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Senate Finance Committee Chairman Max Baucus on September 16 unveiled an $856-billion plan to reform health care that does not add to the federal deficit. However, the legislation still lacks GOP support and is certain to undergo a lengthy amendment process when the committee takes up the bill on September 22.
The mark, as expected, does not include a government-run insurance option but would create nonprofit, consumer-owned cooperatives, and the absence of the government option has cost the support of the more-liberal Democrats on the committee. Several Democrats have also expressed concern over the mandate on health insurance coverage for individuals and the economic burden it would place on lower income households. Baucus remains confident, however, that those members will eventually come around and back the bill. So far, no Republican members have said they will support the measure.
"This partisan proposal cuts Medicare by nearly a half-trillion dollars, and puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program," Senate Minority Leader Mitch McConnell, R-Ky., said in a written statement. "Only in Washington would anyone think that makes sense, especially in this economy."
"Unfortunately, we're operating under an artificial deadline set by the Democratic leadership and the White House," said ranking member of the committee Charles E. Grassley, R-Iowa, in a statement released on September 15. "I'm disappointed because it looks like we're being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began."
Baucus said he still believes his mark will ultimately receive the backing of some Republicans. "By the time we get to final passage in the committee, we will find Republican support," said Baucus. "There will be many amendments offered, some very good ones, and some of which I will support."
However, Senate Democratic Leader Harry Reid, D-Nev., said that, although he hopes for a bipartisan bill, he is ready to move the bill without Republican support if need be. Democratic leaders are prepared to use a legislative procedure known as budget reconciliation, which only requires a simple 51-vote majority versus the 60-vote threshold necessary under normal terms of debate.
The bill is primarily paid for through a 35-percent excise tax imposed on insurers if the aggregate value of employer-provided coverage is in excess of $8,000 for individuals and $21,000 for families, which the Joint Committee on Taxation (JCT) estimates will raise approximately $215 billion over 10 years. The other significant revenue- raisers include limits on flexible spending accounts in cafeteria plans, to $2,000, and changes to corporate information-reporting requirements. Overall, the financing proposals would raise $259 billion over 10 years. Additional revenue would be derived from fees imposed on pharmaceutical and medical device companies.
The America's Health Future Bill provides a tax credit to small businesses that offer health insurance to their employees with eligible employers receiving a credit for up to 35 percent of their contribution in 2011 and 2012. Once insurance exchanges are up and running in 2013, qualified small employers purchasing insurance through the exchanges can receive a tax credit for two years that covers up to 50 percent of the employer's contribution. The plan also proposes a refundable tax credit for low- and middle-income individuals to subsidize the purchase of health insurance.
Following release of the measure, the Congressional Budget Office (CBO) released its analysis, stating that the gross cost of the Chairman's Mark is $774 billion over 10 years. Finance Committee staffers do not question the CBO analysis, according to Finance Committee aides. Both numbers are accurate, depending upon whether related policy initiatives are scored individually or combined into a net score, they said. The $82-billion difference is principally attributable to this netting convention, according to the aides.
House Reaction
House Democratic leaders viewed Baucus' health care legislation as the next step in the process of passing comprehensive reform in 2009. The bill is viewed as a draft because it will be modified when it reaches a conference with the House, lawmakers said. House Speaker Nancy Pelosi, D-Calif., said House Democrats would be studying the bill to determine its impact on the cost of health care borne by families and businesses. She hopes that the Senate bill will be modified to better reflect House priorities that boost competition and force insurers to provide low-cost coverage. "I believe the public option is the best way to achieve that goal," she said.
House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., added that the Baucus bill will eventually lead to passage of comprehensive reform that President Obama will sign. Rep. Stephanie Herseth Sandlin, D-S.D., speaking on behalf of the House Blue Dog Coalition of conservative Democrats, said the Baucus bill meets the group's priorities of being deficit-neutral and bringing down the long-term cost of the health care.
White House Response
White House Press Secretary Robert Gibbs called the Baucus package "an important building block" for comprehensive health care reform but added that it does not reflect everything President Obama wants to see in a final plan. Noting that there are bound to be changes ahead as part of the legislative process, Gibbs said, "I don't think the President looks at today as the end."
Gibbs indicated that the White House is willing to make changes to the individual mandate proposal, including restructuring of the tax breaks to make health insurance more affordable to individuals. "I know that the president and his team will be working on ensuring affordability, structuring any benefit and tax credit so that it helps those that are looking for accessible and affordable insurance options," Gibbs said a press briefing on September 16.
Cash for Clunkers
On a separate issue, Gibbs said that the White House economic team is reviewing the popular cash-for-clunkers tax credit to determine whether it should be extended. Gibbs said the president's advisors are evaluating the impact of the tax credit on home sales and will come forward with a recommendation to the president. The White House had no further guidance on when the president would receive the recommendations.
By Jeff Carlson, Stephen K. Cooper and Paula Cruickshank, CCH News Staff
SFC Press Release: Baucus Introduces Landmark Plan to Lower Health Care Costs, Provide Quality, Affordable Coverage
Chairman's Mark: America's Healthy Future Act of 2009
Ways and Means Press Release: Chairman Rangel on Senator Baucus' Health Insurance Reform Proposal
CBO Analysis of Chairman's Mark
JCT Estimated Revenue Effects of the Revenue Provisions Contained in the Chairman's Mark of the America's Healthy Future Act of 2009, JCX-35-09
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