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Five Ways to Improve Max Baucus's Bill


There's a lot more to say about the provisions in Baucus's bill, and perhaps I'll continue picking through the legislation tomorrow. But we basically covered the big-ticket items today. Max Baucus's bill is a very good platform with some very severe failings. The guts of the bill, the things people don't notice, are more fully fleshed out in this legislation than in the other bills I've seen. The exchanges, the risk adjustment, the delivery system reforms, the possibility of national insurance plans -- all that is fully realized in this bill. But the legislation has some serious, even crippling, flaws. Here are five ways to improve it:

1) Kill the "free rider" provision. Kill it now. The employer mandate in the HELP bill raises more money and hurts fewer people. If that's too onerous, then you can lower the penalties. But whatever you do, do not let this provision survive. It's one thing to see a policy spin off the rails because of unintended consequences. It's a whole other thing to build in a time bomb that will inflict completely foreseeable damage.

2) Increase the subsidies, and in particular, put more money toward out-of-pocket caps. The bill does a lot for the truly poor, and quite a bit for the nearly poor, but it doesn't do enough to protect working families from the costs of illness. This costs money, of course. But that's money you can get from implementing fail-safe policies like those advocated by David Cutler and Judy Feder. And it's money that will prevent a massive backlash when struggling, sympathetic families are told they have to buy insurance they can't really afford to use.

3) Phase in Ron Wyden's Free Choice amendment. This has three effects. The first is that it makes the bill better for the currently insured, as it gives them a clear benefit: the freedom to change their health-care coverage if they don't like it. Second, the Lewin Group estimates that it raises more than $300 billion over 10 years, as workers choose more affordable plans and the government loses less tax revenue through the employer tax deduction. Third, it makes the system better by building out the alternative to the employer-based system. What's not to love?

Speaking of the Health Insurance Exchanges, the Baucus plan deserves plaudits for opening the exchanges to businesses of all sizes. But it takes too long to do so. Rather than starting the five-year process in 2017, either shorten the process to three years or start the process in 2015.

4) Create real competition in the insurance industry. Baucus's plan doesn't include a public option, doesn't include a public option trigger, and even neuters the co-op option. I'm among the few who think there's a real possibility that the new regulations will lead to a much more efficient and humane private insurance industry, but it is, after all, only a possibility. It's much likelier to happen, however, if they're protecting themselves against real competition in the market. And if it doesn't happen even in that scenario, then at last people will actually have somewhere to go.

5) Create incentives for bipartisanship. This bill was built amid a long, bipartisan promise. Baucus made real concessions to attract votes from his Republican colleagues. He made the bill cheaper, and eliminated the public option, and strengthened the protections against federal funding of abortions and benefits for illegal immigrants, and built in hard funding mechanisms that actually improve the deficit. Everything Republicans originally wanted is in this bill. It is, in fact, a moderate Republican bill. It looks like nothing so much as the bill Republican Senator John Chafee Sr. proposed in 1994.

At this time, Baucus has no Republican votes for his legislation. Olympia Snowe is a maybe, and Enzi and Grassley are pretty certain to vote against it. Conceding so much in return for so little isn't just bad politics -- it's bad precedent. Why should Republicans sign onto Baucus's proposals in the future if they can simply adjust the bill to their liking and then withhold their support at the end?

If Baucus's Republican colleagues want to support this bill and give him some cover, their presence should be welcomed. But if not, Baucus should loudly and publicly allow the Democrats on his committee to strengthen the bill, as it will be a Democratic majority that passes the bill. A bipartisan group should shape a bipartisan bill. But a bipartisan group should not get to shape a partisan bill, particularly if that bill becomes partisan because they have abandoned it.

In 2001, Baucus helped shape the president's tax cuts, and he voted for them. In 2003, he helped shape the Medicare Modernization Act, and he voted for it. He has upheld his end of the bargain of bipartisanship. Now is his moment to demand the same of his Republican colleagues.

Photo credit: By Harry Hamburg – Associated Press

By Ezra Klein  |  September 16, 2009; 6:58 PM ET
Categories:  Health Reform  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: The Baucus Bill: Taxing Insurers
Next: Morning Meetinging


But if it were to become partisan bill, will it pass WHOLE via 'reconciliation process'? If it is 'reconciliation process' will this bill not need to split?

