America’s Healthy Future Act
Encyclopedia
The America’s Healthy Future Act is a proposed law
by Democratic Senator
Max Baucus
of Montana
, who chairs the Senate Finance Committee, on September 16, 2009. It is also colloquially known as the Baucus Health Bill, the Baucus Health Plan, or BaucusCare. Baucus initially publicly released a 223-page summary of the proposal. It started going through the Senate
mark-up process on September 22. That amendment process finished Oct. 2, and was passed by the Finance Committee on October 13 by a 14 to 9 vote,. An October CBO
report stated that enacting the proposal would, on net, end up reducing the federal deficit
by $81 billion over the 2010-2019 period.
was known as the head of a bipartisan group called the 'Gang of Six' in the Senate Finance Committee. Senators
Jeff Bingaman
of New Mexico
and Kent Conrad
of North Dakota
made up the other Democratic members of the 'gang', while Olympia Snowe
of Maine
, Chuck Grassley
of Iowa
, and Mike Enzi
of Wyoming
made up the Republican side. They underwent months of negotiations and compromises over the summer of 2009 to achieve a healthcare plan. In the first week of September, Baucus began saying that he would push through a plan even if he could not obtain bipartisan backing. He remarked that "time has come for action, and we will act" on September 9.
Before the proposal was made, President Barack Obama
publicly promised that he would not support a plan that would cost more than $900 billion over the next ten years. He also said that a plan could not add to the federal deficit
, with every bit of new spending completely offset. The Baucus proposal stalled in the committee in August 2009 due to the town hall meetings faced by members of Congress, in which many opponents attended.
on the Committee, Sen. Chuck Grassley
, received more than $2 million since 2003. Commentator Jack Cafferty
and representatives from the Physicians for a National Health Program
and Campaign Money Watch
have argued that this lobbying creates a conflict of interest for the Senators. Baucus disputes the allegations, referring to a 2007 meeting reported on by The Wall Street Journal
in which he told medical lobbyists "[y]ou should worry about me coming after you."
, the cost of the average employer-provided insurance plan will rise to nearly $31,000 in several years if no health care reform measures
are done.
s, which would be member-controlled, non-profit forms of health insurance that would compete with private insurers. It does not include a public insurance plan. The co-operatives would receive $6 billion in federal funding in 2012 to start off, but they would operate independently after that point. The introduction of the co-ops is intended to drive health care costs downward.
The proposal also creates an individual mandate
that requires people to either buy insurance or pay a penalty. Those with incomes below three times the federal poverty level would receive subsidies to purchase their plans. For a family of four, $66,150 would be the dividing line. The penalty would be up to $950 per person or $3,800 per family each year. These measures would come into effect for all American residents in 2013. According to The Politico
:
Individuals would be able to buy their insurance from an exchange created in their state, which would be created in 2010. Premiums would be capped at 13% of the buyer's income, with the rest of the costs paid by subsidies. Insurance companies would be required to cover certain services such as hospitalization, maternity care, newborn care
, chemotherapy
, and pediatric care
. Their plans would be presented as either bronze, silver, gold, and platinum options, sorted by the least to the most expensive. Only individuals and firms with fifty or fewer employees would be eligible to use the exchanges until 2017, when states would bring in larger employers. In 2022, they would become open to all. Persons who are not lawfully in the United States would not be permitted to participate in the exchange, either with or without subsidies. According to Baucus:
Although the proposal does not establish an employer mandate, which would have required firms to provide insurance for their workers or pay a penalty, the proposal requires businesses with more than fifty employees to pay fees going towards the aforementioned subsidies. The maximum possible fee would either be $400 per full-time employee or the average cost of the subsidies a firm's employee's take in multiplied by the number of those receiving them. The proposal forbids insurance companies from restricting coverage based on 'pre-existing conditions'. The insurance premiums can take into account tobacco use, age, family size, and geographic location. Insurance companies would also be forbidden from setting up lifetime or annual caps that specify a maximum amount of care that customers can receive.
The proposal also includes a new excise tax on so-called 'Cadillac
' health care plans that are more expensive and comprehensive than the majority of plans. Any plan costing over $8,000 for an individual and $21,000 for a family would be subject to a 35% tax on the amount past those levels. The Center on Budget and Policy Priorities
, a liberal-leaning think tank
, estimated that about 10% of families have plans that would be subject to the tax. The Committee for a Responsible Federal Budget
has argued that this tax is beneficial both because it grows fast enough to keep up with new costs and because it can helps to slow health care cost growth. The group has also stated that the tax will cause employers to offer workers higher (taxable) cash wages instead of health benefits, thus generating more government revenue. According to Congress' joint committee on taxation, the proposal would create $215 billion in the next ten years from the tax. Another $93 billion in funds will come from new annual fees imposed on groups such as pharmaceutical companies and medical device manufacturers. Additionally, the Senate Finance Committee approved provisions that would lump Flexible Spending Accounts (FSAs) together with high-cost insurance plans and subject them to the excise tax, which would likely cause many employers to reconsider offering FSAs altogether.
Other funds come a reduction in future Medicare
spending, which would be over $400 billion in the next decade. Specifically, payments under the Medicare Advantage system would be decreased by $113 billion in the next decade. The so-called 'doughnut hole' in prescription drug coverage would be closed. In the long term, the proposal would set up an independent commission that could alter payments further.
Additionally, a small portion of funds would come from a new cap imposed on Flexible Spending Accounts (FSAs), pre-tax health benefits that enable millions of Americans to manage their out-of-pocket health care costs. Americans Healthy Future Act would impose a $2,500 limit on contributions to FSAs. Unfortunately, 7 million Americans have FSAs above $2,500, and those with the highest out-of-pocket health care costs- the sickest – would be hit the hardest by the restrictions.
The proposal was initially designed to cost $856 billion over the next ten years. However, the Congressional Budget Office
(CBO) stated on September 16 that it would only cost about $774 billion over that period. The CBO
report stated that enacting the proposal would, on net, end up reducing the federal deficit
by $16 billion in 2019. It also estimated that, by 2019, the number of non-elderly uninsured people would fall about 29 million, which would leave about 25 million of the non-elderly (about one-third illegal immigrants
) still uninsured. Thus, the number of non-elderly legal residents with insurance would rise from about 83% being covered to about 94% being covered. A Forbes.com report has stated that "it's not entirely clear what will happen to health care costs in 2020 and beyond."
