Elements of Baucus Health Plan

In next several weeks, Senator Baucus (D-Montana) says he will unveil the much awaited Senate Finance Committee’s plan to control costs, protect consumers against “unfair” insurance industry practices, and put America back on a path towards fiscal sustainability (Max Baucus, “The Senate if Ready to Act on Health Care,” WSJ, September 16, 2009). According to the Kaiser News, here is what we know about the plan will contain;

• Provide tax credits to small businesses that offer insurance at work.

• Prohibit health insurance companies from denying coverage to individuals with pre-existing health problems.

• Allow health insurers to vary premiums based on three factors: tobacco use, age, and family composition.

• Allow states to form compacts with other states to permit for the interstate sale of health insurance.

• Establish state-based health insurance exchanges to help consumers compare insurance plans and costs based on four benefit coverage options ranging from minimum (bronze) to comprehensive (platinum).

• Allow for a catastrophic coverage plan for young adults.

• Require all U.S. citizens and legal residents to have health insurance or pay an annual fine of up to $3,800 per family.

• Require employers with more than 50 full-time employees tp pay an annual fee of $400 per employee, if they do not offer health insurance at work.

• Authorize funding for the Consumer Operated and OrientedPlan (CO-OP) program to encourage the creation of nonprofit, member-run health insurance companies in every state .

• Expand Medicaid coverage to individuals not currently eligible..

• Impose a 35% excise tax on insurance companies and administrators that offer insurance plans that cost more than $8,000 for singles and $21,000 for families

• Limit contributions to Flexible Savings Accounts to $2,000 per year..

• Impose annual fees on insurance companies ($6 billion), medical device manufacturers ($4 billion), pharmaceutical manufacturers ($2.3 billion), and clinical laboratories ($750 million).

There is plenty to chew on here. Much of the plan – individual and business mandates to compel coverage or be fined, annual “fees” (in less polite terms, known as “taxes”) imposed on health insurers, device makers, drug firms, and clinical laboratories to the tune of $ 13.05 billion, excise taxes on high end plans, insurance portability between states and health exchanges in every state.

We shall see if this “plan” passes political muster..