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Baucus Health Plan: Good start, but major change needed

First the good side of Senator Baucus and his finally-released health plan which, despite months of discussion, still has no Republicans signed on. Insurance companies would be banned from charging more for pre-existing conditions and offering cut-rate “Swiss cheese” health plans. Lowest income families would get coverage through Medicaid. Individuals and people in smaller businesses could choose from a menu of health plans with standard packages. Hospitals must meet strong new community benefit and charity care requirements.

Now for the bad news. The Baucus plan would simply not provide the subsidies needed to make health coverage plans affordable for many low and moderate income families. It also wouldn’t have a strong public plan to help contain health costs but establish so-called “co-op” state plans – an idea that’s basically been tried and has failed here in NC over a decade ago. These are two glaring defects that must be remedied before going forward. With her work on the Senate Health Committee’s health bill, our own Senator Kay Hagan is in a unique position to help Senator Baucus and others understand the importance of affordable coverage and cost controls.

To see how bad the bill is for affordability take a look at two examples focused on low and moderate income families from the Center on Budget and Policy Priorities below. The Baucus bill would require premiums nearly five times larger than the ones supported by Senator Hagan in the Senate Health Committee’s bill released last month. In addition, premiums would be three times higher than those proposed in the House reform bill:

For example, a family of three at 133 percent of the poverty line (which would have gross income of $24,312) would have to pay $1,132 per year in premiums (or 4.7 percent of income) under the Baucus plan, compared to $365 and $243 per year under the House and HELP bills, respectively. A single individual at this income level (who would have income of only $14,404) would have to pay $670 per year toward premiums under the Baucus plan, compared to $216 under the House bill and $144 under the HELP bill. People at this income level would either have to pay these substantial premiums or face a significant penalty.

Many moderate-income people also could likely have significant difficulty affording insurance. A family of three making $46,000 per year — approximately 250 percent of the poverty line — would have to pay approximately $4,800 — or 10.5 percent of its income — to purchase insurance. This would impose considerable burdens on many families, particularly in view of what they already have to spend on necessities. By comparison, under the HELP bill, the family would pay about $2,600 (5.6 percent of income), while under the House bill the family would pay $3,700 (or 8 percent of income). These figures are for the premiums alone; deductibles and co-payments would impose additional costs.

Many of the families we’ve been talking to all across North Carolina could never afford these kinds of premiums for insurance. For them, the Baucus plan isn’t much help at all.

The other issue – costs – is just as important. Without a strong public plan option, insurance companies will be back to business as usual. That business is making money and they’ll be making even more of it with plenty of guaranteed new customers without having to change any of their current practices to compete with a public health plan option who isn’t paying top executives millions of dollars.

So in the end, while the Baucus plan isn’t a bad start, it needs some serious emergency surgery to make it into something we can all live with.

14 Comments

  1. Kimberly

    September 18, 2009 at 12:20 pm

    Add the costs up for a family of 7 comprised of 3 children with Cystic Fibrosis, 1 child with a TBI and Epilepsy, 1 healthy child, and the mom with symptoms and preliminary diagnosis of MS and the dad with digestion problems. The co-pays are unaffordable, the premiums are outrageous! Families such as this will be fined, which they can’t afford to pay, because costs higher than income. The only possible solution for families such as this is to have a Public Health Plan that is subsidized.

  2. Single Payer Action

    September 18, 2009 at 12:39 pm

    was just watching Stephie Woolhandler on PNHP on Democracy Now! this AM, and she says that the Baucus plan is “a complete sell out” to the for profit insurance industry.

    Its too bad that Time Warner Cable Channel 10 doesnt air this vital TV news show.

  3. DR

    September 18, 2009 at 12:46 pm

    I sympathize Kimberly. What we need is a single payer, yes socialized plan. Our leaders did not even have it on the table for discussion. Now they appear to have dropped the government option. Which I doubt would have been very affordable anyways. This is our chance to change healthcare, what we get now we will have to live with for the foreseeable future. We need to tell them NO! We supposedly have democrats in charge if we are going to get meaningful healthcare reform and not just giveaways to the healthcare corporate intrests we need to do it now. What Bauccus has offered is not even close.