On September 24, the CBO re-evaluated the proposal, taking into account the changes created by the Senate Committee. The CBO stated that the proposal would bring in $23 billion in the first ten years. Specifically, the Committee decreased the penalties for avoiding buying insurance, expanded the subsidies, and lowered the excise tax on high end insurance plans. A CBO report issued on October 7 stated that enacting the proposal would, on net, end up reducing the federal deficit
by $81 billion over the 2010-2019 period. That report prompted praise from White House Press Secretary
Robert Gibbs
and from Senate Majority Leader Harry Reid
, Dem. from Nevada
, who called the scoring a "landmark occasion". Senate Minority Leader Mitch McConnell
, Rep. from Kentucky
, criticized the numbers as misleading given that the Baucus proposal would not come into effect for about another five years.
that cost below $100. Only the other classes would be taxed. On October 14, journalists from the Financial Times
stated that the 'Cadillac plans' tax would now impose a 40% fee on any plans exceeding $8,000 a year for individuals and $21,000 a year for families. They also described the individual mandate
requirement as "much watered-down", with those earning less than 300% of the federal poverty now subject to a penalty of between $750 and $1,500 a year.
The premium subsidies for low-income individuals included in the final bill were structured to initially limit the premium middle-income people would have to pay for coverage to 12% of income. After the first year, however, the subsidy would be based on a percentage of premium rather than a percentage of income. Because costs are expected to rise more quickly than income, over time cost of coverage after subsidies will rise above the initial 12% of income limit.
bill (S 1679) have a public plan. Baucus' proposal does not. The Health, Education, Labor and Pensions Committee
is considered to be more liberal than the Finance Committee. According to Norman Ornstein of the American Enterprise Institute
, a conservative think tank, the Health Committee's proposal and the House bill will both lead to budget deficits in contrast to the Baucus' plan, which would reduce the debt. Ornstein has argued that this is an important advantage for the Baucus plan. Howard Dean
has stated that the majority of Senate Democrats support a more liberal plan. If it reaches the Senate floor, Baucus' proposal will have to be amalgamated with the Health Committee's proposal.
On September 29, the Finance Committee rejected two amendments to add a public plan to Baucus' proposal. Senator Jay Rockefeller
's amendment was rejected 15 to 8, with five Democrats (Baucus, Kent Conrad
, Blanche Lincoln
, Tom Carper, Bill Nelson
) and all Republicans voting no. Senator Chuck Schumer's amendment was defeated 13 to 10, with three Democrats (Baucus, Conrad, Lincoln) and all Republicans voting no.
All of the Republicans on the Senate Finance Committee initially announced opposition to the proposal. Sen. Mike Enzi
of Wyoming
remarked, "[t]his bill does not do enough to lower costs, and in many cases, it will actually increase health-care costs through the new taxes mandated". Sen. Olympia Snowe
of Maine
released a statement on Sept. 22 reading that "the mark before us is a solid starting point -- but we are far from the finish line." She said in the first week of October that she had not yet decided whether or not to vote for the plan. Norman Ornstein of the AEI
has stated that the high cost "Cadillac" insurance plans
, which would face a new tax under the Baucus plan, are more common in Maine
compared to other states.
The amending process, known officially as the 'mark-up', began on September 22. The committee members offered 564 possible amendments, which involved a wide variety of issues. Baucus said in his opening statement that "[t]his is our opportunity to make history". The members, collectively, spent over three hours in their opening comments.
Baucus played a key role in facilitating the recent agreement between the Obama administration and the Pharmaceutical Research and Manufacturers of America
in which the group promised a $80 billion reduction in Medicare
drug prices over ten years. The administration then promised in return not to make any more financial demands on the group in the future. On Sept. 25, Democratic Sen. Bill Nelson
of Florida
created an amendment to reverse the deal. The Committee voted 13-10 to reject the amendment.
The Finance Committee also rejected, by 14-9, an amendment removing the individual mandate
from the proposal. Republican Sen. Jim Bunning
of Kentucky
proposed the change, which he said would remove an 'un-American
' requirement. Baucus labeled the amendment "mortally wounding" to the health care system set forth in the proposal.
Democratic Sen. Charles Schumer
of New York, who is Vice-Chairman of the Senate Democratic Conference, introduced an amendment to include a public plan in the proposal. The committee rejected his amendment on on Sept 29, in a 13 to 10 vote. Three Democrats (Baucus, Conrad, Lincoln) and all the Republicans voted no. Schumer had said on Sept. 24, that "I think we have a strong chance on the Senate floor to get it".
. She later commented, "When history calls, history calls." The San Francisco Chronicle referred to her vote as "a coup" for Baucus, coming after criticism from his fellow Democrats for making too many compromises. Snowe, as well as some moderate Democratic members of the committee, have vowed that they will drop their support for the Baucus plan if a 'public option' is added at any point.
of Iowa
, who became Chairman of the Senate Committee on Health, Education, Labor, and Pensions
following the death of Sen. Ted Kennedy
, generally praised the proposal and was reported as then becoming more "optimistic" that health care reform would pass the Congress in 2009. He also commented, however, that the co-operatives system leaves "a lot to be desired." Democratic Sen. Ron Wyden
of Oregon
, a key figure behind the rival Healthy Americans Act
, expressed concern that Baucus' plan would not do enough to promote competition in the private insurance marketplace.
In an official GOP weekly message in mid-October, Rep. Kevin Brady of Texas
argued that "Americans inherently know government interference drives costs up, not down... The massive health care plans being crafted behind closed doors in Washington will ultimately allow the government to decide what doctors we can see, what treatments the government thinks you deserve and what medicines you can receive."
referred to the plan during a speech at the University of Maryland
. He declined to endorse Baucus's plan directly, but he criticized the opponents of his broader goals in health care reform. The crowd of left-leaning
college students booed at the mention of Baucus' proposal and cheered at Obama's other comments.
Obama praised the Senate Finance Committee's vote in support of the Baucus plan on a September 13 address. He described the vote as a "critical milestone" and stated that it "has brought us significantly closer to achieving the core objectives I laid out". The President also said, "We are now closer than ever before to passing health care reform, but we're not there yet... Now's the time to dig in and work even harder to get things done."
Chuck Grassley
that labeled the proposal "unacceptable in many areas" while still "the most balanced health reform proposal to be marked up by Congress to date." The group highlighted the proposed tax on high-value insurance plans as unacceptable. Michael D. Tanner, a CATO Institute
senior fellow, criticized several aspects of the proposal such as the health care materials tax, which he said "will result in higher health care costs that will be passed on to consumers", and the individual mandate
, which he labeled "heavily punitive".
Harold A. Schaitberger, general president of the International Association of Fire Fighters
, stated that the proposal "puts a bigger tax on middle-income Americans who are already paying enough". Jim Hoffa
, president of the Teamsters
union, and Sen. John D. Rockefeller IV also expressed opposition to the health plan tax. President Barack Obama
expressed support for the proposed tax, saying that "I do think that giving a disincentive to insurance companies to offer Cadillac plans
that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term." Republicans in the Finance Committee have called the tax a violation of Obama's campaign promise
to not raise taxes
on anyone earning less than $250,000 a year.
