The Wonk Room

Is The Senate Considering Lowering Benefit Standards To ‘Improve’ Affordability Measures? »

This afternoon, during a conference call sponsored by Families USA, Sen. Max Baucus (D-MT) laid out various measures to improve the affordability standards in the committee’s health care bill. Responding to my question about how to make the bill more affordable for American families, Baucus suggested that the Senate could increase subsidies, reduce benefit packages, or strengthen the penalties for Americans who don’t meet the requirements of the individual mandate.

Baucus said that it would be politically difficult to increase subsidies and did not suggest that the Senate was considering a public plan to help lower premiums and the costs of the actual bill. Instead, Baucus implied that the Senate may reduce the value of the minimal creditable coverage for so-called young invincibles and Americans in the exchange:

There are a lot of ways to address it, as you’ve said Igor. One is higher subsidies, but you know, we don’t want to go much over $900 billion total over 10 years. Another is to adjust the minimal creditable coverage provision that is under the bill…We’re 65% [of actuarial value] in the Senate. If that’s lowered to a lower number, that’s going to make health insurance less expensive. However, it’s going to mean lesser coverage too. There is some talk about, you know, even lower plan for — the popular term is — young invincibles. For people who are very young, say 25 or [2]6 or something like that, who would be able to purchase very low premium plans that might have a high– it’s a catastrophic plan — which may have a high deductible…..That would help coverage, that would help coverage all together and lowering to 65%, for the so called bronze plan, down to 60 would also help address affordability…

Listen:

“Raising the tax credit will address affordability, there are lots of different ways,” Baucus said. “And also the mandate if you will, the penalty. If the penalty is changed that will have an effect on coverage too. There are a lot of moving parts here.”

The Senate Finance Committee has already made reform more “affordable” by excluding some 2 million Americans from the requirement to purchase coverage and lowering the benefit standards would further undermine the goals of universal affordable coverage for all. Most progressives argue that the current benefit packages in the Baucus bill are already far below the standards offered to federal employees or most employer-based coverage. The young invincibles plan would allow younger applicants to enroll in cheaper but less substantive plans that may prove inadequate over time. For Americans in the exchange, insurers would have to cover 65% of the health care expenses of an average population; the remaining 35% would be picked up by individuals.

By lowering the minimal creditable coverage, the government would be asking Americans to pay lower premiums for a less substantive plan that could become wholly unaffordable if the beneficiary needs care. Here is a comparison of all the affordability and minimal creditable coverage provisions in the major bills:

Transcript: More »« Less

Despite Calling CBO ‘God,’ GOP Rejects Politically Inconvenient CBO Score Of Baucus Bill

The CBO’s score of the Senate Finance Committee’s health care reform bill isn’t winning over any converts. After a year of building up the budget office’s ‘bipartisan’ credibility– Sen. Chuck Grassley (R-IA) has repeatedly equated the CBO with ‘God’ — Republicans are now dismissing the office’s politically inconvenient conclusions.

The Congressional Budget Office estimated that the new version of the Senate Finance Committee’s health bill “will result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period” and would actually “reduce the federal budgetary commitment to health care.” But Republicans are stressing that the CBO analysis is “preliminary,” insisting that Democrats have a secret plan to scrap the existing health care legislation that “expands the role of the federal government in the personal health care decisions of every American.”

- Sen. Chuck Grassley (R-IA): “I think it’s going to be closer to a trillion dollars…It’s going to lead to a massive involvement of the federal government in health care.” [Fox News, 10/07/2009]

- Dick Morris: “If that sells well, they should list it under fiction on the best sellers list.” [Fox News, 10/07/2009]

- Michelle Malkin: “These are fantasy numbers, that’s the bottom line.” [Fox News, 10/08/2009]

Watch a video compilation:

The Baucus bill requires some substantial changes, but the Republican effort to invalidate the CBO scores is highly disingenuous. It’s hard to argue that you support bipartisan deficit-neutral health care reform and oppose a measure that incorporates pages of Republican ideas and actually reduces the deficit by $81 billion over 10 years. To make that argument, one must pretend that the Baucus bill is something it’s not.

To be clear, the bill is far from perfect and many progressives have their share of complaints. As Jonathan Cohn points out, the coverage provisions are “significantly lower than the projections from the House bill.” “In raw numbers, it’s the difference between 25 million people (Senate Finance bill) and 17 million (House bills) still uninsured ten years from now.” The Committee has some $71 billion (before it meets President Obama’s cost threshold of $900 billion) and could invest in higher affordability credits or improve affordability measures by allowing the Exchanges to “negotiate with plans for lower bids, encourage plans to form select networks, and exclude plans that do not offer good value and cost-effectiveness.”

