Sen. Max Baucus' "bipartisan" health reform bill excites neither Democrats nor Republicans.

How to fix health policy.
Sept. 16 2009 7:22 PM

Zen Health Reform

If a finance committee chair introduces a bill and no one votes for it, does it exist?

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Max Baucus. Click image to expand.
Max Baucus 

The good news is that Sen. Max Baucus has finally produced a bipartisan health reform bill. The bad news is that it's bipartisan only in the sense that both Democrats and Republicans on the finance committee are threatening not to support it.

Even my e-mail program hates this bill. When the finance committee e-mailed a press release this morning summarizing the chairman's mark and linking to its text, my copy landed in my junk e-mail folder, along with press releases from Oxfam America and the Minneapolis Star-Tribune. That never happened when I got press releases from the Senate health committee, even when it was clogging my inbox with hourly pool reports about Sen. Ted Kennedy's funeral cortege.

Appearing in the finance committee hearing room for a press conference this afternoon, Baucus wore a gray pinstripe suit, a blue-and-white-dotted tie, and a frozen smile. "This is our moment in history," he said. A thought cloud instantly formed above the gathered reporters. Our? Baucus was the only senator present. Baucus said there will be Republican support for his bill, and "there's no doubt in my mind" that his fellow Democrats will support the bill, too. "We've met over 100 hours and there are no real policy deal-breakers," he said.

In fact, there are several. In a Sept. 16 press release, ranking finance committee member Chuck Grassley, R-Iowa, mentioned "costs to taxpayers" (even though the Congressional Budget Office estimates the bill would reduce the deficit by $49 billion over the next decade), "affordability for individuals" (Grassley wants to remove the "individual mandate" requiring everybody to buy health insurance), "preventing taxpayer funding of abortion services" (even though the bill leaves unaltered a current ban on federally funded abortions), and "enforcement against subsidies for illegal aliens" (even though the bill doesn't extend subsidies to illegal aliens). Talking today with Iowa reporters, Grassley alternated gripes about the Democrats' rushed timeline for a bill with equivocations over whether he would support it.

Then there's Jay Rockefeller, D-W.Va., who was cut out of the bill-writing process even though he chairs finance's health subcommittee. "There is no way in its present form I can vote for it," Rockefeller said yesterday in a conference call. For Rockefeller, the deal-breakers are the absence of a "public option" government insurance program, the bill's stinginess in subsidizing the mandatory purchase of health insurance, and certain changes in Medicaid and the State Children's Health Insurance program. According to the New Republic's Jonathan Cohn, who was on the call, Rockefeller suggested that four to six Democrats on the finance committee had similar feelings. If Rockefeller and even one other Democrat (say, Ron Wyden, D-Ore., who's also on record voicing serious objections to the bill's stinginess with premium subsidies) voted against the bill, that would be enough to sink it (assuming a party-line vote). If Baucus persuaded swing-voter Olympia Snowe, R-Maine, to support the bill, defections by Rockefeller and two other Democrats would doom it.

Snowe, in a statement, pledged to continue to work toward "a bill that I, and hopefully other Republican members of the Finance committee, can support." Her deal-breakers are "ultimate affordability to both consumers and the government" (in her moderate way, Snowe worries simultaneously that the bill spends too little and too much), as well as "ensuring appropriate competition in the health insurance exchange" (but don't misconstrue this as support for a public option, which she doesn't, except in the useless form of a "trigger").

Stinginess is the bill's biggest obstacle to passage. To win support, Baucus will have to make the Congressional Budget Office love his bill a little less. This is the first time I can remember when the CBO estimate of a bill's cost was actually lower than the bill sponsor's: Baucus put the bill's 10-year cost at $856 billion, while CBO put it at $774 billion. The discrepancy, which involves how to score changes to the Medicare and Medicaid programs, is too boring to go into. Both Baucus and the CBO agree that the bill's revenue provisions will more than cover its costs over 10 years.

It won't surprise regular readers of this column to learn that the absence of a public option in the bill (Baucus creates health cooperatives instead) strikes me as a serious problem. But it probably won't pose a serious obstacle to committee passage. Another aspect of Baucus' bill likely to trouble committee members more is that it structures an employer tax in such a way as to discourage the hiring of low-income people. (The Center for Budget and Policy Priorities, a liberal nonprofit with a sterling reputation for number-crunching, explains this here.)

The idiocy of creating a special type of private health-insurance plan just for the under-25 set does not, at the moment, endanger the bill's chances in committee, but should I manage to get people stirred up (see "Suffer the Little Children"), this provision will be easy to jettison. Maybe it was my imagination, but when I asked finance committee aides at a background briefing today for the rationale behind this option, they seemed slightly embarrassed by the lameness of their own explanation, and made sure to mention that it was a priority for Baucus. "You want to make sure they can afford the coverage," one person explained. But isn't that what the premium subsidies are for? Also, it's an "inducement" for young people to get health insurance. But isn't the individual mandate's financial penalty to those who don't purchase it inducement enough?

Is there anything one can say in favor of Baucus' bill? Ezra Klein, the Washington Post's indefatigable health care and economics blogger, found one  thing. A problem with the other health reform bills concerns the "health exchanges"—the government-created health insurance marketplace for both private insurers and a public-option government insurer in the other bills, and for private insurers only in Baucus'. To be eligible to buy a policy in the exchanges, you have to work for an employer who doesn't provide health insurance. The other bills limit participation to employees of small businesses, defined as those with no more than 20 (in the House bill) or 50 (the Senate health committee bill) employees. Baucus' bill will initially open the exchanges up to businesses employing up to 100 people. Over time, it will open them up to all businesses, regardless of their size. That's a significant improvement.

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