Baucus Setting Aside Talks on Public Plan To Focus on Other Aspects of Health Overhaul Legislation

At a meeting with reporters on Friday, Senate Finance Committee Chair Max Baucus (D-Mont.) said he will temporarily set aside talks on a new public insurance option to focus on maintaining employer self-insurance plans, CQ Today reports. Self-insured companies qualify for tax exemptions through the Employee Retirement Income Security Act. The federal law allows firms to create their own tax-exempt insurance plan -- a means of cutting costs by taking on the risks themselves -- as long as the plans meet federal standards laid out by ERISA. Firms contract with private insurers to administer the plans. Baucus said he would aim to preserve this self-insurance system while expanding private coverage and public programs such as Medicaid. He said, "We'll end up with more private insurance and more public insurance" (Armstrong, CQ Today, 4/24).

As for the creation of a new public insurance option, Baucus said that it is "on the table," adding that it "might be to the side a little bit, ... but it's still on the table." He added, "We're trying to get momentum going. We'll get to the public option a little later. Let's not forget: There's an awful lot more here than the public option" (Young, The Hill, 4/24).

Baucus said he would support a "system similar to Massachusetts," which allows residents to buy coverage through a "connector" offering plans that meet government-established benefit minimums. He also said, "I think the whole system should be more national, and the benefits have to be more national. You can't have benefits be one level in one state, and another level in other states." However, he said his goal is not to disrupt employer-sponsored plans. According to Baucus, "The system I envision is where self-insured companies, ERISA companies, can keep their own plans and manage health insurance in the way that they have. We're not going to change the ways self-insured companies handle health care for employees." As for workers at smaller firms that do not offer insurance and other people buying insurance on their own, Baucus said they could purchase insurance through the exchange that would be similar to the Federal Employees Health Benefits Program. He also said, "We have to reform the health insurance market" by guaranteeing that people are able to purchase insurance (CQ Today, 4/24).

Costs, Reconciliation
Baucus said one of the problems facing progress on health reform legislation is that it is "hard to get numbers" from the Congressional Budget Office on costs and savings related to potential changes in health care delivery, because "this is fairly new." He noted that such proposals include bundling hospital payments, rather than paying for individual services, and using medical homes to coordinate care. In addition, he said, "We're going to probably have to breathe new life into CMS," noting that he supports expanding the agency's ability to develop creative ways to oversee federal coverage that could be a model for private insurers (Edney, CongressDaily, 4/24). Experts have said hundreds of billions of dollars could be saved by reducing the cost of care in certain geographic areas and bringing those costs in line with the costs of more efficient areas. Baucus added, "Our job is to transfer that more broadly to the rest of the country, mostly through Medicare," adding, "We're really trying to get internal savings in the system" (CQ Today, 4/24).

Discussing the possibility of using the budget reconciliation process in the Senate, which would require 51 votes rather than 60 votes to pass overhaul legislation, Baucus said, "If we jam something down somebody's throat, it's not sustainable. I want something sustainable that's going to last." He added that even if instructions to use the process end up in the final budget, "We don't have to use it if we work together." He also predicted that the budget would be designed so that Congress can put off reconciliation until "very late in the year."

On Wednesday Finance Committee members will meet to discuss Baucus' proposals for reforming the health care delivery system. Two more "walk-throughs" in May will focus on extending insurance to more U.S. residents and how to pay for an overhaul. The committee hopes to have a bill marked-up by June and a final version passed by August (The Hill, 4/24).

Editorial
For those advocating making health care available to all U.S. residents, "the fixation on a public plan is bizarre and counterproductive," because that "position elevates the public plan way out of proportion to its importance in fixing health care," a Washington Post editorial states. According to the Washington Post, "It is difficult to imagine a truly level playing field that would simultaneously produce benefits from a government-run system." The editorial adds that Medicare is able to keep drug prices under control essentially by forcing private insurers to subsidize it. "Such power, if exercised in a public health option, eventually would produce a single-payer system," according to the Washington Post. If "that's where the country wants to go, it should do so explicitly, not by default," the editorial states. The Washington Post concludes, "Maybe it's possible to design a public option that aids consumers without undermining competition," but "it would be a huge mistake for the left to torpedo reform over this question" (Washington Post, 4/27).

Opinion Piece
Health insurance industry advocates that "have been frantically arguing" against including a public insurance option want "a new and 'reformed' health insurance system that works essentially like ours does today," syndicated columnist Marie Cocco writes in a Denver Post opinion piece. She says that the health insurance industry has offered to stop charging higher premiums to people with pre-existing health conditions "if only Congress and the Obama administration would continue to go along with a system more like the one we have now than the one that we actually need." Cocco writes that "for some time, what we've done is take the same stale approach that relies on the private sector and the presumed magic of the market to cure our system's chronic failures," adding, "So far we have 'reformed' the health insurance system by reinforcing precisely what's wrong with it." Cocco writes, "To do this again would yield precisely the same result" -- not a reformed system but "just another way for the insurance industry to game the one we already have" (Cocco, Denver Post, 4/25).