Moreover, Congress should replace the proposed network of cooperatives — which, according to the CBO, are “unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payment — with a robust public option that could save the government as much as $150 billion over 10 years. It should eliminate the “failsafe” clause that “automatically” cut subsidies in the exchange to avert a projected increase in spending, strengthen employer-based coverage by replacing the bill’s free-rider provision with a pay-or-play employer mandate, and improve consumer protections by regulating the insurance plans of large self-insured corporations and lowering the amount insurers can charge older people for coverage. The Committee bill should also invest in long term care by adopting the Community Living Assistance Services and Supports (CLASS) Act, “a national insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become severely functionally impaired.” The legislation establishes a safety net for long term care needs and also generates new revenue for reform. The House bills and the Senate’s health committee both include the program.

The Baucus bill provides Congress with an important opportunity to build up and incorporate many progressive criticisms into the final Senate bill. After all, Republicans have demonstrated, once again, that they will paint even the most conservative health bill as an expensive government take-over of health care.

Cantwell’s ‘Basic Health Plan’ Amendment Is A Good Start, But It’s Not A Public Option

Several reports are describing Sen. Maria Cantwell’s (D-WA) ‘Basic Health Plan’ amendment — which would give states the option to provide health care coverage to people with incomes between 133% and 200% of the federal poverty line (about 75% of the uninsured) — as a “quasi public option.”

States would use their purchasing power to negotiate for more affordable coverage options, improve efficiencies, and even lower the health care costs within the Exchange (by shifting lower income and disproportionately sicker individuals into the Basic Health Plan), but they would have to contract with private insurers. And there ain’t nothing public about private insurers. From the amendment:

Under this amendment, the federal government would provide funds to participating states in order to allow such states to provide affordable health care coverage through private health care systems under contract….State administrations would seek to contract with managed care systems, or with systems that offer as many of the attributes of manged care as are feasible in the local care market. A minimum medical loss ratio of 85 percent would be required of all participating plans….State administrators should seek participation by multiple health plans to allow enrollees a choice between two or more plans, whenever possible. A participating health care system can be a licensed health maintenance organization, a licensed health insurer, or a network of health care providers established to offer basic Health Plan Services.

In other words, the federal government would provide states with funds to establish Basic Health Plans for lower income Americans that would be completely run by private insurers. As Ezra Klein explains, and Cantwell freely admits during their interview, the proposal is “entirely orthogonal to the public option debate. It doesn’t create competition or transparency or experimentation.”

And remember, states have to chose to do this, and if they do, they could only offer negotiated rates to a small relatively small group of people. At the end of the day, this plan, like any state-based proposal, would lack the market clout to lower overall health care spending across the board, reform health care delivery, or hold private health insurers accountable.

Large Companies Would Be Exempt From Insurance Regulations, Under Baucus Bill

On September 16, Sen. Jay Rockefeller (D-WV) announced that he would not vote for the Senate Finance Committee’s health care bill unless the committee replaced the network of cooperatives with a robust public option, increased the threshold on the excise tax, restored the CHIP program (the reform bill folded it into the Exchange), improved affordability measures, and regulated self-insured plans.

This last demand may be the least understood and most complicated aspect of health care reform. The Senate Finance Committee’s legislation does not require large employers that self insure to abide by the same rules and regulations as insurers operating in the Exchange or the individual health insurance markets. As Rockefeller explained during mark-up, “you are grandfathering in an unfairness in the insurance market, where you treat 50 percent of the American people in one way…and 46 percent in a very favored way without restrictions, without discipline.” “Most people don’t know that they are treated so differently. Most people don’t know that they have these restrictions on them,” Rockefeller said. Watch it:

Self-insured plans — which are regulated by a law called ERISA — do not have to accept Americans with pre-existing conditions, or remove caps on out-of-pocket or lifetime expenses. “As many as 73 million people, or 55% of those who get insurance through private-sector jobs, are covered in self-insured plans, according to the non-partisan Employee Benefit Research Institute. Workers are often not aware their plans are self-insured because employers hire insurance companies to process claims.”

Congress enacted ERISA in 1974 to allow companies operating across state lines to offer uniform benefit packages. The law establishes minimum standards for pensions, but allows self-insured companies to elude both state and federal regulations.