For a lay man what is happening is this Baucus bill is 'light Republican'. To get more or all Dems, it needs to move to Left. But even this starting position is not attracting any Red votes; how would any movement to Left bring additional votes?

So in short, what 'execution strategy - getting the bill passed in Senate' are we talking for this particular bill?

All said and done, prima fascia it seems this is the bill which is 'top dog'. It is inconceivable any other bill getting passage in Senate. Problems here mean do we see reform stuck?

Posted by: umesh409 | September 16, 2009 7:44 PM | Report abuse

Cute post, but a little unrealistic-- neither #2 (Cutler/Feder) nor #3 have a political chance. If you're suggesting these add-ons, why not just merely suggest switching to Wyden-Bennett altogether? They both have mostly the same likelihood.

One interesting thing will be if Republicans look for a couple of ways to kill reform via the Baucus plan. Here are two ways to kill the Baucus plan:

-- Given Conrad's opening of the door to a 20 year view, and Baucus' Exchange design, how about a CBO estimate on the number of people in the Exchange over that 20 year period?

-- Same 20 year period-- how much revenue is raised via the excise tax? Multi-trillion is the answer here.

Posted by: wisewon | September 16, 2009 7:47 PM | Report abuse

"Create incentives for bipartisanship."

Hahahahahahahahahahahahahahahahahahaha. Funny, Ezra.

"Everything Republicans originally wanted is in this bill. It is, in fact, a moderate Republican bill."

That's because Baucus is a moderate Republican, if you're using the standards set by John Chafee. See if you can put in a call to Lincoln about that one.

What Republicans want out of the bill, one presumes, is something that burdens Democratic-leaning voters with healthcare costs without providing visible benefits, in order to create a 2010 backlash. It's a toss-up between a Kristol-approved defeat or shepherding a poison chalice of a bill into law without leaving their fingerprints on it.

Posted by: pseudonymousinnc | September 16, 2009 8:04 PM | Report abuse

I would really like an answer to these two questions.

Why can’t people purchase high deductible insurance plans or self-insure in any of these plans? Why are some of you so ready to give up your freedom to choose the insurance you want or no insurance at all?

The evidence that high deductible plans reduce spending without compromising healthcare is easy to find, yet no Democrat supports high deductible plans, why not?

Consumer Driven Health Care Plans

Posted by: kingstu01 | September 16, 2009 8:35 PM | Report abuse

Let me add one more. If I am reading the bill right, the subsidies for families between 100 percent and 300 percent of FPL are for a high deductible plan, with an additional subsidy towards cost sharing. Even with the cost sharing subsidy this is likely to discourage necessary and appropriate care, while increasing the administrative costs for all parties involved. This ranks with the free-rider penalty on the list of very bad ideas.

Posted by: kjacobs9 | September 16, 2009 9:31 PM | Report abuse

How about a post commenting on Marcy Wheeler's (probably accurate) contention that WalMart could and will offer a really, really crappy employer-based insurance plan that incentivizes WalMart employees to sign up for Medicaid. WalMart strictly controls the hours worked by their employees and managment could easily reduce work hours so almost all Walmart employees could qualify for Medicaid because they earned too little to be forced into whatever plan the employer offers.

The high use of Medicaid by WalMart employees was the issue that pushed Maryland to enact the Big Box Medical payments law (which was later overturned on ERISSA grounds by Reagan/Bush judges). WalMart had the standard operating procedure to push their workers onto the public dole. Max's bad bill gives them a way to whipsaw the employees -- give the employee lots of hours and then the employee is forced to buy crappy WalMart employer provided insurance at high cost, or reduce the employee hours and put the health care costs onto you and me and the other taxpayers.

So, how about a big post on how WalMart can game the system and rape the taxpayer?

Marcy's blog post is here:

Posted by: grooft | September 16, 2009 9:32 PM | Report abuse

You offer some good ideas here, Ezra, but I'm with Pseudonymous: the entire GOP, including your sainted Snowe, want their committees chairs back, their power restored; and the best way to do that (as of now) is to tar the Dems with legislation that falls between stools.

