Baucus Makes Changes In Health Care Bill Language

NU Online News Service, Sept. 22, 4:24 p.m. EDT

WASHINGTON– Sen. Max Baucus, D-Mont., revealed he has made changes in the language he has proposed as the starting point for health care delivery system reforms, aimed at making care more affordable for low and middle income Americans.

Sen. Baucus unveiled his new draft today as the Senate Finance Committee he heads began to work through an estimated 564 amendments submitted by members of the committee. Sen. Baucus said he is hopeful that the bill can be amended and reported out of his committee this week.

Some of the changes, such as increasing the excise tax the plan would impose on insurers, would put more pressure on insurance companies.

Many of the changes represent an effort to short-circuit the amendment process by incorporating changes sought by members of his committee.

For example, the revised bill is aimed at reducing costs for older Americans by lowering the amount by which insurance companies could vary premiums based on age.

Specifically, the policy would prohibit insurance companies from varying premiums by more than a ratio of 4-1 for age.

The revised bill would increase the tax rate on so-called "Cadillac plans" to 40 percent, and increase the health insurance provider fee from $6 billion per year to $6.7 billion per year. This would be paid based on the market share of the insurer.

But, at the same time, the new bill would raise the threshold point where insurance companies would be subject to the "Cadillac tax" by $750 for individual plans and $2,000 for family plans for workers with high risk jobs or for non-Medicare retirees aged 55 and up.

Sen. Baucus also modified the plan to bar insurance companies from discriminating against employees of midsize and large companies by eliminating annual and lifetime limits for all plans participating in state exchanges and precluding midsize and large employers with group health plans from imposing unreasonable annual or lifetime limits on coverage.

But, to accommodate changes in the Health Savings Account system, the new bill would move the effective date of the limit of tax-free contributions to Flexible Spending Accounts (FSAs) to Dec. 31, 2010.

It would also move the increase in the additional tax for Health Savings Account withdrawals prior to age 65 that are not used for qualified medical expenses to Dec.31 2010.

The avowed object of the changes is to ease the cost of healthcare on the middle class by increasing the health care affordability tax credit, lowering the penalties for people who fail to meet the individual requirement to have health insurance and increasing the high cost insurance excise tax threshold for people whose basic health care is more expensive.

Sen. Baucus called the modifications "the first step in an important process that will continue to improve the bill."