As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, September 07, 2009

The "Less Quality Now!" Plan

The real kicker to the Baucus draft plan in today's New York Times is squirreled away near the bottom of the article. The top-line stats include the tax on more expensive health care policies, seen as a way to get at the employer deduction, where a giant pile of money exists in health care. Then there's the mix of expanding Medicaid up to 133% FPL, subsidies inside the insurance exchange for up to 300% FPL, with assurances that people up to 400% FPL would not pay more than 13% of their income in premiums. There is no public insurance option or a trigger for one, and the concept of co-ops is strangely not mentioned at all in the article (UPDATE: Per WSJ, there are co-ops in the plan). There are limits on out of pocket expenses, albeit higher limits than in the other bills ($6000 for individuals, $12000 for families). There's no talk of either an individual mandate or an employer mandate. So there are some holes here, but if it follows the pattern of the other plans, you're ensured coverage if your employer provides it or if you make so little that you qualify for Medicaid. If you're over 65, you're on Medicare. If you fall in between all of that, you go to the exchange, and can qualify for subsidies to afford coverage.

The plan is expected to cost $850-$900 billion over 10 years, but given the coverage subsidies and Medicaid expansion, I can't see that number being so low. Plus the talk in Washington, apparently, is about a $700 billion dollar bill. So how can that all square? By allowing insurers to offer crap coverage.

Coverage under Mr. Baucus’s plan would, by some measures, be less extensive than the least generous of three levels envisioned in a bill approved by three House committees.

To compare health plans, experts often focus on the percentage of medical expenses paid by insurance, on average, for a given population. This figure ranges from 70 percent to 95 percent under the House bill’s options, but it would be less than 70 percent under Mr. Baucus’s proposal.

The only way to keep insurance premiums down for the poor, and therefore keep the subsidies down, is to make the coverage less generous. And the insurers would only pay for covered expenses. Anything not covered by the plan would go directly to the consumer. Someone making $20,000 a year would still be on the hook for up to $6,000 in medical bills under this plan, and that doesn't include their premiums or non-covered expenses. Insurers, then, get off the hook for a huge chunk of medical costs while having to pay a nominal tax, and the goal is actually to have them not pay it at all, but simply to discourage companies from buying good insurance policies for their workers. And you would still see plenty of medical bankruptcies. Virtually everyone's health coverage gets worse under this Baucus scenario. I don't remember "Less Quality Now!" being part of any sloganeering on the reform side.

The real problem is that Washington is choking on the cost of providing health coverage to those who needed it. They don't want to use any external taxes or mechanisms, and they don't want to cut into industry profits to pay for the bill inside the system. So we get an ever-reducing price tag, now around $700 billion over ten years. Ezra Klein notes that these same fiscal conservatives all voted to eliminate the estate tax on ridiculously wealthy Americans, to the tune of $750 billion over ten years. That money would have entirely accrued to the deficit, while Democrats are consumed with being responsible and paying for this health care bill. It's really all a matter of priorities - help millions of uninsured people get the critical care they need, or give Paris Hilton a tax cut. George Bush financed practically every new program he brought into being by borrowing from China and adding to the debt. But the deficit only matters when there's a Democrat in the White House.

The Baucus plan gives new meaning to the term "aiming low." We'll know by Wednesday if the President agrees.

...Josh Marshall hits something I've been saying for a while.

You 'solve' the problem of the uninsured by passing a law forcing them to buy health insurance which, by definition, most a) cannot afford or b) are gambling they won't need because they're young and healthy. Either you end up with low subsidies which still leave it onerous to buy, thus creating a lot of disgruntled people, or you get generous subsidies, which cost a lot of money.

It's sort of like reform with all the cool political downsides but none of the reform.

A bill that criminalizes you for not buying health insurance, and then makes that health insurance demonstrably worse, will be an unmitigated disaster for the Democratic Party.

Labels: , , , , , , ,