  4. […] original post here: Baucus Health Plan: Good start, but major change needed Share and […]

  5. James

    September 18, 2009 at 1:04 pm

    Good start?

    I guess if you consider loading a thousand extra tons of dead weight into your airplane before you start to taxi down the runway a “good start” … then this certainly qualifies.

  6. Tom

    September 18, 2009 at 1:15 pm

    oh well guess us peeps scrambling for individual coverage will have to be content with $5000 deductible plans paired with a Health Savings Account. At least I didnt gigged on pre-existing conditions when I applied with Big Blue this go around.

    Still got my yellow and black sign I picked up at the rally a few weeks ago saying “Insurance Company Profits Are Bad For My Health”.

    Doesnt look like we are any closer to taking the profit out of medical services thanks to the spineless Democrats who have totally capitulated.

    Thanks for nothing Obama1

  7. Adam Searing

    September 18, 2009 at 1:23 pm

    I thought I was clear in the post, but let me just be crystal clear! The Baucus plan isn’t worth supporting unless it makes health insurance hugely more affordable for families and it takes steps to give the insurance companies some real competition through a public plan.

    You just can’t write off the entire thing though – it does spend $800 billion or so, gets lots of families into Medicaid, bans nasty insurance company practices, and has a great section on requiring hospitals to do much, much more to justify their nonprofit status – ie not billing people big $$ who just can’t pay.

    These are all good things. Take them, combine them with what’s in the House bill, and a few things in the other Senate bill, and it might not be pretty, but we might have plan that we can all live with.

  8. Kimberly

    September 18, 2009 at 1:33 pm

    Adam, I completely agree with the points that you made. Unfortunately, the Republicans are doing everything that they can to refuse to come up with a decent compromise that will actually help families. If we can’t have a single payer then at the least they should take all of the proposals and find a compromise that works for everyone regardless of health or income situation. The increase in Medicaid caps will help some people but there are far too many families that will still find the costs of qualifying for Medicaid and the costs of private insurance too steep. We have sacrificed everything we can to maintain qualification for our children with special health care needs and this leaves us no disposable income for purchase of private insurance. We should not be forced into poverty nor have to sacrifice so much because we have multiple children with special health care needs.

  9. Evelyn

    September 18, 2009 at 2:02 pm

    Good unless you are a laid-off fifty to sixty year old with a spouse. Only the richest of rich can afford to pay $5000 to $7000 a MONTH for health care once they come off Cobra. The Baucus plan allows insurance companies to charge the elderly 5X (five times) the normal policy rate. And even more depending on where you live in the country.

  10. DR

    September 18, 2009 at 2:22 pm

    I still have no idea what I would be getting for my $400 a month, which my family of 3 making close to $48k a year would have to pay. What would the co-pays and deductible be? Would that include dental and eye? Chiropractic? The Devil is really in the details when it comes to healthcare and without knowing what would be covered under the bill it is really hard to compare. Currently through my work I pay about half what I would under the plan (obviously my work is picking up a chunk) but will my work decide to stop the healthcare plan? Then what?

  11. […] Original post: The Progressive Pulse – Baucus Health Plan: Good start, but major … […]

  12. Louie

    September 18, 2009 at 7:02 pm

    is 2013 the start date for BaucusCare?

  13. […] we have noted, the initial health care proposal released by Senate Finance Committee Chairman Max Baucus does not […]

  14. Ross Wolf

    September 24, 2009 at 1:27 pm

    Will IRS Lien Your Property/Salary to collect penalties if you do not buy Health Insurance? Under this Health Plan, it appears IRS would be the agency that determines who has acceptable health insurance. Sen. Baucus Health Bill mandates health insurance companies provide medical coverage for Citizens with preexisting conditions, but fails to clarify if insurance has to be affordable. The Baucus proposal calls for charging individuals and families large Opt-Out penalties that do not buy health insurance, unless they are poor: but the proposal does not clarify who is poor: Would millions of Americans that own homes or derive their living income from an investment, but have no money to buy health insurance, qualify as poor? If No, those Americans would be charged penalties for opting-out because they could not afford health insurance. Gov. forcing people to buy health insurance or pay penalties would cause financial hardships, perhaps even foreclosures.