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September 07, 2009

Senate Finance Committee Draft Health Care Plan: No Government Option But Co-Ops And Lots Of Taxes And Fees

After an enjoyable diversion into the world of Van Jones last week, it's back to fighting off the government destruction of the health care system.

The Senate Finance Committee after weeks of chatting has finally created a draft plan.

As expected, Baucus’ proposal does not include a public insurance option, but instead features insurance cooperatives that could appeal to moderate Democrats and perhaps some Republicans. That’s a major difference from bills approved by three House committees and the Senate Health, Education, Labor and Pensions committee.

Baucus’ plan also is expected to be less generous in terms of subsidies and coverage than those bills – which, along with the absence of the public option, is sure to rankle more liberal Democrats.

The bipartisan group also is considering a tax on insurance companies
that provide expensive coverage plans. And one feature that might help satisfy the more liberal members of the committee is that insurance companies could face a separate new fee to help pay for the plan. It would be determined based on market share, and could raise $6 billion a year starting in 2010, the sources said.

This will help keep costs down because corporate taxes and fees never get passed onto consumers or anything. Shouldn't people reworking about 17% of the world's largest economy have some basic understanding of economics?

Now we just wait and see if the Justice Anthony Kennedy of the Senate, Olympia Snowe, gives it her thumbs up or down.

Republican Congressmen Shadegg and Hoekstra have laid out their plans for what health care reform should look like. They break the issue down into three categories, Costs and Control, Pre-existing Condition and access.

Their "Costs and Control" proposals are the best part.


•Costs and Control. The health-care reform debate centers on how to lower the cost of care, and who should ultimately control health-care decisions. Under the current system, nobody is focused on controlling costs.

Roughly 60% of all health care in America is employer-provided. This third-party payment structure has divorced the consumer—the patient—from the real cost of services. It encourages excess spending, runaway lawsuits, defensive medicine (doctors ordering unnecessary tests and procedures out of fear of being sued), and huge malpractice premiums.

President Obama and Democrats in Congress say that a new federal health-care bureaucracy and a so-called public plan is the answer. They are wrong.

Government has caused the problems we face in health care. Our tax code incentivizes employer-provided health care, rewards health insurance companies by insulating them from accountability, and punishes those who lack employer-provided care.

Every night on television there are dozens of commercials from Geico, Progressive, Allstate and other companies offering us better auto insurance at lower costs. But there are virtually no commercials for health insurance. This is because the federal government protects health insurance companies from real competition. Insurers don't have to market to consumers. They only have to satisfy employers. In addition, a person living in New York, for example, is currently only permitted to purchase individual insurance in New York. Allowing competition across state lines would drive down cost tremendously.

We believe the solution to this problem is patient choice. What appears to be a free market in health care today is not. The health-care market is a stacked deck that favors insurance companies rather than patients.

We must stop punishing Americans who buy their own plan by forcing them to purchase their care with after-tax dollars, making it at least one-third more expensive than employer-provided care. Individuals should be able to take their employer's plan, or turn it down and select insurance of their own choosing without any tax penalty.

I think it's good that Republicans have some reasonable policy initiatives for this fight but I'd prefer they just stick with "No" and attacking the Democrats plans.

Proposing a plan of any sort gives the Democrats something to attack and takes the focus off their plans (given their huge congressional majorities and control of the White House, they are the only plans that will be up for real consideration).

Ultimately, this is fight among Democrats. We should just be egging both sides on to keep fighting and bringing outside pressure against all of them.

The time for the Republicans to propose something (if we must at all) is next year in the run up to the elections. For now it's better to just keep on the attack.

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posted by DrewM. at 05:24 PM

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