Sen. Max Baucus Unveils Health Bill Without Public Option

NU Online News Service, Sept. 16, 12:07 p.m. EDT

WASHINGTON–An $700 billion-plus compromise bill calling for cooperatives to provide health care instead of the controversial government "public plan" was unveiled today by Sen. Max Baucus, D-Mont., the Senate Finance Committee chairman.

The legislation, expected to provide the best opportunity to secure a health care delivery system overhaul this year, will form the basis for legislative drafting within the Senate panel that will begin Monday.

The compromise legislation omits the so-called "public plan" of such concern to the insurance industry, as well as the equally controversial proposal for a so-called "Navigators" system that would bar insurance agents from providing advice and soliciting individuals and groups for coverage.

Joel Kopperud, a director of government relations for the Council of Insurance Agents and Brokers, said that as his group prepared to advocate for issues acceptable to agents, "we're encouraged that the government option is not included."

But, he added, "We are concerned that Americans accessing their insurance through any exchange have access to the same insurance professionals as those accessing coverage outside the exchange."

John Greene, vice president of congressional affairs for the National Association of Health Underwriters, said the committee hopes to complete its work by tomorrow.

Moreover, he and others hope that release of the compromise document will set the stage for the drafting of a proposal in the House more acceptable to his group.

Under the Baucus proposal, people will be allowed to get insurance through a co-op even though their employer offers insurance if the cost of the coverage exceeds 13 percent of their income.

"We feel that if someone is offered private insurance, they should not be given access to a co-op or even an exchange that will also offer lower-cost coverage," Mr. Greene said.

If too many people aren't included in a group, it will raise the cost of coverage to all others to an unacceptable level and raise the cost of insurance to the government.

He said the agents' industry will also be seeking to ensure there is an appropriate transition to the individual mandate that will require everyone to get insurance and will provide marketing opportunities for agents.

"There needs to be an enforcement mechanism to ensure compliance with the individual mandate," Mr. Greene said.

Sen. Baucus said the his draft bill would cost $856 billion over 10 years. But, later the Congressional Budget Office produced a lower estimate of $774 billion.

He contended that the "investment would be fully paid for," mostly through increased focus on quality, efficiency, prevention and adjustments in federal health program payments, without adding to the federal deficit.

Key issues that will be facing Sen. Baucus' effort to pass the measure include the fact that no Republican has so far signed on, although Sen. Olympia Snowe, R-Maine, has been courted by Democrats and the White House.

Other members of the so-called "gang of six" within the Finance Committee that have been working on a compromise bill but haven't yet signed on include Sen. Charles Grassley, R-Iowa, and Sen. Mike Enzi, R-Wyoming.

Sen. Grassley, a critical vote, said before the release of the base document he will continue to work toward a compromise agreement, but didn't totally commit himself.

Among his concerns was that the document he would support in the Senate would be undone through negotiations with the more-liberal House.

He also sought a commitment on several other issues, including language barring payment by the federal government for abortion and language that would ensure that illegal aliens not get subsidized for health care through a final bill.

But, he said, "we've been clear from the start that we're willing to stay at the table. There's no reason not to keep working until we get it right. In the end, legislation that impacts every American should have strong bipartisan support."

Under the legislation he is proposing, insurance companies would be required to issue coverage to all individuals regardless of health status.

Moreover, insurers would no longer be allowed to limit coverage based on preexisting conditions. But, limited variation in premium rates would be permitted for tobacco use, age and family composition.

Rating rules for the individual market would also apply to the small group market, as defined by states. This would include groups of one to 50 employees, but could include companies with up to 100 employees, depending on current state law.

The Baucus legislation would seek to make purchasing health insurance coverage easier and more understandable by using the Internet to present consumers with available plans.

His bill would create state-based Web portals, or "exchanges" that would direct consumers purchasing plans on the individual market to every health coverage option available in their ZIP code.

His bill would also give small businesses access to state-based Small Business Health Options Program, or SHOP exchanges.

These exchanges–like the individual market exchanges–would be Web portals that make comparing and purchasing health care coverage easier for small businesses, Sen. Baucus said.

In dealing with the transition to a reformed insurance market, Sen. Baucus proposed that once the insurance market reforms take effect, people who want to keep the insurance they have today can do so.

Plans would be allowed to continue to offer the coverage they offer today, and this coverage would be grandfathered, he said. "These grandfathered plans would only be available to those people who are enrolled today or, in the case of a small employer, to new employees and their dependents," Sen. Baucus explained.

People who qualify for the health care affordability tax credits in the reformed market would not be able to use the credits to purchase grandfathered plans, he said in addressing another issue of concern to agents.

Tax credits would be offered only to purchase plans created in the reformed market that meet the new benefit standards, he said.