The AARP
has not objected to the cuts to future Medicare
spending in the proposal. Charles Kahn
, president of the Federation of American Hospitals
, has called the proposal "the right thing to do." The Washington Post
has labeled the possible changes as "designed to be relatively painless". The National Council of La Raza
opposes the measures in the proposal that require individuals to prove their citizenship status before receiving coverage. The group has created a campaign to leave Senators voice mail messages about the issue.
Former CIGNA
VP-turned health care activist Wendell Potter
has criticized the Senate Committee for rejecting a public option. He charged that Senators are only taking their positions due to pressure from insurance industries in an interview with Amy Goodman
. Howard Dean
, former Democratic National Committee
chairman, has remarked that "The Baucus bill is the worst piece of healthcare legislation I've seen in 30 years". He has also said, "it's a $60 billion giveaway to the health insurance industry every year... It was written by healthcare lobbyists, so that's not a surprise. It's an outrage."
Americans United for Life
(AUL), the first national pro-life organization in the United States, has stated that federal taxpayer funding of abortion
could still be mandated by the Baucus bill, despite claims to the contrary. AUL's CEO Dr. Charmaine Yoest stated that the bill "provides $6 billion for the establishment of health insurance cooperatives which would be permitted to cover abortion". He also said that if the Hyde Amendment
is not renewed, coverage for all abortions would be mandated, under this legislation.
The editors of National Review
criticized the plan, arguing that "his proposal resorts to the same kinds of arbitrary fee cuts, taxes, and regulatory payment-control schemes that have been tried many times before and have never worked." The Weekly Standard
also ran an article blasting the proposal and stating that it would increase the cost of health insurance premiums through controls such as making individuals buy more comprehensive insurance than they would otherwise want. The Wall Street Journal editorial
ized that Baucus' plan, a "Rube Goldberg proposal
", would eventually lead to a total government takeover of the health care industry.
B'nai B'rith International and the Religious Action Center of Reform Judaism both released statements praising the Senate Finance Committee after its vote in favor of the Baucus plan on October 13. The latter group stated that "Jewish tradition teaches that human life is of infinite value and that the preservation of life supersedes all other consideration. Providing health care is not just an obligation for the patient and the doctor, but for society as well." It also referred to Maimonides
' placing of health care first on his list of the ten most important communal services in Maimonides
' work Mishneh Torah (Hilchot De’ot IV: 23)
.
On October 14, journalists from Financial Times
stated that "[t]he bill claims that it will bend the fiscal curve by reducing the rate of healthcare inflation... Economists are sceptical on whether it will achieve this aim." Shawn Tully, editor at large for Fortune, stated on Oct. 9 that the Baucus bill would provide incentives for employers not to provide insurance to its employees. She further argued that at worst the plan would add $90 billion to the CBO's original projection annually.
Bill (proposed law)
A bill is a proposed law under consideration by a legislature. A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act or a statute....
by Democratic Senator
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Max Baucus
Max Baucus
Max Sieben Baucus is the senior United States Senator from Montana and a member of the Democratic Party. First elected to the Senate in 1978, as of 2010 he is the longest-serving Senator from Montana, and the fifth longest-serving U.S...
of Montana
Montana
Montana is a state in the Western United States. The western third of Montana contains numerous mountain ranges. Smaller, "island ranges" are found in the central third of the state, for a total of 77 named ranges of the Rocky Mountains. This geographical fact is reflected in the state's name,...
, who chairs the Senate Finance Committee, on September 16, 2009. It is also colloquially known as the Baucus Health Bill, the Baucus Health Plan, or BaucusCare. Baucus initially publicly released a 223-page summary of the proposal. It started going through the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
mark-up process on September 22. That amendment process finished Oct. 2, and was passed by the Finance Committee on October 13 by a 14 to 9 vote,. An October CBO
CBO
CBO is a three letter abbreviation which may mean:* CBO-FM, a CBC Radio One station in Ottawa, Ontario, Canada* Central Bank of Oman* Central Boycott Office, a specialized agency of the Arab League based in Damascus...
report stated that enacting the proposal would, on net, end up reducing the federal deficit
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...
by $81 billion over the 2010-2019 period.
History behind the proposal
Chairman BaucusMax Baucus
Max Sieben Baucus is the senior United States Senator from Montana and a member of the Democratic Party. First elected to the Senate in 1978, as of 2010 he is the longest-serving Senator from Montana, and the fifth longest-serving U.S...
was known as the head of a bipartisan group called the 'Gang of Six' in the Senate Finance Committee. Senators
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Jeff Bingaman
Jeff Bingaman
Jesse Francis "Jeff" Bingaman, Jr. , is the senior U.S. Senator from New Mexico and a member of the Democratic Party...
of New Mexico
New Mexico
New Mexico is a state located in the southwest and western regions of the United States. New Mexico is also usually considered one of the Mountain States. With a population density of 16 per square mile, New Mexico is the sixth-most sparsely inhabited U.S...
and Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...
of North Dakota
North Dakota
North Dakota is a state located in the Midwestern region of the United States of America, along the Canadian border. The state is bordered by Canada to the north, Minnesota to the east, South Dakota to the south and Montana to the west. North Dakota is the 19th-largest state by area in the U.S....
made up the other Democratic members of the 'gang', while Olympia Snowe
Olympia Snowe
Olympia Jean Snowe , née Bouchles, is the senior United States Senator from Maine and a member of the Republican Party. Snowe has become widely known for her ability to influence the outcome of close votes, including whether to end filibusters. She and her fellow Senator from Maine, Susan Collins,...
of Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
, Chuck Grassley
Chuck Grassley
Charles Ernest "Chuck" Grassley is the senior United States Senator from Iowa . A member of Republican Party, he previously served in the served in the United States House of Representatives and the Iowa state legislature...
of Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
, and Mike Enzi
Mike Enzi
Michael Bradley "Mike" Enzi is the senior U.S. Senator from Wyoming and a member of the Republican Party.Raised in Thermopolis, Wyoming, Enzi attended George Washington University and the University of Denver. He expanded his father's shoe store business in Gillette before being elected mayor of...
of Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
made up the Republican side. They underwent months of negotiations and compromises over the summer of 2009 to achieve a healthcare plan. In the first week of September, Baucus began saying that he would push through a plan even if he could not obtain bipartisan backing. He remarked that "time has come for action, and we will act" on September 9.