The initial draft of ERISA exempt employee benefit plans for health and pension from state laws, but subject self-insured companies to existing state regulations. Large corporations would have to abide by the consumer protections of the various states, or so it seemed. Before the final floor vote, Congress folded to big-business demands and inserted the so-called “deemer” clause, barring “self-funded plans from being considered insured plans subject to state insurance regulations.” Suddenly, self-insured companies were exempt from federal and state regulations. The fix was in.

Rockefeller has offered an amendment (C1) to apply health insurance market reforms to the large group and self-insured market. Large corporations are already lining up in opposition.

On Friday, the US Chamber of Commerce chief lobbyist Bruce Josten “sent out a memo this afternoon listing three ‘dangerous amendments’ the business community should weigh in on before the committee gets back to work on Tuesday.” Rockefeller C1 is the most dangerous:

This amendment will significantly and adversely impact larger employers and self-insured plans and the millions of Americans who count on their employer provided health coverage. The federal uniformity standard under ERISA (also known as the “preemption” standard) is critical to our health care system, especially the 170 million Americans receiving coverage from the employer-based system. Its hallmark feature is that it allows employers to offer uniform benefits to their employees, retirees and families without being subject to the conflicting patchwork of mandates, restrictions and costly rules that vary from state to state….This amendment would jeopardize employers’ ability to offer uniform national plans without interference by contradicting state rules. Benefits costs could soar.

But Rockefeller’s amendment would presumably subject self-insured plans to the new federal regulations, permitting large corporations to continue offering uniform plan. The Committee is expected to consider Rockefeller’s amendment this week.

48 Amendments To Protect Health Insurers’ Interests

On Thursday, Sen. Jay Rockefeller (D-WV) speculated that “if there’s anything which is clear, it’s that the insurance industry is not running this markup, but it is running certain people in this markup.” Indeed, in the last two and a half years, the health insurance industry has spent at least $585,725,712 lobbying Congress to protect its investments in Medicare advantage, defeat competition from a public option (or even a cooperative), and preserve policies that allow it to attract a disproportionate number of healthy applicants.

An analysis conducted by the Center for American Progress Action Fund of all 534 amendments has identified at least 48 amendments that directly reflect the industry’s wish list. And while the information below does not demonstrate a direct quid-pro-quo between an insurers’ contribution and a senator’s amendment, it raises an important question: Why are some senators so intent on protecting an industry that is partly responsible for creating the current health care crisis?

Watch a video compilation of senators arguing on behalf of the industry:

Industry ask: “We have strong concerns about the proposed funding cuts in Medicare Advantage.” [AHIP Letter, 9/21/2009]

Industry gets: At least 14 amendments that protect the 14% subsidy private plans receive for participating in the program.

Insurers ask: “We have strong concerns about the proposal for new, untested government-created health insurance cooperatives.” [AHIP Letter, 9/21/2009]

Insurers get: At least 9 amendments eliminating the mark’s network of cooperatives.

Industry asks: “We are concerned that the new national benefit standards – taking into account both the actuarial value requirements and provisions that provide unlimited access to any and all services – would impose higher costs.” [AHIP letter, 9/21/2009]

Industry gets: At least 4 amendments loosening benefits standards.

Industry asks: “Without system-wide cost containment provisions, the proposed new taxes on high cost plans and the proposed new taxes on key components of health expenditures would cause many Americans to spend more on coverage….We are concerned that these provisions will increase costs.” [AHIP letter, 9/21/2009]

Industry gets: At least 8 amendments loosening benefits standards.

Download a complete copy of the report HERE.

Stabenow Replies To Kyl: You Don’t Need Maternity Benefits, ‘But Your Mother Did’

This afternoon, while debating an amendment to prohibit the federal government from “defining the health care benefits offered through private insurance,” Sen. Jon Kyl (R-AZ) argued, “I don’t need maternity care, and so requiring that to be in my insurance policy is something that I don’t need and will make the policy more expensive.”

Sen. Debbie Stabenow (D-MI) interjected into Kyl’s remarks to remind him, “I think your mom probably did.” Watch it:

Kyl’s amendment would prohibit the government from defining which benefits should be included in a standard benefit package and would permit health insurance companies to design policies that exclude higher-cost beneficiaries. Currently, “it is difficult and costly for women to find health insurance that covers maternity care” in the individual health insurance market. According to a survey conducted by the National Women’s Law Center, the vast majority of individual market health insurance policies “do not cover maternity care at all. A limited number of insurers sell separate maternity coverage for an additional fee known as a ‘rider,’ but this supplemental coverage is often expensive and limited in scope.”

