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Thursday, September 17, 2009

We Waited Months For This?

Yesterday, there was a little bump on Wall Street. HealthNet shares increased by 3%, United Health Group Inc shares rose by 2.7%, Humana Inc. grew by 2.6%, Wellpoint stock rose 1.7%, and Aetna Inc. gained 1.6%. The Center for American Progress's Think Progress asked former insurance executive Wendell Potter, now an insurance industry critic, what might explain this; "[E]very time there is an article in a big newspaper questioning the success of progressives in getting a good bill passed, the stock will go up," Potter said. "The analysts/investors don't think any good reform is going to happen, or anything that would happen that would adversely affect the insurance companies." So what big story was out there to cheer insurance company investors?

Max Baucus's healthcare reform bill has finally been introduced. Wow, there's a ringing endorsement. Only Max Baucus and the insurance companies like this dog. "The Baucus framework is just an absolute joke," Potter told reporters after reviewing the bill. "It is an absolute gift to the industry. And if that is what we see in the legislation, (America’s Health Insurance Plans chief) Karen Ignagni will surely get a huge bonus." Pop the champagne corks!

"Potter said the proposal would not provide affordable coverage," Politico reports. "It gives the industry too much latitude to charge higher premiums based on age and geographic location, fails to mandate employer coverage, and pushes consumers into plans with limited benefits..." Not to mention a lack of a public option.

"I was stunned to see that the bill allows insurers to charge up to five times as much for some enrollees as for others, based on age," writes health analyst RJ Eskow. "...The Baucus bill allows insurers to use age as a proxy for costly medical conditions and make coverage prohibitively expensive for those who need it the most."

In other words, age would now be a pre-existing condition and you can expect to pay out the nose as you get older. This isn't what you'd call "reform," so much as it is just making things worse.

At least on Democratic member Baucus's Finance Committee, Jay Rockefeller, says he can't vote for the Baucus bill, citing a tax-funding formula that will be passed on to middle class workers.

Teddy Davis, ABC News:

The Baucus proposal would impose, starting in 2013, a 35 percent excise tax on insurance companies for "high-cost plans" -- defined as those above $8,000 for individuals and $21,000 for family plans.

Health economists believe a tax on high-priced benefits could help slow the growth of health costs by making consumers more sensitive to prices.

The tax contemplated by Baucus is also a big revenue raiser. It is expected to raise $200 billion, money that Baucus is hoping to use to pay for subsidies for the uninsured.

Given how much money this kind of tax can raise, Rockefeller says he understands why it is "tempting."

But Baucus either seems to believe that only the wealthy have "high-cost" plans or just doesn't care who does. In his own state of West Virginia, Rockefeller sees this as hurting coal miners, who have generous plans because of the health problems arising from their work.

"He should understand that (his proposal) means that virtually every single coal miner is going to have a big, big tax put on them because the tax will be put on the company and the company will immediately pass it down and lower benefits because they are self insured, most of them, because they are larger," Rockefeller says. "They will pass it down, lower benefits, and probably this will mean higher premiums for coal miners who are getting very good health care benefits for a very good reason. That is, like steelworkers and others, they are doing about the most dangerous job that can be done in America."

While Rockefeller may be the only Democrat on the committee willing to say he'll vote against it, that doesn't mean others won't do the same. Statistician Nate Silver took a look at statements from other members of the committee and could only find one senator willing to give the bill even weak support.

"But let's be clear -- some of this is Baucus's chickens coming home to roost," Silver writes. "When you make a unilateral decision to negotiate with only five other people from a 23-person committee and 100-person Senate, and two of those five people have clear electoral disincentives against supporting any plan that you might come up with, the negotiations are liable to end in failure far more often than not. The flurry of on-the-record statements against Baucus's reform plans -- not 'leaks,' not trial balloons -- points toward a defective process."

After weeks going on months of a snipe hunt for Republican votes, Baucus comes up with a bill that Republicans should support -- God knows it's awful enough -- but won't. Mostly because they have no interest in reform at all. The GOP is all about hurting Democrats these days. That's it. That's all they do. Chasing them around trying to reach a compromise was a fool's errand and, apparently, Sen. Max Baucus was just the fool for the job. Worse, when it became obvious that there would be no bipartisan bill, Baucus went ahead and threw in a bunch of Republican proposals anyway -- maybe so he could pretend it's bipartisan.

Or maybe because Sen. Max Baucus, Democrat of Montana, doesn't work for the people.

"Lobbying disclosure filings for the first quarter of 2009 reveal that five of Baucus’ former staffers currently work for a total of twenty-seven different organizations that are either in the health care or insurance sector or have a noted interest in the outcome," reports the Sunlight Foundation, a group dedicated to government transparency. "The organizations represented include some of the top lobbying organizations in the health sector: Pharmaceutical Manufacturers and Researchers of America (PhRMA), America’s Health Insurance Plans (AHIP), Amgen, and GE Health Care."

This has been a fundraising bonanza for Baucus, who received a lot of lobbyist money for his weakly contested 2008 race. "In 2008, Baucus received $1,148,775 from the health sector and $285,850 from the insurance sector," the foundation tells us. "For his career he has received $2,797,381 from the health sector and $1,170,313 from the insurance sector."

The good news is that there are five reform bills from various house and senate committees that will have to be resolved into a single bill through mark-up in each chamber, then in conference committee between both houses before it reaches the president's desk -- of these, Baucus's is easily the worst and seems to be the least popular. It's also the only bill without a public option.

Those Wall Street insurance company investors might want to chug that champagne, because this party may not last very long.


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