Baucus, Under Fire From Fellow Dems and Unions, Signals Minor Compromises

Art Levine

Sen. Max Baucus (D-Mont.), left, confers with Sen. Chuck Grassley (R-Iowa). Both are ranking members of the Senate Finance Committee, which released its healthcare bill proposal Wednesday.

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After failing to placate any Republicans with his Gang of Six”-crafted bipartisan legislation that omits a public option and offers relatively meager subsidies to low-income workers, Sen. Max Baucus struggled to avoid a D.O.A” fate for his legislation.

In an interview with Time Magazine, Baucus signalled today some minor compromises that likely won’t placate his critics on the left, including unions. Some of that rage was unleashed on the floor of the AFL-CIO convention this week (hat tip to Firedoglake):

Union leaders denounced a proposed overhaul of the U.S. health system introduced today by Senator Max Baucus, saying it fails to pressure insurance companies for savings and would tax health plans.

Delegates at the AFL-CIO’s convention in Pittsburgh chanted bullshit” in response to the plan from the Senate Finance Committee’s chairman. They were led in the chant by Gerald McEntee, president of the American Federation of State, County and Municipal Employees. He said the labor federation’s members should lobby against the proposal because it doesn’t mandate that employers provide health insurance and taxes our health plans.”

Indeed, union leaders and organizations were eagerly coming forward to denounce the plan, even as the AFL-CIO went on record earlier this week as the first major union organization to favor a single-payer health system, while it’s still backing a public option.

Jane Hamsher of Firedoglake has helped pull together an array of union statements condemning the plan, while highlighting the opposition the Baucus plan has generated from other segments of the Democratic base – including students at College Park, Maryland yesterday.

Union groups have zeroed in on the proposed stiff taxation of so-called Cadillac plans – i.e. often decent benefits generated after hard-won union negotiations. (Baucus, though, indicated a new willingness last Thursday to raise the threshold of what plans are taxed: Union plans are very expensive, and we have to be respectful of that.” )

Even so, Teamster leader James Hoffa and other union leaders denounced the notion of high taxes on relatively generous plans as imposing a penalty on workers:

Teamsters General President Jim Hoffa today said the
proposal to impose a 35 percent tax on insurers for individual health insurance plans worth more than $8,000 is unfair and unnecessary.

The proposal, introduced by Senate Finance Committee Chairman Max Baucus, would also levy the 35 percent tax for family plans worth $21,000.

We’re pleased that Sen. Baucus stopped short of taxing American workers
directly, but we fear that ultimately they will pay the price in higher-cost insurance,” Hoffa said. Middle-class wage earners cannot afford to pay more for health insurance than they already do. We much prefer the House plan, which would pay for expanded coverage by imposing a surcharge on those who can afford it – the wealthiest Americans.”

We will fight to convince the conference committee to drop this excise tax,” he said.

Hoffa said the proposal misses the point that many plans are expensive because insurers have too much market power, not because they offer more health care than cheaper plans.

SEIU leader Andy Stern struck a more concilliatory tone, but still hammered away at the omissions in the Baucus bill:

Key provisions that must be improved, include:

 — *Affordability:* Affordability provisions – out of pocket protections and tax credits to help low and moderate income families – should be strengthened so that everyone has access to care they can afford.

- *Employer Responsibility*: While there is broad agreement on the need for shared responsibility among individuals, employers and government, the lack of real employer responsibility is a concern.

 — *Strong Public Option*: It is unclear how the co-op model can truly compete with for-profit insurance companies — a strong public health
insurance option would level the playing field and provide real competition, plus accountability.

 — *Fair Taxation*: Like the President has said, this bill must be fully paid for in a responsible way; however, a tax on high cost plans will unfairly burden older workers and workers in high-cost states.

While the Senate Finance Committee bill takes some good first steps, there are serious flaws the Committee must address,” said Stern. We are confident that when a bill goes to the Senate Floor, every American will be able to count on quality care at a price they can afford.”

And departing AFL-CIO president John Sweeney took one of the strongest shots at the Baucus plan. It’s yet another sign that this bill will, conceivably, have less of a chance to get through Congress than more progressive approaches, especially if Senators use a budget reconciliation tactic that requires only 51 votes to pass. (Here’s one roadmap to passage, via Talking Points Memo DC.) Sweeney declared:

It fails to put pressure on private insurers to control health care costs. There is no history or logic behind the claim that health care co-ops would provide real competition for the giant private insurers that have a 
stranglehold on health coverage today.

If you’re an individual who does not purchase private health coverage, it sticks you with a hefty tax penalty even though it fails to provide sufficient subsidies to make plans affordable for low and moderate income families. But if you’re an irresponsible employer who does not provide coverage, you get off scot free.

Outrageously, the plan imposes a 35 percent tax on high-cost health care plans without prohibiting insurers from passing on the tax to consumers who happen to be in groups that are older or sicker than average or live in high cost areas.

The Senate Finance proposal, sadly, is little more than a throwback to the failed policies of the last three decades that advantaged corporations over taxpayers and bestowed special breaks on the wealthy while ignoring the middle class.

With such harsh comments on the Baucus bill, it could open upa new window for reform for grass-roots activists seeking tougher legislation — assuming they can muster enough support to beat back industry lobbyists.

UPDATE: There’s another reason critics are wary of the Baucus bill: As reported by Huffington Post, it gives drug manufacturers virtually all they wanted to protect their profit margins and to avoid using government negotiating power to keep down prices — all stemming from a secret deal with the White House that all the players previously denied.

In fact, it even offers further chances for the companies to use Medicaid rebates that have already been shown to be rigged by the companies to their advantage in fraud prosecutions and lawsuits.

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Art Levine, a contributing editor of The Washington Monthly, has written for Mother Jones, The American Prospect, The New Republic, The Atlantic, Slate​.com, Salon​.com and numerous other publications.
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