Before the proposal was made, President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
publicly promised that he would not support a plan that would cost more than $900 billion over the next ten years. He also said that a plan could not add to the federal deficit
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...
, with every bit of new spending completely offset. The Baucus proposal stalled in the committee in August 2009 due to the town hall meetings faced by members of Congress, in which many opponents attended.
Alleged conflicts of interests in its creation
Senator Baucus, chairman of the Senate Finance Committee, received over $3 million from the health and insurance industries from 2003 to 2008, more than any other member of Congress. The Republican Ranking MemberRanking member
In United States politics, a ranking member is the second-most senior member of a congressional or state legislative committee from the majority party. Another usage refers to the most senior member of a congressional or state legislative committee from the minority party. This second usage, often...
on the Committee, Sen. Chuck Grassley
Chuck Grassley
Charles Ernest "Chuck" Grassley is the senior United States Senator from Iowa . A member of Republican Party, he previously served in the served in the United States House of Representatives and the Iowa state legislature...
, received more than $2 million since 2003. Commentator Jack Cafferty
Jack Cafferty
Jack Cafferty is a CNN commentator and occasional host of specials. In the summer of 2005, Cafferty joined The Situation Room.-Career:...
and representatives from the Physicians for a National Health Program
Physicians for a National Health Program
Physicians for a National Health Program , is an advocacy organization of some 17,000 American physicians, medical students, and health professionals founded by Quentin Young who support a single-payer system of national health insurance....
and Campaign Money Watch
Campaign Money Watch
Campaign Money Watch is an independent, non-profit, and non-partisan political activist organization, organized as a 527 group. It is primarily known for ads it ran against Republican candidate John McCain in the run up to the United States presidential election, 2008. The group takes in funding...
have argued that this lobbying creates a conflict of interest for the Senators. Baucus disputes the allegations, referring to a 2007 meeting reported on by The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
in which he told medical lobbyists "[y]ou should worry about me coming after you."
Economic background
According to Sen. Olympia SnoweOlympia Snowe
Olympia Jean Snowe , née Bouchles, is the senior United States Senator from Maine and a member of the Republican Party. Snowe has become widely known for her ability to influence the outcome of close votes, including whether to end filibusters. She and her fellow Senator from Maine, Susan Collins,...
, the cost of the average employer-provided insurance plan will rise to nearly $31,000 in several years if no health care reform measures
Health care reform in the United States
Health care reform in the United States has a long history, of which the most recent results were two federal statutes enacted in 2010: the Patient Protection and Affordable Care Act , signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 , which amended the PPACA and...
are done.
Components of the proposal
The proposal specifies the creation of health insurance cooperativeHealth insurance cooperative
A health insurance cooperative is a cooperative entity that has the goal of providing health insurance and is also owned by the people that the organization insures...
s, which would be member-controlled, non-profit forms of health insurance that would compete with private insurers. It does not include a public insurance plan. The co-operatives would receive $6 billion in federal funding in 2012 to start off, but they would operate independently after that point. The introduction of the co-ops is intended to drive health care costs downward.
The proposal also creates an individual mandate
Individual mandate
An individual mandate is a requirement by a government that certain individual citizens purchase or otherwise obtain a good or service.In the United States, the United States Congress has enacted two individual mandates, the first was never federally enforced, while the second is not scheduled to...
that requires people to either buy insurance or pay a penalty. Those with incomes below three times the federal poverty level would receive subsidies to purchase their plans. For a family of four, $66,150 would be the dividing line. The penalty would be up to $950 per person or $3,800 per family each year. These measures would come into effect for all American residents in 2013. According to The Politico
The Politico
The Politico is an American political journalism organization based in Arlington, Virginia, that distributes its content via television, the Internet, newspaper, and radio. Its coverage of Washington, D.C., includes the U.S. Congress, lobbying, media and the Presidency...
:
"Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance. Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty, Barthold wrote on JCT letterhead. He signed it 'Sincerely, Thomas A. Barthold'."
Individuals would be able to buy their insurance from an exchange created in their state, which would be created in 2010. Premiums would be capped at 13% of the buyer's income, with the rest of the costs paid by subsidies. Insurance companies would be required to cover certain services such as hospitalization, maternity care, newborn care
Neonatology
Neonatology is a subspecialty of pediatrics that consists of the medical care of newborn infants, especially the ill or premature newborn infant. It is a hospital-based specialty, and is usually practiced in neonatal intensive care units...
, chemotherapy
Chemotherapy
Chemotherapy is the treatment of cancer with an antineoplastic drug or with a combination of such drugs into a standardized treatment regimen....
, and pediatric care
Pediatrics
Pediatrics or paediatrics is the branch of medicine that deals with the medical care of infants, children, and adolescents. A medical practitioner who specializes in this area is known as a pediatrician or paediatrician...
. Their plans would be presented as either bronze, silver, gold, and platinum options, sorted by the least to the most expensive. Only individuals and firms with fifty or fewer employees would be eligible to use the exchanges until 2017, when states would bring in larger employers. In 2022, they would become open to all. Persons who are not lawfully in the United States would not be permitted to participate in the exchange, either with or without subsidies. According to Baucus:
"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. Name, social security number, and date of birth will be verified with Social Security Administration (SSA) data. For individuals claiming to be U.S. citizens, if the claim of citizenship is consistent with SSA data then the claim will be considered substantiated."
Although the proposal does not establish an employer mandate, which would have required firms to provide insurance for their workers or pay a penalty, the proposal requires businesses with more than fifty employees to pay fees going towards the aforementioned subsidies. The maximum possible fee would either be $400 per full-time employee or the average cost of the subsidies a firm's employee's take in multiplied by the number of those receiving them. The proposal forbids insurance companies from restricting coverage based on 'pre-existing conditions'. The insurance premiums can take into account tobacco use, age, family size, and geographic location. Insurance companies would also be forbidden from setting up lifetime or annual caps that specify a maximum amount of care that customers can receive.
The proposal also includes a new excise tax on so-called 'Cadillac
Cadillac insurance plan
A Cadillac plan is an informal term for any unusually expensive health insurance plan, usually arising in discussions of medical-cost control measures in the United States. The term derives from the Cadillac automobile, which has represented American luxury since its introduction in 1902, and as a...
' health care plans that are more expensive and comprehensive than the majority of plans. Any plan costing over $8,000 for an individual and $21,000 for a family would be subject to a 35% tax on the amount past those levels. The Center on Budget and Policy Priorities
Center on Budget and Policy Priorities
The Center on Budget and Policy Priorities is a non-profit think tank that describes itself as a "policy organization ... working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals."The Center examines the short- and...
