Finance Committee Offers Scaled-Back Proposal

The Finance Committee turned out to be able to move admirably quickly toward drafting a pared-down version of their initial proposal, reaching a result that they hope the CBO will score as costing $1 trillion over ten years rather than $1.6 trillion over ten years. Ezra Klein was given an outline of their thinking. Basically, it looks like the $1.6 trillion proposal but scaled back. Instead of subsidies for people earning up to 400 percent of the poverty line, they’ll subsidize people up to 300 percent of the poverty line. And concurrent with that, the minimum level of insurance is being watered down. Medicaid will be expanded, but by less than was initially contemplated.

These kind of compromises strike me as fairly reasonable. There’s a case to be made that the CBO is scoring these health bills in an unduly unfavorable way. But that means that if we go with something cheaper, and the CBO turns out to have been unduly pessimistic there’ll be more money around than we thought to revisit this stuff and beef up subsidies and so forth. Alternatively, if the CBO turns out to have been right this means we’ll have a bill we can afford.

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What’s really missing here is the public plan. As Ezra says “For all the concerns about cost, there is no strong public plan able to negotiate low rates and implement aggressive reforms.” This is too bad, and not just as a token of socialistic goodness. The cost savings implied by a robust public plan would do a lot to resolve some of the financial issues that are making it difficult for Finance to offer coverage that’s as generous as they initially intended. Thus far, unfortunately, cost conscious centrist senators haven’t tended to look at the public plan in that light. But since any legislation will go through several rounds of ping-pong with more liberal outfits — HELP Committee, the House of Representatives — I hope there’s still some time to turn their thinking around.