"He has upheld his end of the bargain of bipartisanship. Now is his moment to demand the same of his Republican colleagues." Oh dear, the twentysomething naivete on display.I'm not sure you grasp the motivations of so-called moderates like Snowe and Collins in the Senate or Castle and Kirk in the House. This is their one chance to roar back into power. They are Republicans first and Americans a distant second.

Posted by: scarlota | September 16, 2009 9:37 PM | Report abuse

I read the post and dont quibble with the first two points. But I see after a healthy day of tepidly but honestly eviscerating this sham, you have returned to deference and cheerleading - arguing in the teeth of your previous commentary.

But to the money quote: "Create incentives for bipartisanship..." And it is there where I bid your equivocations adieu.

First, it was a need for co-ops then triggers, then reducing the size of the bill...and zero votes later. Stop it.

I read the rest of the graph and I get your point, but the fact that you persist is indicative. And does the post pay per mention of bipartisanship. I know of no other rag that vacuously invokes this meaningless term at every stop.

Posted by: dside | September 16, 2009 10:09 PM | Report abuse

Scarlota, where are you getting support for the implication that Ezra idolizes or unduly praises Snowe? In the posts that I've read he's pointed out that she has inordinate power in this process as perhaps one of only two Republicans who stand even an outside chance of voting for healthcare reform. He's also said that because of their unique position, Snowe and Collins will probably be able to extract whatever concessions they want from the Democrats. That's not undue deference, that's just politics.

As for the bipartisanship bit, I don't think Ezra explained it very well, but I think what he was intending there was that he hold his previous moderate-ness over his Republican colleague's heads along with the threat of throwing the whole bill over to the more liberal members of his caucus. He's worked with them in the past to pass moderate legislation, so if they want to avoid him letting the lefty members of the Senate take a crack at the bill they need to commit to voting on his more moderate proposal. I don't think that's naivete on Ezra's part. It would be naive without the threat, but I thought that was implied.

Posted by: MosBen | September 16, 2009 10:16 PM | Report abuse

kschluter9/16/2009 7:32:12 PM
Now that's "CHANGE"
Finally the Democratic party has found a way to herd all those un-insured together into one group and "fine" them!
Yup, looks like if you can't cough up the high cost of insurance, you'll be fined $750-1500 a year!
Now that'll help out all those nice folks....and after all, the Insurance giants who really need the money will finally have what they want, total control of our government and a monopoly on healthcare!
Great job....
Mr. Obama, can I have my donations back now?

Posted by: stinkydog1 | September 16, 2009 10:46 PM | Report abuse

I was a bit surprised by some of the balance and credibility that Ezra gave to the Baucus Bill, but thanks for the very intelligent commentary. There may be something that can be done with "the guts" of the Baucus legislation, if several of Klein's suggestions are followed. I was inclined to reject the legislation out of hand, but Klein points out there are several ways of improving it to make it palatable, especially as bills are merged in Conference.

Posted by: Jeff-for-progress | September 17, 2009 12:06 AM | Report abuse


Disaster, not really budget "neutral."

Wrong Time - Smells and feels like a lie.

Not ready for this plan, incomplete, risky.

Government can't force this on us.
Doctors will retire. No Doctors, no health care.

This is completely unworkable.

"very severe failings?" No, worse! by several magnitudes of PAIN!

Wrongly directed.

Wanting is strong, planning is weak!

Desire is strong, implementation is chaos.

Trusting the Government with your health is like playing Russian Roulette with a revolver!

Government officials do things for themselves, not you! Is all about them!

It cost you more than you can earn just to have Baacus and a couple other officials play with this issue! Are you wealthy?

What else would you like your Government destroy or wreck for you?

Big Show, More big propaganda!

If Obama's speeches on health care was as "Good as Gold" we would greatly have restored Fort Knox!

If we had just a little of what the Obama administration has spent and wasted, we could REPLACE Fort Knox several time over.

Talk and a Government official's claims, are just "TALK." They think it is cheap! WE KNOW IT NEVER IS... WE GET TO PAY DEARLY!