A well defined minimum benefits package would compel health insurers to provide basic services to all Americans. The Kyl amendment, which ultimately failed, would have allowed the industry to continue profiting from discriminatory practices. As former health insurance executive Wendell Potter explained in an interview with ThinkProress, insurers would like to move us all into “these limited benefit plans that are very skimpy and don’t cover you, don’t cover what you need. That way, when you do get sick, they’re not on the hook to pay you anything. They would love to have you enrolled in these.”

Schumer & Rockefeller: Final Health Bill ‘Will Include A Strong, Robust Public Option’

This evening, during a hastily arranged press call with reporters, Sens. Chuck Schumer (D-NY) and Jay Rockefeller (D-WV) predicted that the final health reform package will include a public health insurance option. “The health care bill that is signed into law by the President will have a good strong public option,” Schumer said.

“We are going to be all about it,” Schumer told reporters on the call. Both senators rejected the bill’s current network of cooperatives and Sen. Olympia Snowe’s (R-ME) trigger compromise and promised to introduce amendments that would establish a national public option. “We are going to have a full blown debate in the Finance Committee,” “Don’t count it out,” Schumer said. “We are going to keep it in the center of the debate as the bill moves through Congress”:

SCHUMER: This is the starting gate. And we know it will get better and better as we move on. But having said that, we’re going to have a full blown debate in the Senate Finance Committee because the more people learn about the public option, the more they like it. And even though a public plan may be an underdog in the Senate Finance Committee, don’t count it out. We’re going to work really hard to get the public option going and started and keep it in the center of the debate as the bill, the health care bill moves through Congress….Tomorrow is the opening day in our big fight, but it is going to be a fight that goes down all the way to the wire. And I’d like to make a prediction. The health care bill that is signed into law by the President will have a good, strong, robust public option.

ROCKEFELLER: And I agree with that.

Listen:

Rockefeller insisted that “we have a good shot of getting it [the public option] out of the Finance Committee.” “A co-op is not an alternative, a co-op can’t work. The alternative is the status quo,” Rockefeller said. “Don’t rule it out. Don’t fall victim to this feeling that it’s not going to happen. You’re creating a problem for us if that’s the way you’re feeling.”

Rockefeller also praised the committee for passing Rockefeller Amendment D10, which established a MedPAC-like panel of medical professionals who “would be required to implement policies that successfully reduce cost growth in Medicare by at least 1.5 percent annually.” “We did something huge this afternoon in the Finance Committee and that was we passed a MedPac plan.” “Everybody said that there is no chance this could pass. It cannot pass. Well, it passed 15-3 this afternoon in the Senate Finance Committee. So I don’t take a dim view on what we’re able to do. That is a game changer, which is probably, in terms of policy, the largest game changer in health care so far.”

While both Schumer and Rockefeller dismissed the co-op and trigger alternatives as ineffective, it was unclear if Schumer and Rockefeller believed that they could pass a public option that linked the plan’s reimbursement rates to Medicare. A similar proposal was introduced in the House bill, but was later modified in a compromise with Blue Dog Democrats.

Hatch Delays Mark-Up By Questioning Constitutionality Of Individual Health Mandate

During last night’s walk through of the Senate Finance bill with Committee and Congressional Budget Office staff, Sen. Orrin Hatch (R-UT) delayed and obstructed the mark-up process by asking waves of repetitive questions — that the staff had already answered throughout the hearings — and insisting that the individual mandate provision was unconstitutional.

Hatch filibustered amendments by peppering the staff with detailed queries and dismissing answers that departed from his ideology. On several occasions, Hatch lectured Chairman Max Baucus (D-MT) for allegedly caving to White House pressure and ‘rushing’ — after nine months of grueling negotiations — the legislation through committee. “At some point we ought to understand what’s in this God dong bill,” Hatch exclaimed after Baucus announced that the committee would be moving to considering amendments. “You got a conceptual bill, that really doesn’t even have the final language, doesn’t have a score to it.”

Watch a compilation:

“I know what you’re trying to do and I know you have lots of pressure from the administration and elsewhere, but this is the United States Senate. This is the most important committee in the United States Senate. And we ought to look at these things seriously and we ought to ask all the questions that we have,” Hatch insisted, before proceeding to ask staffers with no experience in constitutional law, at least four separate questions about the constitutionality of the individual mandate.

At each turn, the staff replied that they were not qualified to answer Hatch queries, and directed him to the Congressional Research Service, which had concluded that the mandate and the penalty for not acquiring insurance were indeed constitutional. In fact, as Slate’s Timothy Noah explains, the Commerce Clause — which the federal government has used to “expand its power in various ways” since the New Deal — allows the government to regulate and penalize behaviors “by defining various activities as ‘interstate commerce.’” “When a person declines to purchase health insurance, that affects interstate commerce, too, by driving up health insurance premiums for everyone else,” he explains.