, a liberal-leaning think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
, estimated that about 10% of families have plans that would be subject to the tax. The Committee for a Responsible Federal Budget
Committee for a Responsible Federal Budget
The Committee for a Responsible Federal Budget is an independent, non-profit, non-partisan public policy organization based in Washington, D.C. that addresses federal budget and fiscal issues...
has argued that this tax is beneficial both because it grows fast enough to keep up with new costs and because it can helps to slow health care cost growth. The group has also stated that the tax will cause employers to offer workers higher (taxable) cash wages instead of health benefits, thus generating more government revenue. According to Congress' joint committee on taxation, the proposal would create $215 billion in the next ten years from the tax. Another $93 billion in funds will come from new annual fees imposed on groups such as pharmaceutical companies and medical device manufacturers. Additionally, the Senate Finance Committee approved provisions that would lump Flexible Spending Accounts (FSAs) together with high-cost insurance plans and subject them to the excise tax, which would likely cause many employers to reconsider offering FSAs altogether.
Other funds come a reduction in future Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
spending, which would be over $400 billion in the next decade. Specifically, payments under the Medicare Advantage system would be decreased by $113 billion in the next decade. The so-called 'doughnut hole' in prescription drug coverage would be closed. In the long term, the proposal would set up an independent commission that could alter payments further.
Additionally, a small portion of funds would come from a new cap imposed on Flexible Spending Accounts (FSAs), pre-tax health benefits that enable millions of Americans to manage their out-of-pocket health care costs. Americans Healthy Future Act would impose a $2,500 limit on contributions to FSAs. Unfortunately, 7 million Americans have FSAs above $2,500, and those with the highest out-of-pocket health care costs- the sickest – would be hit the hardest by the restrictions.
CBO scoring of the bill
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(CBO) stated on September 16 that it would only cost about $774 billion over that period. The CBO
CBO
CBO is a three letter abbreviation which may mean:* CBO-FM, a CBC Radio One station in Ottawa, Ontario, Canada* Central Bank of Oman* Central Boycott Office, a specialized agency of the Arab League based in Damascus...
report stated that enacting the proposal would, on net, end up reducing the federal deficit
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...
by $16 billion in 2019. It also estimated that, by 2019, the number of non-elderly uninsured people would fall about 29 million, which would leave about 25 million of the non-elderly (about one-third illegal immigrants
Illegal immigration to the United States
An illegal immigrant in the United States is an alien who has entered the United States without government permission or stayed beyond the termination date of a visa....
) still uninsured. Thus, the number of non-elderly legal residents with insurance would rise from about 83% being covered to about 94% being covered. A Forbes.com report has stated that "it's not entirely clear what will happen to health care costs in 2020 and beyond."
On September 24, the CBO re-evaluated the proposal, taking into account the changes created by the Senate Committee. The CBO stated that the proposal would bring in $23 billion in the first ten years. Specifically, the Committee decreased the penalties for avoiding buying insurance, expanded the subsidies, and lowered the excise tax on high end insurance plans. A CBO report issued on October 7 stated that enacting the proposal would, on net, end up reducing the federal deficit
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...
by $81 billion over the 2010-2019 period. That report prompted praise from White House Press Secretary
White House Press Secretary
The White House Press Secretary is a senior White House official whose primary responsibility is to act as spokesperson for the government administration....
Robert Gibbs
Robert Gibbs
Robert Lane Gibbs was the 28th White House Press Secretary. Gibbs was the communications director for then-U.S. Senator Barack Obama and Obama's 2008 presidential campaign...
and from Senate Majority Leader Harry Reid
Harry Reid
Harry Mason Reid is the senior United States Senator from Nevada, serving since 1987. A member of the Democratic Party, he has been the Senate Majority Leader since January 2007, having previously served as Minority Leader and Minority and Majority Whip.Previously, Reid was a member of the U.S...
, Dem. from Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
, who called the scoring a "landmark occasion". Senate Minority Leader Mitch McConnell
Mitch McConnell
Addison Mitchell "Mitch" McConnell, Jr. is the senior United States Senator from Kentucky and the Republican Minority Leader.- Early life, education, and military service :...
, Rep. from Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
, criticized the numbers as misleading given that the Baucus proposal would not come into effect for about another five years.
Changes to the proposal
On September 25, the health correspondent for the News Hour with Jim Lehrer reported that the Committee had cut the proposed tax to medical supplies that belong to 'Class A', which includes items such as condoms and band-aidsBand-Aid
Band-Aid is a brand name for Johnson & Johnson's line of adhesive bandages and related products. It has also become a genericized trademark for any adhesive bandage in Australia, Brazil, Canada, India and the United States....
that cost below $100. Only the other classes would be taxed. On October 14, journalists from the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
stated that the 'Cadillac plans' tax would now impose a 40% fee on any plans exceeding $8,000 a year for individuals and $21,000 a year for families. They also described the individual mandate
Individual mandate
An individual mandate is a requirement by a government that certain individual citizens purchase or otherwise obtain a good or service.In the United States, the United States Congress has enacted two individual mandates, the first was never federally enforced, while the second is not scheduled to...
requirement as "much watered-down", with those earning less than 300% of the federal poverty now subject to a penalty of between $750 and $1,500 a year.
The premium subsidies for low-income individuals included in the final bill were structured to initially limit the premium middle-income people would have to pay for coverage to 12% of income. After the first year, however, the subsidy would be based on a percentage of premium rather than a percentage of income. Because costs are expected to rise more quickly than income, over time cost of coverage after subsidies will rise above the initial 12% of income limit.
Comparisons with other bills
Both the House health care reform bill (HR 3200) and the Senate Health, Education, Labor and Pensions Committee'sUnited States Senate Committee on Health, Education, Labor, and Pensions
The United States Senate Committee on Health, Education, Labor, and Pensions generally considers matters relating to health, education, labor, and pensions...
bill (S 1679) have a public plan. Baucus' proposal does not. The Health, Education, Labor and Pensions Committee
United States Senate Committee on Health, Education, Labor, and Pensions
The United States Senate Committee on Health, Education, Labor, and Pensions generally considers matters relating to health, education, labor, and pensions...
is considered to be more liberal than the Finance Committee. According to Norman Ornstein of the American Enterprise Institute
American Enterprise Institute
The American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...
, a conservative think tank, the Health Committee's proposal and the House bill will both lead to budget deficits in contrast to the Baucus' plan, which would reduce the debt. Ornstein has argued that this is an important advantage for the Baucus plan. Howard Dean
Howard Dean
Howard Brush Dean III is an American politician and physician from Vermont. He served six terms as the 79th Governor of Vermont and ran unsuccessfully for the 2004 Democratic presidential nomination. He was chairman of the Democratic National Committee from 2005 to 2009. Although his U.S...
has stated that the majority of Senate Democrats support a more liberal plan. If it reaches the Senate floor, Baucus' proposal will have to be amalgamated with the Health Committee's proposal.
