Senate Finance Committee Chairman Max Baucus (D-Mont.) on Tuesday unveiled his long-awaited compromise blueprint for healthcare reform, proposing new taxes on high-end insurance plans and offering nonprofit insurance cooperatives as an alternative to a controversial government-run option.
The unveiling marked an end to his marathon effort to win over substantial Republican support for a healthcare reform plan. Baucus’ plan lays down a vision designed to appeal to moderate and conservative Democrats, who will be key to any overhaul.
Liberals in the House and Senate have already spelled out their vision. With Baucus’ proposal, the range of potential reform options has solidified, since no final bill is likely to be substantially more liberal than the House version or more conservative than Baucus’.
President Obama’s speech to a joint session of Congress tonight is likely to further clarify the boundaries of a final compromise.
After a meeting with Baucus on Tuesday, none of the three Finance Committee Republicans who have been negotiating with him for most of the year would commit to backing the plan, according to a GOP aide briefed on the meeting. Baucus said he had to move forward in the committee with or without them.
“The rubber’s starting to hit the road,” Baucus said Tuesday. “We’re not going to dawdle.”
To draw moderates who object to the government-run insurance option, Baucus would provide federal funds to help set up nonprofit, state-level cooperatives in which consumers could band together to purchase health insurance.
Advocates of this approach, including Sen. Kent Conrad (D-N.D.), argue that these cooperatives could pressure private insurers to provide affordable, quality coverage in the same way that a government plan could. In many regions, a small number of companies often dominate the medical insurance market.
On Tuesday, several lawmakers praised Baucus’ efforts, including Sen. Olympia J. Snowe of Maine, a moderate Republican who has been working with Baucus and whom Democrats see as a crucial vote.
“There are a lot of promising elements. It’s a work in progress,” Snowe said, adding that she wanted to see a trigger mechanism setting up a government plan in case the cooperatives don’t work.
Sen. Debbie Stabenow (D-Mich.) said she was not troubled by the absence of a public option because the legislation will be “refined.” She said Baucus’ proposal was a “very, very good starting point.”
Baucus, who began sharing his plan with a bipartisan group of lawmakers over the weekend, proposes to help pay for his bill with a series of new fees on the health insurance industry as well as taxes on some employer-provided healthcare plans.
Like the other major Democratic proposals, Baucus’ plan would prohibit insurers from denying coverage to people with preexisting medical conditions, a cornerstone of the changes being pushed by the president and his congressional allies.
It would also require nearly all Americans to get insurance -- a provision that would create millions of new customers, which private insurers say they must have to offset the cost of dropping the restrictive rules that deny and limit coverage.
The Baucus plan would set up regulated insurance marketplaces operated by states, in which people who do not get their insurance through work could shop among plans offered by private carriers.
The proposal also would dramatically increase federal aid to Americans seeking insurance, expanding the Medicaid program for the country’s poorest residents and offering tax credits to other low-income people to help them pay their insurance premiums.
Democratic leaders have all but abandoned hope that more than one or two Republicans in Congress will back their effort to reshape the nation’s healthcare system.
They are instead laboring to bridge the divide between liberal Democrats, who demand a new government insurance plan, and more conservative members of the party, who have said they will never vote for such a plan.
That tension was underscored Tuesday as House Speaker Nancy Pelosi (D-San Francisco) insisted that a government plan must be part of healthcare legislation just hours after her senior deputy, Majority Leader Steny Hoyer (D-Md.), told reporters it was not essential.
Baucus’ plan does not include a mandate requiring employers to provide health insurance, as other proposals do. Instead, large employers that do not provide insurance would have to pay a fee for each of their employees that received federal subsidies to purchase insurance.
Individuals, meanwhile, could face fines if they elect not to get insurance. Under Baucus’ plan, families making more than three times the federal poverty level -- or $66,150 for a family of four -- could pay as much as $3,800 in fines.
To pay for a bill that Baucus estimated would cost $900 billion over the next decade, the senator is proposing new taxes on insurance plans worth more than $8,000 for individuals and $21,000 for families, and new fees for insurers, drug makers, device makers and clinical labs.
That drew sharp criticism from the insurance industry Tuesday. “New taxes on healthcare coverage will only make coverage less affordable,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington-based lobbying arm.
“That is the opposite of what healthcare reform is supposed to accomplish,” he said.
On the other end of the political spectrum, a leading consumer group also took aim at the Baucus proposal, criticizing a provision that could allow insurers more flexibility to sell plans across state lines.
“This is a huge loophole that the insurance industry has been seeking for decades,” said Jerry Flanagan, healthcare policy director of Santa Monica-based Consumer Watchdog.