Nate Silver Skewers the Baucus Health Plan

I’m generally not one to write posts based on another blogger’s work, but I feel this analysis on FiveThirtyEight is too good to let slide without a mention here.

So there’s not a public option in the Finance Committee’s bill — which should come as no great surprise to anyone who’s been following this debate. Instead, there’s Kent Conrad’s plan for regional, non-profit cooperatives. The real fight over the public option will take place when the HELP Committee’s bill, which does include a public option, is reconciled with the Finance Committee’s version, and/or when the Senate’s version is ultimately reconciled with the House version.

The bigger news, rather, is that Baucus’s bill will not contain an employer mandate — a requirement that employers provide health insurance to their employees — even though it does contain an individual mandate.

Does this look familiar to anyone?

— No employer mandate
— No public option
— But yes, an individual mandate
It should — because this particular permutation on health care reform looks an awful lot like the incomplete draft of the HELP Committee’s bill that the CBO scored last month, which also lacked an employer mandate and a public option but contained an individual mandate. That bill, the CBO estimated, would cost about $1.0 trillion — but would only cover a net of about 16 million people. In contrast, the revised version of the HELP Committee’s bill, which did include both a public option and an employer mandate, would cost about the same amount but cover a net of 37 million people.

D’oh!

Baucus’s bill makes a different trade-off. In order to placate business interests on the employer mandate, and what are frankly ideological interests on the public option, it sacrifices coverage. If I’m reading this right, in fact, 16 million might be on the high end in terms of the net gain in coverage. That’s because whereas the HELP Committee’s unfinished draft subsidized insurance at up to 500 percent of the poverty line (meaning $54,150 for an individual or $110,250 for a family of four), the assistance in Baucus’s draft would end for people making more than 300 percent of poverty ($32,490 for an individual or $66,150 for a four-person family).

The AP may be right that Baucus’s bill will cost less than $1 trillion, but it accomplishes that by shifting the burden to middle-income families, some of whom have poor balance sheets and will face a really tough choice between paying for health insurance they can’t quite afford and facing some kind of penalty. Odds are that many of them will take the penalty, which is why coverage probably won’t expand very much. Or, the enforcement mechanisms could be more stringent, in which case they’ll have to buy health care, at the cost of reducing their spending in other areas — and in probably being very teed off at the Democrats who passed the bill**.

So you see a similar effect to what happened when Blue Dogs and industry interests got their hands on the Waxman-Markey climate bill. The burden of the policy change is shifted almost entirely from large corporations and the rich to middle-class Americans and small businesses. See how that dovetails with Bronwyn’s post earlier this morning? Here’s Nate’s conclusion:

** Just to underscore this point: when it scored a similar bill, the CBO estimated that 15 million people would lose their employer-provided coverage. Most of these people are likely to be lower-to-middle income persons with somewhat tenuous employment situations, a group that tends classically to be swing voters.

Now, how are those 15 million people going to feel about health care reform when they find out that:

a) Although the bill was supposed to guarantee access to health insurance, they’ve in fact lost theirs;
b) They’re required to buy an expensive, private plan on their own, or to pay a fine;
c) They’re probably not getting any government assistance;
d) They certainly don’t have any Medicare-like alternative to fall back upon;
e) All of this cost the country about $1 trillion dollars.

You think those 15 million people are going to vote for the Democrats again, like, ever?

Time for the Blue Dogs, and all Democrats for that matter, to put up or shut up. Do they stand with everyday Americans or just the well-connected? If they choose the latter, it may turn out to be death knell for their own political careers as their economically disadvantaged constituents wise up to their true inclinations.

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