On September 29, the Finance Committee rejected two amendments to add a public plan to Baucus' proposal. Senator Jay Rockefeller
Jay Rockefeller
John Davison "Jay" Rockefeller IV is the senior United States Senator from West Virginia. He was first elected to the Senate in 1984, while in office as Governor of West Virginia, a position he held from 1977 to 1985...
's amendment was rejected 15 to 8, with five Democrats (Baucus, Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...
, Blanche Lincoln
Blanche Lincoln
Blanche Meyers Lambert Lincoln is a former U.S. Senator from Arkansas and a member of the Democratic Party. First elected to the Senate in 1998, she was the first woman elected to the Senate from Arkansas since Hattie Caraway in 1932 and, at age 38, was the youngest woman ever elected to the...
, Tom Carper, Bill Nelson
Bill Nelson
Clarence William "Bill" Nelson is the senior United States Senator from the state of Florida and a member of the Democratic Party. He is a former U.S. Representative and former Treasurer and Insurance Commissioner of Florida...
) and all Republicans voting no. Senator Chuck Schumer's amendment was defeated 13 to 10, with three Democrats (Baucus, Conrad, Lincoln) and all Republicans voting no.
Responses from Finance Committee members
According to The San Francisco Chronicle, the proposal was "much-anticipated" and it represented the only attempt by a Senate committee to reach bipartisan compromise. McClatchy Newspapers has also called the proposal "closely watched". After its release, the proposal divided Congressional Democrats and attracted no support at all from Congressional Republicans according to National Public Radio health correspondent Julie Rovner.All of the Republicans on the Senate Finance Committee initially announced opposition to the proposal. Sen. Mike Enzi
Mike Enzi
Michael Bradley "Mike" Enzi is the senior U.S. Senator from Wyoming and a member of the Republican Party.Raised in Thermopolis, Wyoming, Enzi attended George Washington University and the University of Denver. He expanded his father's shoe store business in Gillette before being elected mayor of...
of Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
remarked, "[t]his bill does not do enough to lower costs, and in many cases, it will actually increase health-care costs through the new taxes mandated". Sen. Olympia Snowe
Olympia Snowe
Olympia Jean Snowe , née Bouchles, is the senior United States Senator from Maine and a member of the Republican Party. Snowe has become widely known for her ability to influence the outcome of close votes, including whether to end filibusters. She and her fellow Senator from Maine, Susan Collins,...
of Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
released a statement on Sept. 22 reading that "the mark before us is a solid starting point -- but we are far from the finish line." She said in the first week of October that she had not yet decided whether or not to vote for the plan. Norman Ornstein of the AEI
American Enterprise Institute
The American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...
has stated that the high cost "Cadillac" insurance plans
Cadillac insurance plan
A Cadillac plan is an informal term for any unusually expensive health insurance plan, usually arising in discussions of medical-cost control measures in the United States. The term derives from the Cadillac automobile, which has represented American luxury since its introduction in 1902, and as a...
, which would face a new tax under the Baucus plan, are more common in Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
compared to other states.
Amendments and proposed amendments
Baucus played a key role in facilitating the recent agreement between the Obama administration and the Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America , founded in 1958, is a trade group representing the pharmaceutical research and biopharmaceutical companies in the United States. PhRMA's stated mission is advocacy for public policies that encourage the discovery of new medicines for patients...
in which the group promised a $80 billion reduction in Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
drug prices over ten years. The administration then promised in return not to make any more financial demands on the group in the future. On Sept. 25, Democratic Sen. Bill Nelson
Bill Nelson
Clarence William "Bill" Nelson is the senior United States Senator from the state of Florida and a member of the Democratic Party. He is a former U.S. Representative and former Treasurer and Insurance Commissioner of Florida...
of Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
created an amendment to reverse the deal. The Committee voted 13-10 to reject the amendment.
The Finance Committee also rejected, by 14-9, an amendment removing the individual mandate
Individual mandate
An individual mandate is a requirement by a government that certain individual citizens purchase or otherwise obtain a good or service.In the United States, the United States Congress has enacted two individual mandates, the first was never federally enforced, while the second is not scheduled to...
from the proposal. Republican Sen. Jim Bunning
Jim Bunning
James Paul David "Jim" Bunning is an American former Major League Baseball pitcher and politician.During a 17-year baseball career, he pitched from 1955 to 1971, most notably with the Detroit Tigers and the Philadelphia Phillies. When he retired, he had the second-highest total of career...
of Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
proposed the change, which he said would remove an 'un-American
Un-American
Un-American is a pejorative term of US political discourse which is applied to people or institutions in the United States seen as deviating from US norms....
' requirement. Baucus labeled the amendment "mortally wounding" to the health care system set forth in the proposal.
Democratic Sen. Charles Schumer
Charles Schumer
Charles Ellis "Chuck" Schumer is the senior United States Senator from New York and a member of the Democratic Party. First elected in 1998, he defeated three-term Republican incumbent Al D'Amato by a margin of 55%–44%. He was easily re-elected in 2004 by a margin of 71%–24% and in 2010 by a...
of New York, who is Vice-Chairman of the Senate Democratic Conference, introduced an amendment to include a public plan in the proposal. The committee rejected his amendment on on Sept 29, in a 13 to 10 vote. Three Democrats (Baucus, Conrad, Lincoln) and all the Republicans voted no. Schumer had said on Sept. 24, that "I think we have a strong chance on the Senate floor to get it".
Finance Committee vote
On October 13, the Senate Fiance Committee made their final vote on the Baucus proposal. The committee passed its bill 14 to 9. All Republicans voted no with the exception of Sen. Olympia SnoweOlympia Snowe
Olympia Jean Snowe , née Bouchles, is the senior United States Senator from Maine and a member of the Republican Party. Snowe has become widely known for her ability to influence the outcome of close votes, including whether to end filibusters. She and her fellow Senator from Maine, Susan Collins,...
. She later commented, "When history calls, history calls." The San Francisco Chronicle referred to her vote as "a coup" for Baucus, coming after criticism from his fellow Democrats for making too many compromises. Snowe, as well as some moderate Democratic members of the committee, have vowed that they will drop their support for the Baucus plan if a 'public option' is added at any point.
