CALPIRG Blog

For months, health care reformers have been waiting for U.S. Senator Max Baucus to introduce his bill.  As Chair of the powerful Senate Finance Committee, he's got a lot of clout.  He's also taken the lead on negotiating with Senate Republicans, trying to win a 60-vote, filibuster-proof majority for reform.

This week, after President Obama's speech helped stoke the momentum for reform the wait finally came to an end, as Baucus released his proposed legislation. 

(If you don't have the fortitude -- or free time -- to plow through the full 223 page bill, there's a much shorter official summary, and a Washington Post blogger has posted about many of the key policies)

Despite weeks of negotiation, no Republicans support the bill -- and the compromises made to try to win their votes mean that in many respects, this is a weak bill that needs to be improved.

But at the same time, it gets a lot of the less flashy issues right.  As health care reform comes down to the wire, it's critical that we keep in place the Baucus Bill's strong framework for bringing down cost.

Let's start with what's bad.  First of all, there's no public health insurance option, despite the fact that this would expand choice, keep private insurers honest, and save over $240 billion.  There's a "compromise" that replaces the public option with a system of poorly-thought-out local, private co-ops, which are a six billion dollar red herring.

Strike two is a provision that would wind up penalizing business that hired low-income workers.  This would irrationally tilt the playing field, favoring high-wage businesses in richer areas, not to mention making it even harder for those with low earning power to get and keep a job.  It's fair to ask employers to do their part, but this isn't the right way to do it.

The third strike is that the affordability protections need to be stronger.  The legislation moves towards universal coverage -- we know that getting more people in the system helps bring down costs, ends unfair shifting of costs, and ultimately makes premiums more fair.  And since some people can't currently afford insurance, it includes subsidies to help them. But the way the bill is currently set up, working families who are struggling the hardest to make ends meet will get the least help.  To get this done will cost a little more up-front.

That's enough to put you out in baseball.  But that's not the end of the story.  There's actually a whole lot to like in the bill, too.

Of course, it does many of the same things all the other bills do -- it gets rid of pre-existing conditions, requires insurers to take all comers and offer them the same fair rate.  It helps small businesses pool their bargaining power and get a better price for insurance.  And it funds unbiased research into what treatments work best.

But it also does some things better than either the House bill or the Senate Health Committee bill.  In particular, it does the most to shift the incentives in the system that leave us poorer and less healthy.

For example, it would start a project to pay hospitals according to the quality of their performance and the health outcomes they achieve, rather than simply the volume of care that they provide.  It would also encourage groups doctors to coordinate the care they provide for a single patient, incentivize preventive care, and encourage hospitals to reduce preventable medical errors. 

It takes a long hard look at medical care that drives up costs but hasn't been getting us results -- the overuse of medical imaging tests, which are often ordered by the same people who own the machines and make the profit, gets an especially close examination.

But the single biggest idea in the Baucus bill has the potential to bring down costs not just this year, but next year, and the one after that, and the one after that...  It would set up an independent commission to help Medicare deliver quality, low-cost coverage.  Right now, special interests are able to lobby Congress and block policy changes that would save us money and improve our health.  But the new commission would submit recommendations that would be fast-tracked, so that the lobbyists couldn't block them.  And the best part is that they'd submit a new set of reforms every year costs continue to climb.

Taken together, there are a lot of smart policies in the bill to tame rising premiums.  There are some big holes that need to be filled, and some misguided policies that need to be changed.  But holding onto the best pieces of the Baucus Bill will help ensure that we're getting the policy right and bringing down costs in the long term.