Senate Draft Ices Public Option

June 19th, 2009 | Sources: Washington Post

The Senate Finance Committee has circulated a draft health reform proposal that features an individual mandate, authorizes an expansion of Medicaid, and–hold the presses!–dumps the Big O’s pet project, a government-sponsored plan that would compete with Big Insurance.

FinanceCommittee'scoldshouldertoBigOThe draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.

One such provision cuts the number of middle-class folks that would qualify for tax credits designed to render insurance more affordable.

The Big O, HHS Secretary Kathleen Sebelius, and many House Democrats including Nancy Pelosi favor a public option to keep Big Insurance honest. Senate Democrats have been divided on the issue since Day 1.

In lieu of a public option, the draft proposes consumer-owned cooperatives similar in design to rural telecom and electricity providers. They would be “subject to government oversight and funded with federal seed money,” according to the Washington Post.

Meanwhile, House Democrats are divining ways to pay for the overhaul. They’re considering a Robin Hood tax on the rich, increased payroll taxes on employees, sin taxes on sugary drinks and alcohol, and a new value-added tax.

The House is also considering the Senate’s preferred approach to paying for reform, which is to tax health benefits received by Americans through their employers, as well as the Big O’s idea to limit itemized deductions for the rich.

A particularly controversial issue, according to the Post, is the extent to which employers must subsidize public coverage for employees if they don’t offer coverage to employees themselves.

People worry that if lawmakers don’t get this right, employees will flee to federal plans and send government costs through the roof.

The draft includes preliminary proposals for handling this nightmare.


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