Responses from other lawmakers
Democratic Sen. Tom HarkinTom Harkin
Thomas Richard "Tom" Harkin is the junior United States Senator from Iowa and a member of the Democratic Party. He previously served in the United States House of Representatives ....
of Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
, who became Chairman of the Senate Committee on Health, Education, Labor, and Pensions
United States Senate Committee on Health, Education, Labor, and Pensions
The United States Senate Committee on Health, Education, Labor, and Pensions generally considers matters relating to health, education, labor, and pensions...
following the death of Sen. Ted Kennedy
Ted Kennedy
Edward Moore "Ted" Kennedy was a United States Senator from Massachusetts and a member of the Democratic Party. Serving almost 47 years, he was the second most senior member of the Senate when he died and is the fourth-longest-serving senator in United States history...
, generally praised the proposal and was reported as then becoming more "optimistic" that health care reform would pass the Congress in 2009. He also commented, however, that the co-operatives system leaves "a lot to be desired." Democratic Sen. Ron Wyden
Ron Wyden
Ronald Lee "Ron" Wyden is the senior U.S. Senator for Oregon, serving since 1996, and a member of the Democratic Party. He previously served in the United States House of Representatives from 1981 to 1996....
of Oregon
Oregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
, a key figure behind the rival Healthy Americans Act
Healthy Americans Act
The Healthy Americans Act , also known as the Wyden-Bennett Act, is a Senate bill that proposes to improve health care in the United States by transitioning away from how currently employers typically purchase their employees' health insurance for them, to having individuals purchase their own...
, expressed concern that Baucus' plan would not do enough to promote competition in the private insurance marketplace.
In an official GOP weekly message in mid-October, Rep. Kevin Brady of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
argued that "Americans inherently know government interference drives costs up, not down... The massive health care plans being crafted behind closed doors in Washington will ultimately allow the government to decide what doctors we can see, what treatments the government thinks you deserve and what medicines you can receive."
Responses from the Obama administration
The day after Baucus made his proposal, President Barack ObamaBarack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
referred to the plan during a speech at the University of Maryland
University of Maryland
When the term "University of Maryland" is used without any qualification, it generally refers to the University of Maryland, College Park.University of Maryland may refer to the following:...
. He declined to endorse Baucus's plan directly, but he criticized the opponents of his broader goals in health care reform. The crowd of left-leaning
Left-wing politics
In politics, Left, left-wing and leftist generally refer to support for social change to create a more egalitarian society...
college students booed at the mention of Baucus' proposal and cheered at Obama's other comments.
Obama praised the Senate Finance Committee's vote in support of the Baucus plan on a September 13 address. He described the vote as a "critical milestone" and stated that it "has brought us significantly closer to achieving the core objectives I laid out". The President also said, "We are now closer than ever before to passing health care reform, but we're not there yet... Now's the time to dig in and work even harder to get things done."
Other responses
The U.S. Chamber of Commerce sent a letter to Baucus and Ranking Republican MemberRanking member
In United States politics, a ranking member is the second-most senior member of a congressional or state legislative committee from the majority party. Another usage refers to the most senior member of a congressional or state legislative committee from the minority party. This second usage, often...
Chuck Grassley
Chuck Grassley
Charles Ernest "Chuck" Grassley is the senior United States Senator from Iowa . A member of Republican Party, he previously served in the served in the United States House of Representatives and the Iowa state legislature...
that labeled the proposal "unacceptable in many areas" while still "the most balanced health reform proposal to be marked up by Congress to date." The group highlighted the proposed tax on high-value insurance plans as unacceptable. Michael D. Tanner, a CATO Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
senior fellow, criticized several aspects of the proposal such as the health care materials tax, which he said "will result in higher health care costs that will be passed on to consumers", and the individual mandate
Individual mandate
An individual mandate is a requirement by a government that certain individual citizens purchase or otherwise obtain a good or service.In the United States, the United States Congress has enacted two individual mandates, the first was never federally enforced, while the second is not scheduled to...
, which he labeled "heavily punitive".
Harold A. Schaitberger, general president of the International Association of Fire Fighters
International Association of Fire Fighters
The International Association of Fire Fighters is a labor union representing professional firefighters in the United States and Canada. The IAFF was formed in 1918 and is affiliated with the AFL-CIO in the United States and the Canadian Labour Congress in Canada. The IAFF is headquartered in...
, stated that the proposal "puts a bigger tax on middle-income Americans who are already paying enough". Jim Hoffa
James P. Hoffa
James Phillip Hoffa is an attorney and labor leader and the General President of the International Brotherhood of Teamsters. Hoffa was first elected during December 1998 and took office on March 19, 1999...
, president of the Teamsters
Teamsters
The International Brotherhood of Teamsters is a labor union in the United States and Canada. Formed in 1903 by the merger of several local and regional locals of teamsters, the union now represents a diverse membership of blue-collar and professional workers in both the public and private sectors....
union, and Sen. John D. Rockefeller IV also expressed opposition to the health plan tax. President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
expressed support for the proposed tax, saying that "I do think that giving a disincentive to insurance companies to offer Cadillac plans
Cadillac insurance plan
A Cadillac plan is an informal term for any unusually expensive health insurance plan, usually arising in discussions of medical-cost control measures in the United States. The term derives from the Cadillac automobile, which has represented American luxury since its introduction in 1902, and as a...
that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term." Republicans in the Finance Committee have called the tax a violation of Obama's campaign promise
Barack Obama presidential campaign, 2008
Barack Obama, then junior United States Senator from Illinois, announced his candidacy for the presidency of the United States in Springfield, Illinois, on February 10, 2007. On August 27, 2008, he was declared nominee of the Democratic Party for the 2008 presidential election...
to not raise taxes
Taxation in the United States
The United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
on anyone earning less than $250,000 a year.
The AARP
AARP
AARP, formerly the American Association of Retired Persons, is the United States-based non-governmental organization and interest group, founded in 1958 by Ethel Percy Andrus, PhD, a retired educator from California, and based in Washington, D.C. According to its mission statement, it is "a...
has not objected to the cuts to future Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
spending in the proposal. Charles Kahn
Charles N. Kahn III
Charles N. Kahn III is the President and Chief Executive Officer of the Federation of American Hospitals , whose member companies own nearly 20 percent of all American hospital beds...
, president of the Federation of American Hospitals
Federation of American Hospitals
The Federation of American Hospitals is a trade association for investor-owned hospitals in the United States. It is based in Washington D.C. It is currently headed by "Chip" Kahn.-See also:*List of industry trade groups in the United States...
, has called the proposal "the right thing to do." The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
has labeled the possible changes as "designed to be relatively painless". The National Council of La Raza
National Council of La Raza
The National Council of La Raza is a non-profit and non-partisan advocacy group in the United States, focused on improving opportunities for Hispanics. It is sometimes confused with La Raza Unida...
opposes the measures in the proposal that require individuals to prove their citizenship status before receiving coverage. The group has created a campaign to leave Senators voice mail messages about the issue.