Posted by: USDefender | September 17, 2009 12:07 AM | Report abuse

Trusting USDefender is like playing Russian Roulette with a Ketchup Bottle -- you probably won't die, but you will end up covered in ketchup.

kingstu01: once you come up with an example of catastrophic + PAYG working in the developed world, on a large, diversified population, then you can be taken seriously. Until then, you're just engaged in abstract glibertarian self-tickling. (I appreciate that Randroids believe that they are immune to all physical frailties, but that's really just a conceit.)

Posted by: pseudonymousinnc | September 17, 2009 12:25 AM | Report abuse

Here are 5 ways to improve the bill:

1) Hit a Republican in the mouth with a baseball bat so that he or she cannot parrot the Faux News propaganda;

2) Invite a Republican legislator onto the floor of the House or Senate and while CSPAN cameras are rolling, yell "GO F@CK YOURSELF" knock down said legislator and self induce on him thanking him for 8 years of NOTHING and being a part of the party of NO!"

3) Kick a Republican in the balls,if you can find them;

4) Pretend to be from Ohio and get an invite to John Boehner's office. Take a dump on his desk after a night of hot Indian curry and lentils;

5) Quit being a wimp. Arm yourself to the teeth and start threatening Republitards with Firearms. What's good for the goose is good for the gander. They've declared war on right thinking, educated citizens, so let's give them the war they want.

Posted by: VeloStrummer | September 17, 2009 1:53 AM | Report abuse

You still don't get it do you.

Baucus doesn't give a whit about bipartisanship.

He doesn't work for you and me, he works for the Insurance Industry.

Posted by: cautious | September 17, 2009 2:43 AM | Report abuse

"Why should Republicans sign onto Baucus's proposals in the future if they can simply adjust the bill to their liking and then withhold their support at the end?"

The Republicans have become accustomed to working this way and the Democrats rarely, if ever, disappoint. I can't imagine what incentives you think would be attractive to Republicans. Their goal is not health care reform, but destroying a presidency. What could the Democrats possibly offer that would attract votes from the Right Wing lunatics who now fill Republican senate seats...apart from allowing the GOP to write all of the legislation?

In the end, it would be better to junk this bill altogether. Baucus deserves no credit for what he's done. If there are good ideas in this plan, let them be incorporated into a new bill -- one untainted by the stench of Baucus and his corrupt corporate funding.

Posted by: treadlightly | September 17, 2009 5:03 AM | Report abuse

What in the world is this obsession with Republicans?? They are out of power and cannot control the destiny of this bill.
"Progressives" have been chasing the car for years, and have now caught it. So do something with it.

The only logical explanation is the deep seated fear among many that all of this health care reform --- whether it be Baucus or Pelosi or whoever --- is not going to deliver the paradise the President promises. And so they'll all be thrown out of the driver's seat, only to be chasing that car for another ten or fifteen years.

You folks better figure out how to stand by some principles, and lose your obsession with an out of power party, lacking a leader. Every time one of you posts a diatribe, or gets in front of a camera complaining about a lack of "bipartisanship," it makes you look that much weaker, and unqualified to lead.

Posted by: Curmudgeon10 | September 17, 2009 6:02 AM | Report abuse

Regarding gaming the system, apparently Massachusetts has discovered that 40% of new enrollees stay insured for <5 months at a time and incur expenses equal to four times their premium payment during that time.

Posted by: bmull | September 17, 2009 6:07 AM | Report abuse

1) Require the staff of all Senators to be removed from coverage under FEHBP and put on Medicaid.
2) Require all Senators to be removed from coverage under FEHBP and be put on Medicare.
3) Require the President and all other government employees to be removed from FEHBP and forced to buy coverage through the Exchange.
4) Require all residents of North Dakota and Montana to purchase Health Care through the new dysfunctional Co-Ops.
5) Require all the residents of Maine to move to North Dakota.

Posted by: cautious | September 17, 2009 6:36 AM | Report abuse

Max Baucus has accepted millions from the health insurance industry and this bill is rotten to the core as a result. If you would like to protest corruption in Washington please join our voting bloc here:

Posted by: letsgobuffalo | September 17, 2009 9:11 AM | Report abuse

"Everything Republicans originally wanted is in this bill."

