BaucusCare Still ‘Government Knows Best’
By Scott Harrington
September 10, 2009, 6:37 am
The long-awaited “Framework for Comprehensive Health Reform” released by Senator Baucus and the “Bipartisan Six” is marginally less prescriptive than H.R. 3200 (and the proposal of the Senate Committee on Health, Education, Labor, and Pensions). The proposal also is alleged to be moderately less expensive than H.R. 3200.
Examples of increased flexibility include: (1) its proposed individual coverage mandate would be less comprehensive given an “affordability” exception, (2) it proposes creation of state-level co-ops instead of a government health insurance plan, (3) health insurance exchanges would be organized at the state rather than national level, and (4) it would permit greater variation in health insurance premiums in relation to a person’s age (reducing premium subsidies from young to old).
Overall, however, the Wall Street Journal’s recent lead editorial, “The Peril’s of BaucusCare,” hits the nail on the head. The proposed Baucus compromise reflects the same basic “government knows best” philosophy and therefore has substantially the same drawbacks as H.R. 3200.
Regarding financing, the Baucus outline proposes lower limits on tax-exempt flexible savings account contributions, and excise taxes on high cost insured and self-insured plans, which in effect would scale back the tax advantage of rich employer-sponsored plans. But, while the proposal eschews income tax surcharges on the affluent, it instead proposes annual fees beginning in 2010 of $6 billion on the “health insurance sector,” $4 billion on the “medical device manufacturing sector,” $2.3 billion on the “pharmaceutical manufacturing sector,” and $750 million on “clinical laboratories.” Moreover, it apparently threatens nonprofit hospitals with a loss of tax-exempt status unless they satisfy new requirements for meeting community needs. Taxing healthcare services and insurers would obviously make healthcare and insurance less rather than more affordable. This bright idea represents pure political expediency.
It’s time to go back to the drawing board.
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