Former CIGNA
CIGNA
Cigna , headquartered in Bloomfield, Connecticut, is a global health services company, owing to its expanding international footprint and the fact that it provides administrative services only to approximately 80 percent of its clients...
VP-turned health care activist Wendell Potter
Wendell Potter
Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate as a whistleblower....
has criticized the Senate Committee for rejecting a public option. He charged that Senators are only taking their positions due to pressure from insurance industries in an interview with Amy Goodman
Amy Goodman
Amy Goodman is an American progressive broadcast journalist, syndicated columnist, investigative reporter and author. Goodman is the host of Democracy Now!, an independent global news program broadcast daily on radio, television and the internet.-Early life:Goodman was born in Bay Shore, New York...
. Howard Dean
Howard Dean
Howard Brush Dean III is an American politician and physician from Vermont. He served six terms as the 79th Governor of Vermont and ran unsuccessfully for the 2004 Democratic presidential nomination. He was chairman of the Democratic National Committee from 2005 to 2009. Although his U.S...
, former Democratic National Committee
Democratic National Committee
The Democratic National Committee is the principal organization governing the United States Democratic Party on a day to day basis. While it is responsible for overseeing the process of writing a platform every four years, the DNC's central focus is on campaign and political activity in support...
chairman, has remarked that "The Baucus bill is the worst piece of healthcare legislation I've seen in 30 years". He has also said, "it's a $60 billion giveaway to the health insurance industry every year... It was written by healthcare lobbyists, so that's not a surprise. It's an outrage."
Americans United for Life
Americans United for Life
Americans United for Life is an American pro-life public interest law firm and advocacy group based in Washington, D.C. Founded in 1971, the group advocates protection of human life at all stages of life, from conception to death, and is involved in related issues of health and biotechnology...
(AUL), the first national pro-life organization in the United States, has stated that federal taxpayer funding of abortion
Abortion in the United States
Abortion in the United States has been legal in every state since the United States Supreme Court decision in Roe v. Wade, on January 22, 1973...
could still be mandated by the Baucus bill, despite claims to the contrary. AUL's CEO Dr. Charmaine Yoest stated that the bill "provides $6 billion for the establishment of health insurance cooperatives which would be permitted to cover abortion". He also said that if the Hyde Amendment
Hyde Amendment
In U.S. politics, the Hyde Amendment is a legislative provision barring the use of certain federal funds to pay for abortions. It is not a permanent law, rather it is a "rider" that, in various forms, has been routinely attached to annual appropriations bills since 1976...
is not renewed, coverage for all abortions would be mandated, under this legislation.
The editors of National Review
National Review
National Review is a biweekly magazine founded by the late author William F. Buckley, Jr., in 1955 and based in New York City. It describes itself as "America's most widely read and influential magazine and web site for conservative news, commentary, and opinion."Although the print version of the...
criticized the plan, arguing that "his proposal resorts to the same kinds of arbitrary fee cuts, taxes, and regulatory payment-control schemes that have been tried many times before and have never worked." The Weekly Standard
The Weekly Standard
The Weekly Standard is an American neoconservative opinion magazine published 48 times per year. Its founding publisher, News Corporation, debuted the title September 18, 1995. Currently edited by founder William Kristol and Fred Barnes, the Standard has been described as a "redoubt of...
also ran an article blasting the proposal and stating that it would increase the cost of health insurance premiums through controls such as making individuals buy more comprehensive insurance than they would otherwise want. The Wall Street Journal editorial
Editorial
An opinion piece is an article, published in a newspaper or magazine, that mainly reflects the author's opinion about the subject. Opinion pieces are featured in many periodicals.-Editorials:...
ized that Baucus' plan, a "Rube Goldberg proposal
Rube Goldberg machine
A Rube Goldberg machine, contraption, device, or apparatus is a deliberately over-engineered or overdone machine that performs a very simple task in a very complex fashion, usually including a chain reaction...
", would eventually lead to a total government takeover of the health care industry.
B'nai B'rith International and the Religious Action Center of Reform Judaism both released statements praising the Senate Finance Committee after its vote in favor of the Baucus plan on October 13. The latter group stated that "Jewish tradition teaches that human life is of infinite value and that the preservation of life supersedes all other consideration. Providing health care is not just an obligation for the patient and the doctor, but for society as well." It also referred to Maimonides
Maimonides
Moses ben-Maimon, called Maimonides and also known as Mūsā ibn Maymūn in Arabic, or Rambam , was a preeminent medieval Jewish philosopher and one of the greatest Torah scholars and physicians of the Middle Ages...
' placing of health care first on his list of the ten most important communal services in Maimonides
Maimonides
Moses ben-Maimon, called Maimonides and also known as Mūsā ibn Maymūn in Arabic, or Rambam , was a preeminent medieval Jewish philosopher and one of the greatest Torah scholars and physicians of the Middle Ages...
' work Mishneh Torah (Hilchot De’ot IV: 23)
Mishneh Torah
The Mishneh Torah subtitled Sefer Yad ha-Hazaka is a code of Jewish religious law authored by Maimonides , one of history's foremost rabbis...
.
On October 14, journalists from Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
stated that "[t]he bill claims that it will bend the fiscal curve by reducing the rate of healthcare inflation... Economists are sceptical on whether it will achieve this aim." Shawn Tully, editor at large for Fortune, stated on Oct. 9 that the Baucus bill would provide incentives for employers not to provide insurance to its employees. She further argued that at worst the plan would add $90 billion to the CBO's original projection annually.
See also
- Health care reform debate in the United StatesHealth care reform debate in the United StatesThe health care reform debate in the United States has been a political issue for many years, focusing upon increasing coverage, decreasing the cost and social burden of healthcare, insurance reform, and the philosophy of its provision, funding, and government involvement...
- History of health care reform in the United StatesHistory of health care reform in the United StatesThe issue of health insurance reform in the United States has been the subject of political debate since the early part of the 20th century. Recent reforms remains an active political issue...
- Affordable Health Care for America ActAffordable Health Care for America ActThe Affordable Health Care for America Act was a bill that was crafted by the United States House of Representatives in November 2009. At the encouragement of the Obama administration, the 111th Congress devoted much of its time to enacting reform of the United States' health care system...
- Wyden-Bennett Act
- Max Baucus#Health care reform
External links
- Cost of the Finance Committee Health Care Bill, The Bottom Line (Committee for a Responsible Federal Budget)
- Text of a Summary of the Proposal
- Side-by-side Comparison of Health care Reform Efforts from the Kaiser Family FoundationKaiser Family FoundationThe Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...