Evaluating the Baucus Health Care Proposal

The latest “leading” national health care reform proposal is a bill Sen. Baucus (already being panned by the left for getting rid of the “public option” and replacing it with nonprofit “co-ops”, and by unions for taxing health care benefits).

Cato’s Michael Tanner looks at the good, the bad, and the ugly in this health care proposal.

The Ugly:

—The Baucus plan contains a heavily punitive individual mandate, a requirement that every American purchase a government-designed minimum insurance package. Failure to comply would result in a fine that could run as high as $3,800 for a family of four. Moreover, the mandate may not apply just to those without insurance today. While the summary says that those with “grandfathered” plans would not have to change their current plan to satisfy the mandate, it is vague about what qualifies as “grandfathered.” The summary also says that employer-provided plans would have to be changed within five years to comply with new insurance regulations, and that “grandfathered” plans would not be eligible for any subsidies. It is unclear, therefore, whether people will be able to keep their current plans.

— The Baucus plan imposes a 35 percent excise tax on health insurance plans that offer benefits in excess of $8,000. Insurers would almost certainly pass this tax on to consumers in the form of higher premiums. Roughly half of Americans, mostly middle-class, would be effected. There are also “fees” on prescription drug companies, medical device manufacturers, and clinical laboratories. This is simply a way of hiding taxes, and will result in higher health care costs that will be passed on to consumers.

The Heritage Foundation also reviews the Baucus health care plan, finding seven fatal flaws:

A public plan disguised as a co-op, individual and employer mandates, massive federal regulation over insurance and benefits, and massive Medicaid expansion—the Baucus bill has them all. These are the same features plaguing the other bills in Congress and that Americans have routinely dismissed for months.