WASHINGTON -- A new proposal by Sen. Max Baucus to fund healthcare reform through fees on insurance companies and to trim the cost of the legislation to under $900 billion may not be the final product of the secretive bipartisan talks members of the Senate Finance Committee have been conducting, a source close to the discussions told Salon Monday. And the plan would, despite earlier reports, include non-profit insurance co-ops designed to give private insurance companies some competition, though probably not as much as a government-run public insurance option would provide.
The New York Times reported Sunday night that Baucus was circulating a draft of a bill to the other five lawmakers he's been negotiating with -- Democrats Jeff Bingaman and Kent Conrad and Republicans Chuck Grassley, Mike Enzi and Olympia Snowe. The proposal would impose new fees on health insurance companies to cover the costs of subsidizing healthcare for low-income taxpayers, raising $6 billion a year starting next year. But it would also require those eligible for federal subsidies to pay more for their premiums and out-of-pocket costs than similar legislation that has passed two House committees. A family of four earning $88,200, or four times the poverty level, could still wind up having to pay more than $11,000 in insurance premiums under the proposal. The Times report said the proposal included no new competition for private insurance companies -- no co-ops, no public option. Progressive critics of the effort to forge a compromise with Republicans, even though the GOP has been resisting the reform proposal, immediately blasted it. "Max Baucus has wasted months while shining on everyone," said a post on FireDogLake. "And the administration has wasted months and its own credibility waiting for/using Max Baucus and the Gang of Six. They failed. End of story."
The source close to the discussions, though, says the proposal isn't finished, doesn't necessarily reflect Baucus's policy preferences and could change significantly this week, when lawmakers return to Washington and President Obama speaks to a joint session of Congress. The draft circulating was, apparently, designed to give the bipartisan Gang of Six a framework to continue their talks Tuesday. Baucus encouraged the six lawmakers to propose changes or offer replacements for some of the provisions in the draft.
The proposal does include several other insurance reforms that the House bills and another Senate bill also call for: banning insurance companies from denying coverage due to pre-existing conditions or dropping patients, expanding Medicaid slightly above the poverty level, tax credits to help lower- and middle-income families pay for insurance.
But the co-op plan is likely to draw more criticism as Congress drifts back into town. The plan appears to be an effort to assuage concerns by conservative Democrats and Republicans opposed to the public option. Conrad, of North Dakota, one of the Democrats involved in the talks, has been pushing the co-op idea for months. But Snowe, a Maine Republican, has indicated she might be open to an actual government-run public option, especially one that only takes effect if the insurance industry fails to meet certain conditions.
White House aides said Sunday morning that Obama's speech would call for a public option, but that he wouldn't threaten to veto a healthcare reform bill if it isn't included.