Examination of Sen. Max Baucus’ plan for government-run health care in the Senate Finance Committee has run into its second day today. And given the breaking news earlier that Democrats rejected an amendment proposed by the GOP which would have provided Americans with the chance to view, online, any bill for 72 hours before being voted on by committee, I thought I’d share a little of what Baucus’ plan for health care reform would mean for ordinary folks from coast to coast.
Extremely vocal on this issue has been House Minority Leader John Boehner, who said today that Baucus’ proposal is “the wrong prescription during these tough economic times,” that it would increase health care costs, cut Medicare for seniors, saddle already-struggling middle-class families and small businesses with a heavier tax burden, and that its trillion-dollar price tag is simply too much.
“This issue is too important to get wrong,” he said. “That’s why Democrats should scrap their expensive plans and work with Republicans on a fiscally-responsible proposal that lowers health care costs and expands access for the American people.”
From Boehner’s Web site, here are ten facts about the bill currently being weighed by the Senate Finance Committee, the bill that Democrats are actively keeping from the American people:
- Medicare Cuts Mean Reduced Benefits, Fewer Choices for Seniors. The Baucus plan cuts Medicare by nearly $500 billion, slashing coverage millions of seniors depend on. These benefit cuts will ultimately eliminate choices currently enjoyed by seniors today. Doug Elmendorf, the head of the nonpartisan Congressional Budget Office, told the Senate Finance Committee yesterday he “expected the Medicare Advantage plans to lose 2.7 million enrollees over the next decade” as a result of the Baucus plan.
- Individual Mandate Results in Hefty Tax Increase for Millions of Americans. The Baucus plan mandates that every American buy health insurance or pay a hefty new tax to Washington of up to $1,900 per year. This new tax will take another $20 billion hard earned dollars from working families. Especially during a recession, this new tax will place another large burden on the family budget.
- No Junk Lawsuit Reform to Reduce Health Care Costs. The Baucus plan includes only a “Sense of the Senate” with respect to the very pressing issue of junk lawsuit reform. Serious changes are needed to reduce costly,unnecessary defensive medicine practiced by doctors trying to protect themselves from a feeding frenzy of trial lawyers. The Baucus plan misses an opportunity for real reform.
- New Taxes Harm Small Businesses, Costs Jobs. The Baucus plan saddles small businesses that have more than 50 employees with a new tax of up to $199,600 per year if they do not provide health coverage to their employees. Census data compiled by the Small Business Administration, however, reveals that the Baucus “small business exemption” – for businesses with fewer than 50 employees – will still subject many small employers to new taxes and mandates. In fact, this so-called “exemption” could still subject 220,000 small businesses that employ 44% of all small business employees and 22% of the entire private sector workforce to the new taxes and mandates. The 220,000 small businesses targeted by the Baucus plan employ 26.4 million employees and provide those employees $982 billion in wages annually.
- Higher Health Care Costs for Working Families. The Baucus plan would actually raise insurance premiums for working families, not lower them. In a letter to Chairman Baucus, the nonpartisan Congressional Budget Office stated, “premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market…” Meanwhile, a recent study published in Health Affairs found that a government-run plan similar to the one being proposed in House Democrats’ bill could cause annual insurance premiums for a family of four to increase by more than $4,500.
- $420 Billion in New Tax Increases on Families & Small Businesses. The Baucus plan includes a host of new taxes on American families and job creators. Taxes on individuals who are uninsured, taxes on employers that do not offer health insurance coverage, and taxes on health care products like wheelchairs and other medical devices and insurance are just some of the more than $420 billion in new tax increases included in the bill. At a time when families and small businesses are already struggling to make ends meet, new taxes of this magnitude would only further slow the economy and raise the cost of care for those patients who need it most.
- Lower Wages and More Unemployment. The Baucus plan would impose a new $27 billion tax on employers, including small businesses, that cannot afford to provide health coverage or that don’t offer coverage. The effect of this type of tax, similar to a payroll tax increase, would ultimately fall squarely on workers in the form of lower wages or reduced employment. In fact, the Tax Policy Center concluded that “economists generally believe that the burden of payroll taxes is borne by workers in the form of lower wages, regardless of whether the tax is levied on the employer or the employee.” The tax proposed in the Baucus plan will likely have the same effect.
- Higher Taxes on American Manufacturers. In order to find revenue to “pay for” his plan, Senator Baucus included massive new taxes on various industry segments in the health care sector. These new taxes include $17.2 billion tax on pharmaceutical manufacturers, a $30 billion tax on medical device manufacturers, and a $45 billion tax on health insurers. These massive tax increases on American manufacturers will be passed on to American families, and they will make the cost of health care more expensive. These tax increases will also serve as a major disincentive for innovation, capital investment and job creation. With some Senate Democrats clamoring for additional – and costly – subsidies, how many more tax increases will be added before it goes for a vote in the Senate? When will Democrats reveal what other tax increases they have in store for American working families and employers?
- A Lack of Support From Senate Democrats. Key Senate Democrats have voiced concern about the Baucus plan, including Senator Jay Rockefeller (D-WV,) who said “there is no way” he would support it “unless it changes in the amendment process by vast amounts.” What’s more, Senator Bill Nelson (D-FL) described the Medicare cuts in the Baucus plan as “intolerable” in remarks on the Senate floor last week, while Senator Ron Wyden (D-OR) “complained the legislation would ask working Americans to commit as much as 13% of their income to buy basic insurance,” calling it a “real hit on middle-class families.”
- Is the Baucus Plan Written in Invisible Ink? While House Democrats have marked up legislation in three different committees, the Senate Finance Committee is taking a different approach. The Committee is working off of a framework document that summarizes what they would like to do, but doesn’t offer specifics on how it would be done. That leaves big questions about just how this plan will work and doesn’t allow for a full and transparent debate on the plan. At a time when the American people are asking their legislators, “Have you read the bill?” the clear answer among Senate Finance Committee members will be “no.”