A Glenn Greenwald-style post with a bunch of quotes from various Republicans about what they want to see would be very welcome (to demonstrate how far Baucus moved, and how moving the target has really been).

Posted by: AronB | September 17, 2009 9:25 AM | Report abuse

I went to the site on consumer driven health plans that kingstu01 referenced and it makes for interesting reading--good back and forth in the comments section from people who sound like they know what they are talking about.

But there also seemed to be agreement that health savings account/high deductible plans are chosen principally by younger workers who are light users of the healthcare system.

At 61, with about 4 orthopedic surgeries behind me, an HSA/high deductible is not an attractive option.

As for self-insuring--that's a wonderful concept if you've just won MegaMillions or Powerball. Not so good if being treated for cancer would wipe out your life's savings.

Posted by: jhpurdy | September 17, 2009 9:31 AM | Report abuse

"In 2001, Baucus helped shape the president's tax cuts, and he voted for them. In 2003, he helped shape the Medicare Modernization Act, and he voted for it. He has upheld his end of the bargain of bipartisanship. Now is his moment to demand the same of his Republican colleagues."

he does not expect a quid pro quo - he is one of them in all but party label

Posted by: jamesoneill | September 17, 2009 9:47 AM | Report abuse

I'm more of a conservative than a Republican, but there is almost nothing I actually like about this bill. I'm not sure why Republicans should support a bill just because it is less odious than the House bills.

Posted by: DavidBerkian | September 17, 2009 9:48 AM | Report abuse

None of your changes fix the fact that the Baucus plan does little about medical bankruptcy. Is there a #6 that can address this?

"To get more or all Dems, it needs to move to Left. But even this starting position is not attracting any Red votes; how would any movement to Left bring additional votes?"

So far, we've thrown a lot of carrots, it's about time to pull out the stick.

Posted by: adamiani | September 17, 2009 10:54 AM | Report abuse


The only way catastrophic insurance plus self-pay makes sense is as part of a broken non-system of delivering healthcare where younger, healthier people can choose to roll the dice and gamble on low out-of-pocket costs instead of paying through the nose for more traditional policies.

The reason kingstu01 posts and runs every single time is that he can't back up his abstract belief, drawn from his libertarian ideology, that paying cash for one's healthcare in a deregulated marketplace would be anything other than an embrace of third-world healthcare.

Posted by: pseudonymousinnc | September 17, 2009 12:32 PM | Report abuse

Several of the commenters above get to the heart of the matter. So here it is in direct language. Compulsory comprehensive health insurance is medical fascism.

Those who self-insure for everyday expenses and wish to buy only high-deductable catastrophic care have the economics right.

Everyone one has ordinary medical expenses -- getting a form signed for school or a sports team, etc. Individuals who enjoy basic good health and adopt a healthy life-style will have very few additional medical expenses in the typical year.

Everyday expenses are manageable via self-insurance for all but the poorest. And there is no insurable risk to spread as everyone is faced with the same manageable expenses more or less. Purchasing insurance where there is no insurable risk simply adds a layer of administrative costs and profits that provide no benefits.

It is the catastrophic costs that bankrupt families. And there is far more need for high-tech, hospital-based medicine for catastrophes. And catastrophes are not just expsneive but (unlike everyday expenses) rare. Thus here there IS an insurable risk, but only at the point where the costs go beyond what self-insurance can bear.

Comprehensive health insurance is a very bad idea that serves only the insurance companies and big Pharma. It makes cost control impossible.

Forcing people to buy something they not only do not need but actually detest -- that forces everyone to buy controversial, often deadly, and generally unneccesary treatments that many citizens reject on grounds of life-style, is medical fascism.

Posted by: ljwaks | September 18, 2009 11:32 AM | Report abuse

"Second, the Lewin Group estimates that it raises more than $300 billion over 10 years"

The Lewin Group is an Insurance Industry Funded "research" group. How about some truly neutral sources?

Posted by: Joshp365 | September 20, 2009 12:03 PM | Report abuse

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