“I’ve been on the committee for 15 years, I’ve never seen a circumstance where any member just got unlimited questions,” Sen. Kent Conrad (D-ND) told Hatch during a heated exchange. “Have you ever seen a bill that’s one-sixth of the American economy,” Hatch asked. “Yes, I did,” Conrad replied. “I saw it with the tax cuts in the Bush administration, affected 100 percent of the economy, and we weren’t given unlimited questions. And you know, you talk about a disaster for the country, that turned out to be.”

Baucus reminded Hatch that “the 2001 tax cut bill was a $1.3 trillion bill, we spent, I don’t know how many days on that, not too many days. This is a $900 billion bill…this committee hasn’t spent actually more than two days in mark-up for ten years. But this is a big bill and we’re just trying to find away to find the right balance here, the balance between understanding the bill on one hand, and acting on the other,” Baucus said.

Baucus Accepts Numerous Republican And Democratic Amendments, Brings Cost Of Bill To $900 Billion

I’m live Tweeting the Senate Finance Committee’s mark-up on @wonkroom.

Sen Max Baucus (D-MT) has just released a Chairman’s amendment to his mark. The new amendment enhances the bill’s affordability measures and increases the threshold on so-called Cadillac health care plans for ‘high-risk’ Americans. The modified amendment also preserves a subsidy to certain Medicare Advantage plans.

Baucus accepted 29 Republican amendments, including 10 from Sen. Olympia Snowe (R-ME), who has indicated that she is open to voting for the Senate Finance Committee bill. Baucus did not address any public option amendments and will likely consider Snowe’s trigger proposal during mark-up.

Below are the most significant revisions:

Insurers Write Baucus To Express Gratitude, Lay Out Concerns

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni has penned a letter to Senate Finance Committee Chairman Max Baucus (D-MT), applauding the senator for proposing reforms that combine “insurance market reforms with the responsibility of individuals to obtain coverage and financial assistance for low- and moderate-income families and individuals.”

Ignagni agrees with the overall tenor of of the package, but lays out several top-line concerns. These are summarized below:

- Insurers Oppose 35% Tax On ‘Cadillac Health Plans’: The industry has long argued that it would pass any new taxes to beneficiaries in the form of higher premiums. Ignagni argues that without adequate cost controls, a growing number of policies would be affected by the tax (which is indexed to inflation, and not health care costs) and some Americans could be priced out of the market. After meeting with Democrats who oppose the tax, Baucus has said that he would raise the threshold for expensive insurance plans that would be affected by a new tax. “Given this dynamic, raising the thresholds would only impact how quickly consumers would hit the cap,” Ignagni writes.

- ‘Government Created’ Cooperatives = ‘Slower March Toward A Government-Run Plan’: Ignagni argues that cooperatives will retain certain competitive advantages. The cooperative would receive start-up funds “it would not have to be repaid” and “the government would continue to act as a “player and referee” with the Secretary of HHS serving as Chair of the “advisory board.” However, despite insurers’ concerns of increased competition the bill’s ‘network of cooperatives‘ would be unable to compete in today’s concentrated health insurance markets. As the CBO has concluded, “the proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.”

- Benefit Flexibility To Allow Insurers To Design Policies That Attract Healthier Enrollees: “This means that benefit packages should give consumers flexible options to meet diverse needs and be aligned with the level of premium subsidies provided by Congress, and that the coverage requirement needs to avoid creating incentives for healthy people to forego the purchase of coverage,” Ignagni writes. The letter also expresses concerns about the new national benefit standards.

In other words, insurers want to design packages that attract healthier applicants and deter “enrollment by those in poorer health.” “For example, insurers could offer a benefits design that omits or severely limits services needed by people with serious medical conditions, while offering richer benefits in other areas such as vision care or health-club memberships.” Well-defined standard benefit packages could preclude the industry from slowly moving everyone into high deductible policies.

- Retain Government Subsidy For Plans In Medicare Advantage: The Baucus bill would eliminate the 13% overpayment to private insurance plans that provide Medicare-like benefits at a higher rate, without improving quality. Under the bill, private insurers would have to submit to a competitive bidding process. “We have strong concerns about the proposed funding cuts in Medicare Advantage,” Ignagni wrote.

Ignagni expressed support for establishing a Medicare Commission (which would oversee Medicare spending) and system-wide payment reform.

