Baucus: Health bill covers 95%, reduces deficit

A draft bipartisan healthcare reform bill being negotiated in the Senate would extend insurance coverage to 95 percent of legal U.S. residents, cost less than $900 billion and actually reduce the federal budget deficit over 10 years, Senate Finance Committee Max Baucus (D-Mont.) said Wednesday.

Though Baucus insisted that he and the five senators working on the bill — two other Democrats and three Republicans — were not set to announce a deal, the preliminary Congressional Budget Office (CBO) analysis he described could reframe the debate over healthcare reform on Capitol HIll.

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“The current draft of the bill scores below $900 billion over 10 years, covers 95 percent of all Americans by 2015 and is fully offset,” Baucus said. “In fact, according to the preliminary CBO report, the bill would actually reduce the federal deficit in the 10th year by several billion dollars.”

If Baucus and his cohorts can produce a bipartisan bill with a lower price tag than other Democratic measures that still covers nearly all Americans and brings down long-term healthcare spending, while having a positive effect on the budget deficit, their bill would stand to attract significant support from centrist Democrats and even Republicans.

With centrist Democrats pushing hard for the cost of the legislation to come down and against a House plan to institute a surtax on high-income earners, Baucus's pending proposal could end up being the most viable vehicle for healthcare reform that can attract the 60 votes needed to move most bills through the Senate — much to the chagrin of liberals.

Unlike the healthcare reform bills coming out of the House and already approved by the Senate Health, Education, Labor and Pensions Committee, the legislation being assembled by the Finance Committee eschews two central Democratic priorities: the creation of a government-run public option insurance plan and a requirement that most employers provide health benefits.

Instead of a government-run plan, the Finance Committee group is weighing the establishment of member-owned healthcare cooperatives that would receive $6 billion in federal seed money. The chief proponent of the co-ops, Sen. Kent Conrad (D-N.D.), said that 12 million people would sign up, according to preliminary estimates.

In place of a strict employer mandate on health benefits, the senators are considering a proposal to discourage “free rider” companies by requiring employers to reimbursement the government for the cost on enrolling their workers in Medicaid or providing subsidies for private insurance.

Supporters of the employer mandate, which is part of the House and Senate health committee measures, believe it is needed to prevent employers from dumping health benefits. Despite this, Baucus said, the CBO told the Finance Committee senators that their bill would not trigger companies to drop coverage.

“Employer-sponsored coverage increases throughout the life of the program,” Baucus said.

Baucus and his group have emphasized cost-containment in recent weeks and have identified new ways to reduce federal healthcare spending.

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Baucus highlighted a proposal espoused by President Barack Obama and Sen. Jay Rockefeller (D-W.Va.) to create an independent commission to set Medicare pay rates and policy. That panel would be given a 10-year savings target to meet in addition to the hundreds of billions of dollars in Medicare cuts expected to be spelled out in the bill.

A proposal to levy a tax on insurance companies that offer health insurance plans that cost more than $25,000 a year would raise around $90 billion and has been gaining support in the Senate and the House.

But the Finance Committee group, which consists of ranking member Chuck Grassley (R-Iowa), Democratic Sens. Conrad and Jeff Bingaman (N.M.) and Republican Sens. Mike Enzi (Wyo.) and Olympia Snowe (Maine) has much work left to do.

“Keep in the mind the current draft does not include resolution of several key issues. Nevertheless, the report is encouraging,” Baucus said.

The group has not settled on important questions regarding how to ensure that everyone can afford the insurance coverage they would be mandated to purchase, for example.

The bill is likely to include an expansion of Medicare for the poor and subsidies for health insurance ranging from 300 percent to 400 percent of the federal poverty level, but senators remain concerned that middle-class workers could fall between the cracks.

This story was updated at 12:35 p.m.