the cost of this reform seem less expensive, especially when many states are coping with budget deficits.

Funding of the plan also relies on an excise tax on higher cost or "Cadillac" insurance plans -- those costing more than $8,000 for individuals or $21,000 for families. Unfortunately, because this tax is pegged to overall consumer price inflation and not skyrocketing health costs, within the decade it will begin to hit "Chevy" insurance plans as well. We cannot pay for health care reform by making health insurance more expensive for working families.

Symbolically, the passage of the Senate Finance Committee bill is a big step -- every committee asked to produce legislation has done so -- and comprehensive health care reform is closer to passage than it has been in decades. Now, as we begin to meld various bills and proposals, let us not forget that the goal here is good governance, not political gamesmanship. The Baucus bill, in areas, creates perhaps as many problems as it solves. The House version does a better job of meeting the President's goals and should be the focus of our efforts. It is the meaningful, effective reform we promised, and owe, the American people.

Rep. Joe Sestak (PA-7) is a member of the Health, Employment, Labor and Pensions Subcommittee on the Education and Labor Committee. He is a Democratic candidate for U.S. Senate.

Register To Vote