Republicans Amend Baucus Bill To Lower Affordability Standards, Stop Funding For ACORN »

Members of the Senate Finance committee have submitted 534 amendments to Sen. Max Baucus’ (D-MT) health care mark. Democrats introduced several amendments re-instating the public insurance option, expanding Medicare to Americans 54 to 65, striking the network of consumer driven cooperatives, and improving affordability standards. Multiple amendments lowered the threshold for subsidies, limited out-of-pocket expenses, increased subsidies for individuals making 300-400% of poverty and narrowed the so-called ‘age-band’ (the variation that allows insurers to charge older beneficiaries higher rates).

Democrats exempt workers in high risk professions from the excise tax on insurers, replaced the free rider provision with an employer mandate, and even proposed tax equity for domestic partnerships.

And while Republicans have proposed several compromise amendments — Sen. Olympia Snowe (R-ME) offered an amendment to ‘trigger’ the public option if affordable coverage was not available to at least 95 percent of state residents — most of their provisions seek to delay the mark-up process and undermine the bill.

Republicans offered two separate amendments prohibiting funding for ACORN, reduced affordability credits, and eliminated “all industry fees.” Here are some of the most outrageous:

The Senate Finance Committee begins mark-up this week. Below are some of the most important amendments, categorized into Coverage, Financing, and Delivery reforms. To see the complete list, click here. More »« Less

Grassley Develops New Opposition To Individual Mandate, Proposes Re-Insurance Scheme

Sen. Max Baucus’s health care mark appeases top-line Republican concerns. Under the mark, undocumented immigrants are ineligible for coverage, federal funds cannot be used for abortion and the public option is no more (the list goes on here). But many Republicans are still raising the same stale objections; some are even inventing new reasons to oppose the legislation.

Yesterday, Sen. Chuck Grassley (R-IA) reiterated his concern about undocumented workers being eligible for coverage and public dollars being spent on abortions. Grassley has also developed a new-found opposition to the individual mandate — a policy that even health insurers support:

HEMMER: Now as I understand it, you want stronger language preventing federal funds from going to abortion. You want stronger language to make sure illegal immigrants are not covered. If you got those two big points, would you go for it?

GRASSLEY: No, there are other points as well, but let me mention other points that you didn’t mention. And one would be the individual mandate, which for the first time would have a federal penalty against people who don’t have health insurance. I could do that through re-insurance and risk pools, to make sure we get more people insured in a voluntary way and I’m very reluctant to go along with an individual mandate.

Watch it:

But just last month, when asked “how does this bipartisan group that you`re a member of get to more health insurance coverage if you don`t mandate that employers provide coverage,” Grassley replied “through an individual mandate and that`s individual responsibility and even Republicans believe in individual responsibility.”

During a June appearance on Fox News Sunday, Grassley said, “there isn’t anything wrong with it [an individual mandate], except some people look at it as an infringement upon individual freedom”:

But when it comes to states requiring it for automobile insurance, the principle then ought to lie the same way for health insurance. Because everybody has some health insurance costs, and if you aren’t insured, there’s no free lunch. Somebody else is paying for it….I believe that there is a bipartisan consensus to have individual mandates.

During yesterday’s interview however, Grassley found fault in the “automobile insurance” analogy, explaining to host Bill Hemmer that “owning a car and driving a car are voluntary, you don’t have to do it…in this particular case every American would have to have insurance or you would have a penalty,” he said.

Hypocrisy aside, Grassley’s ‘reinsurance scheme,’ along with his abortion and immigration objections, are simply wrong headed. Grassley would replace the individual mandate with reinsurance. To make-up for the cost of individuals who would only buy coverage once they become sick (and remember, under insurance reform, insurers would have to accept all applicants, regardless of pre-existing conditions), Grassley would allow insurers to pay into a “reinsurance fund” that would finance very high medical expenses. This way, he would protect the entire insurance pool from picking up the costs of individuals who purchase coverage after a crippling diagnosis.

This makes sense in the short term, but on the whole it’s bad policy. We spend about 75% of our health care dollars managing chronic diseases and comparatively little on preventing individuals from developing those diseases in the first place. Grassley’s initiative, in other words, would not do anything to catch folks on the front end of the illness, (like the mandate would) and fail to lower costs over the long term.

The abortion piece is no less peculiar. The Baucus mark preserves current policy by preventing federal money from funding so-called ‘elective abortions’ — abortions in cases of incest, life, or rape would still be covered. The mark forbids women from using subsidy dollars for abortion services and forces them to finance the procedure with private money. But Grassley is suggesting, like Tony Perkins does here, that a woman who wants to buy a benefits package that includes abortion services, should not receive any federal assistance– even if she’s using those dollars for unrelated services. In other words, women who purchase comprehensive packages — that include abortion services — must pay for the entire cost of the package (even if they qualify for subsidies).

