Baucus Introduces $856 Billion Health Care Reform Bill

Senate Finance Committee Chairman Max Baucus, D-Mont., has introduced his own version of long-awaited health care reform legislation, without a public option for health insurance.

The bill, known as America’s Healthy Future Act, would instead set up Web-based insurance exchanges that would standardize health plan premiums and coverage information. Consumers would also get access to a choice of nonprofit, “consumer-owned and oriented plans,” also known as co-ops.

The bill would create health care affordability tax credits to help low- and middle-income families purchase insurance in the private market, and provide tax credits for small businesses to help them offer insurance to their employees. The insurance exchanges would enable people to determine whether they are eligible for health care affordability tax credits or public programs, and would enable consumers without access to the Internet to enroll through the mail or in person in various locations.

Baucus’s committee has been wrangling over the contours of a health insurance plan after three other committees in the House and one in the Senate passed their own bills before the August congressional recess. He has been negotiating with the so-called “Gang of Six” in his committee to achieve bipartisan agreement on a plan, but so far that has proven to be elusive. While he said he will continue to negotiate on the bill, Baucus released the draft legislation, known as a “Chairman’s Mark.”

The bill contains provisions that would bar insurance companies from discriminating against people based on health status, or from denying them coverage because of pre-existing conditions, or imposing annual caps or lifetime limits on coverage. Baucus pledged that the bill would not add to the federal budget deficit.

“The Finance Committee has carefully worked through the details of health care reform to ensure this package works for patients, for health care providers and for our economy,” he said in a statement. “We worked to build a balanced, common-sense package that ensures quality, affordable coverage and doesn’t add a dime to the deficit. Now we can finally pass legislation that will rein in health care costs and deliver quality, affordable care to the American people.”

Ranking member Charles Grassley, R-Iowa, bemoaned the timetable set by the White House and his Democratic colleagues.  “Unfortunately, we’re operating under an artificial deadline set by the Democratic leadership and the White House,” said Grassley in a statement. “I’m disappointed because it looks like we’re being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began.”

The other Republican members of the Gang of Six — Mike Enzi, R-Wyo., and Olympia Snowe, R-Maine — also said they could not support the Baucus proposal.

Senate Minority Leader Mitch McConnell, R-Ky., expressed early opposition to Baucus’s draft legislation. “This partisan proposal cuts Medicare by nearly a half-trillion dollars, and puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program,” he said. “Only in Washington would anyone think that makes sense, especially in this economy.”

Some Democrats criticized the lack of a public option in the bill, including Jay Rockefeller, D-W. Va.  Another member of the Finance Committee, Ron Wyden, D-Ore., criticized the provision of tax subsidies only to families who had spent 13 percent of their income on health care costs. “I personally think there is still a lot of heavy lifting to do,” he told the Associated Press.

To help pay for the estimated  $856 billion cost of the package, Baucus’s draft legislation would levy a nondeductible excise tax of 35 percent on insurance companies and plan administrators for any health insurance plan that is above the threshold of $8,000 for singles and $21,000 for family plans. The tax would apply to the amount of the premium in excess of the threshold. It would apply to self‐insured plans and plans sold in the group market, but not to plans sold in the individual market. The threshold would be indexed for inflation, and a transition rule would increase the threshold for the 17 highest-cost states for the first three years.

Another proposal would require employers to disclose the value of the benefit provided for each employee’s health insurance coverage on the employee’s annual Form W‐2. Other proposals would limit the amount of contributions to health Flexible Spending Accounts to $2,000 per year, beginning in 2013, and eliminate the deduction for employers who maintain prescription drug plans for their Medicare Part D eligible retirees, beginning in 2011.

The bill would also impose new annual flat fees on various industries, including pharmaceutical manufacturers, medical device manufacturers, health insurance providers and clinical laboratories.

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