In a recent letter to President-elect Barack Obama, a coalition of business and labor groups — the Business Roundtable, the National Federation of Independent Businesses, AARP and the Service Employees International Union — argue that “addressing skyrocketing health care costs is a critical component of stabilizing household, national and global economies” and warn that “inaction undermines the economic security of our families; limits the productivity of our work force; stagnates job creation and wage growth; and threatens to crowd out investments in energy, education and infrastructure.”
Today, Senate Finance Committee Chairman Sen. Max Baucus (D-MT) answers the call for reform with a detailed health care proposal designed to expand health care access and improve affordability.
The plan includes a mandate, requiring that all Americans obtain health insurance through an employer or the new Heath Insurance Exchange:
Requiring all Americans to have health insurance will help end the shifting of costs from the uninsured to the insured…This step is necessary for insurance market reforms to function properly and to send the cost shifting that occurs within the system. It is expected that the vast majority of American employers would continue to provide coverage at a competitive benefit to attract employees. Except for small firms, employers that choose otherwise must contribute to a fund that would help cover those who remain uninsured.
Baucus’ proposal expands Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) and opens “Medicare to people ages 55 to 64.” As the New York Times reports, “Medicaid would be available to everyone below the poverty level and could provide at least seven million more people with access to the program.” SCHIP “would be expanded to cover all uninsured youngsters in families with incomes at or below 250 percent of the poverty level ($44,000 for a family of three),” raising the income limit “in about half the states.”
Here are the guts of the proposal:
- A choice of public or private: Creates a “health insurance exchange,” where people could choose from among private insurance policies and a new public Medicare-like plan.
- End to discrimination: Prohibits insurers from denying coverage of preexisting conditions or age.
- More affordable coverage: Offers new tax breaks for individuals and small businesses to offset the costs of insurance.
- Easier to enroll: Ends the current ban against immigrants participating in Medicaid or SCHIP in their first five years in the United States.
- Focus on prevention: Uninsured would receive a “RightChoices” card that guarantees access to recommended preventive care.
- Payment reform: Refocuses payment incentives from quantity (fee-for-service) toward quality and value.
Baucus finances the plan by “eliminating, fraud, waste, and abuse in public programs,” ending overpayments in the Medicare Advantage program, increased transparency, and “careful reforms of medical malpractice laws that could lower administrative costs and health spending.” More controversially, Baucus also proposes revisiting “the current tax treatment of employer-sponsored health insurance…. a benefit valued at $245 billion annually.”