Republicans Move Goal Posts On Baucus Health Bill

Yesterday, after nine months of bipartisan negotiations, Sen. Max Baucus (D-MT) released the Senate Finance Committee’s health care bill without attracting any Republican support. According to the Congressional Budget Office, the $774 billion proposal would not add any red ink to the deficit and would actually “result in a net reduction in federal budget deficits of $49 billion over the 2010-2019 period.” Nevertheless, Sen. John Thune (R-SD) falsely stated on Fox News, “This bill continues to spend trillions of dollars.”

For months, Republicans have complained that Democrats were pushing a partisan government-takeover of health care that would only add to the deficit and bankrupt the nation. They insisted that any health care reform bill must exclude a public option, allow Americans to purchase coverage across state lines, exclude funding for abortion and ensure that illegal immigrants are note eligible for coverage.

But once presented with legislation that met many of these demands, the GOP demurred, refusing to meet Baucus half-way:

REPUBLICANS ASKED FOR – NO PUBLIC OPTION: “I urged the President to take the public option off the table because it’s universally opposed by all Republicans in the Senate…it is a roadblock to building the kind of consensus that we need to move forward.” [Sen. Olympia Snowe (R-ME), 9/13/2009]

BAUCUS BILL – NO PUBLIC OPTION: The Baucus bill replaces the public option with a network of consumer driven cooperatives. As the Congressional Budget Office explains, “The specifications include provisions to establish health care cooperatives that would provide insurance coverage and operate as nonprofit organizations.” [pg. 32-38 in Baucus mark]

REPUBLICANS ASKED FOR – POLICIES ACROSS STATE LINES: “Interstate competition allowing people to buy insurance across state lines.” [Sen. John Thune (R-SD), 9/8/2009]

BAUCUS BILL – POLICIES ACROSS STATE LINES: Starting in 2015, states may form ―health care choice compacts to allow for the purchase of individual health insurance across state lines…. Once compacts have been agreed to, insurers would be allowed to sell policies in any state participating in the compact.” [pg. 12]

REPUBLICANS ASKED FOR – HIGH RISK POOLS: “Senator McCain has a proposal sometimes called high-risk pools at the state level…These are efforts I think we can have bipartisan agreement on and deal with the question of pre-existing conditions.” [Rep. Eric Cantor (R-VA), 9/10/2009]

BAUCUS BILL – HIGH RISK POOLS: “Within a year of enactment, any uninsured individual who has been denied health care coverage due to a pre-existing condition can enroll in a high-risk pool….The high-risk pool will exist until 2013,” until the Exchange is established. [pg. 2]

REPUBLICANS ASKED FOR – VERIFICATION OF CITIZENSHIP: “Because what the Republicans want was some verification between illegal and documented.” [Michael Steele, 9/10/2009]

BAUCUS BILL – VERIFICATION OF CITIZENSHIP: “In order to prevent illegal immigrants from accessing the state exchanges obtaining federal health care tax credits, the Chairman‘s Mark requires verification of the following personal data…” [pg. 21]

REPUBLICANS ASKED FOR – NO PUBLIC FUNDS FOR ABORTION: “I’m not going to do anything that allows a health care bill to make more abortions permissible. And if I had my way, I would do something to make them less permissible, because I’m pro-life. And I believe that the — life is pretty important.” [Sen. Chuck Grassely (R-IA), 8/6/2009]

BAUCUS BILL – NO PUBLIC FUNDS FOR ABORTION: “No tax credit or cost-sharing credits may be used to pay for abortions.” [pg. 26]

REPUBLICANS ASKED FOR – HIGH DEDUCTIBLE POLICIES: Ways for “individuals and businesses could purchase high deductible policies, create a fund for their first dollar benefits could be greatly expanded.” [Rep. Mike Pence (R-IN), 6/28/2009]

BAUCUS BILL – HIGH DEDUCTIBLE POLICIES: A separate ―young invincible policy would be available for those 25 years or younger. This plan would be a catastrophic only policy in which the catastrophic coverage level would be set at the HSA current law limit, but prevention benefits would be exempt from the deductible. [pg. 21]

Republicans, in other words, have moved the goal posts on reform. Despite Baucus’ many concessions, the GOP is still arguing that the proposal “simply leads to more government, more spending and more taxes” and “spends too much.”

