Dealt Out Of The Game

As I mentioned yesterday, the rumors of the "bipartisan" health care deal coming down the pike in the Senate from Max Baucus and company looked like crap and smelled like crap. This morning, the NY Times confirms that it is indeed crap.

Mr. Baucus says his group will produce the bill that best meets Mr. Obama’s top priorities, broadly expanding coverage to the uninsured and curtailing the steep rise in health care spending over the long term, what policy makers call “bending the cost curve.”

Still, if the three Democrats and three Republicans can pull off a grand bargain, it will have to be more conservative than the measures proposed by the House or the left-leaning Senate health committee. And that could force Mr. Obama to choose between backing the bipartisan deal or rank-and-file Democrats who want a bill that more closely reflects their liberal ideals.

Already, the group of six has tossed aside the idea of a government-run insurance plan that would compete with private insurers, which the president supports but Republicans said was a deal-breaker.

Instead, they are proposing a network of private, nonprofit cooperatives.

They have also dismissed the House Democratic plan to pay for the bill’s roughly $1 trillion, 10-year cost partly with an income surtax on high earners.

The three Republicans have insisted that any new taxes come from within the health care arena. As one option, Democrats have proposed taxing high-end insurance plans with values exceeding $25,000.

The Senate group also seems prepared to drop a requirement, included in other versions of the legislation, that employers offer coverage to their workers. “We don’t mandate employer coverage,” Senator Olympia J. Snowe, Republican of Maine and one of the six, said Monday. Employers that do not offer coverage may instead have to pay the cost of any government subsidies for which their workers qualify. In the House, centrist Democrats have temporarily stalled the health care bill, many lawmakers want to see what Mr. Baucus’s group produces before voting on tax increases in the House bill.

Mr. Obama, in his news conference last week, praised the three Republicans in the Senate group — Michael B. Enzi of Wyoming, Charles E. Grassley of Iowa and Ms. Snowe. Mr. Grassley, the senior Republican on the Finance Committee, and Mr. Baucus share a history of deal-making, and group members said they share a sense of trust despite the partisan acrimony that pervades the Capitol.

Question: exactly what are the Democrats getting out of this bipartisan Republican health care plan deal, anyway? It amazes me that the definition of bipartisan for the last twenty years or so has been defined as "Democrats roll over and give the Republican Party 99% of what they want, then claim that 1% as victory."

No public option, the Republicans didn't want it. No surtax, the Republicans didn't want that, no employer mandate to offer coverage, but there's still the mandate you have to have coverage apparently, and your employer may or may not have to subsidize it if you're not offered coverage. Stop me if I'm wrong here, but what we'll end up doing under this plan is give the insurance companies 50 million new sources of premium revenue, force millions more to self insure at exorbitant rates through the "co-op" plans as more employers drop coverage completely choosing to subsidize employees just enough for minimal insurance plans rather than offer decent coverage, and basically end up seeing tens of millions of Americans more are underinsured, rather than uninsured.

There's zero incentive for the insurance companies to lower costs. This would be a flat-out gift to the insurance giants, to the tune of tens or hundreds of billions. They would offer high-deductible low-cost plans to fufill the co-op's affordability requirements, the same way we do with "just enough to be legal" auto insurance today. They'd have every reason to raise premiums on comprehensive plans, arguing that they have a right to stay in business too. It would still be profit motive driving the industry.

So many companies would then end their comprehensive coverage options in order to go with the cheaper co-op subsidies, it would be staggering. We'd have an all new disaster in just a few years, and huge insurance company profits to boot.

So again, I ask what the Democrats are getting out of this plan...other than looking like with 60 Senators that they've still been dealt out of the game again.

[UPDATE 8:03 AM] Nate Silver runs the numbers on the Baucus plan and surprise! It looks both familiar...and bad.

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.

Nate goes on to say that even with an individual mandate, there will be millions of people who will remain without coverage and accept whatever penalty is assesed them...because the penalty will be cheaper than the insurance, plus the subsidy for paying for the plan stops at 300% of the poverty line rather than 500% of the HELP plan, leaving a whole hell of a lot of people with no employer insurance (their employer dropped coverage), an expensive plan they have to buy to self-insure, and no subsidy to help them pay for it.

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