“The chairman’s health care proposal (known as the “chairman’s mark”) that was released by Sen. Max Baucus (D-Mont.) in advance of next week’s Finance Committee Markup is just more of the same big government policies that have been proposed by this Congress and this administration for months,” Sen. Jim Demint (R-SC) wrote on his website.

Health Insurance Stocks Rally With Release Of Baucus Health Bill

Earlier this morning Senate Finance Committee Chair Max Baucus (D-MT) unveiled his committee’s health care bill, which has no public option and mandates that everyone buy insurance. While Baucus has failed to garner support from any congressional Republicans and has outraged progressives, there has been one very positive response to his proposal.

Following Baucus’ announcement, HealthNet shares increased by 3%, United Health Group Inc shares rose by 2.7%, Humana Inc. grew by 2.6%, Wellpoint stock gained 1.7% and Aetna Inc rose 1.6%:

Earlier this week, ThinkProgress interviewed Wendell Potter — a former health insurance executive — who pointed out that “every time there is an article in a big newspaper questioning the success of progressives in getting a good bill passed, the stock will go up.” “The analysts/investors don’t think any good reform is going to happen, or anything that would happen that would adversely affect the insurance companies,” he said. Watch it:

In fact, since the President signaled that he is backing away from the public option, health insurance stocks have been on the rise. “Health-care investors are starting to breathe a sigh of relief as they feel the worst case could be averted,” John Sullivan, director of research at Leerink Swann, told the Wall Street Journal in August. “Health-care stocks have risen 22% since late February, when President Barack Obama began his push for an overhaul; the overall market is up 38%” between late February and August.

How Does The Baucus Mark Handle The Most Contentions Issues Of Reform?

After months of delay, Sen. Max Baucus (D-MT) has finally released the chairman’s mark to the Senate Finance Committee’s health bill without Republican support. “The $856 billion dollar package will not add to the federal deficit. The Finance Committee will meet to begin voting on the Chairman’s Mark next week,” Baucus wrote in a press release.

Rockefeller has expressed his opposition to the mark and other Democrats have since criticized the bill’s affordability standards and financing mechanisms.

Meanwhile, Sens. Chuck Grassley (R-IA) has issued a statement alleging that the bill “does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began” and expressed disappointment that the White House did not assure him that the bill would not change in conference. Both Grassley and Sen. Mike Enzi (D-WY) — two members of the so-called Gang-of-Six — have indicated that they favored smaller bill that does not impose fees on health insurance companies, establishes a five-year waiting period for legal immigrants to obtain coverage, and strictly prohibits “the use of federal money to pay for abortion.” Meanwhile, Sen. Olympia Snowe (R-ME) signaled Tuesday “she is unlikely to immediately support” Baucus’ bill, “but emphasized strongly that she is prepared to jump on board in the coming days.” “I’ll issue my statement tomorrow. But that’s not the end of the process, tomorrow. It’s just the beginning. So, I wouldn’t read too much into it,” Snowe told reporters.

So did Baucus’ mark meet Republican demands? Below is a summary of some of the most contentious issues in the Baucus bill:

Would federal dollars be used to fund abortion? No. Federal subsidies cannot be used to cover abortions that do not involve rape or incest. All abortion procedures would have to be financed through private premiums.

Are illegal immigrants eligible for coverage and government subsidies? Illegal immigrants are exempt from the mandate and would not be eligible to purchase coverage within the Exchange; they’re relegated to the individual market (which would shrink but would presumably have the same protections as the Exchange.) Legal permanent residents with incomes below 100% of the federal poverty are ineligible for Exchange subsidies and (presumably, following existing law) have to wait five years before qualifying for Medicaid. Thus, for the first five years of their residency, most legal immigrants may remain uninsured.

What are the verification requirements? To obtain coverage within the Exchange, an applicant’s “name, social security number, and date of birth will be verified with Social Security Administration (SSA) data.” “For individuals who do not claim to be U.S. citizens but claim to be lawfully present in the United States, if the claim of lawful presence is consistent with Department of Homeland Security (DHS) data then the claim will be considered substantiated”

Is tort reform part of the bill? Yes, states are encouraged “to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual‘s right to seek redress in court.”

Who will finance Medicaid expansion? Beginning in 2014, “additional Federal financial assistance would be provided to all states to defray the costs of covering newly-eligible beneficiaries.” The Federal government would pay states on a sliding scale. “States that offer minimal or no coverage of the newly-eligible population currently would receive more assistance initially than those states that currently cover at least some non-elderly, non-pregnant individuals.” The states that already cover more than 133% FPL (like Maine, for instance) would still receive extra federal assistance, but they would see less money than states that just offer the bare minimum Medicaid coverage.