Tuesday, October 13, 2009

The Baucus Bill Approaches

The Individual Mandate plan has passed through the Senate Finance Committee and is working its way to the floor. The bill would force millions of healthy Americans to purchase health insurance or face hefty fines.

The bill will also be expensive, but will be offset by taxes and reduced Medicare payments:
The $829 billion will be spent mainly in two ways. More than half will go to help lower-income people buy health insurance. Much of the rest—about $340 billion—will expand existing government programs that cover children and the really poor. In other words, the bill's costs are mainly associated with giving insurance to those who don't have it.
To pay for the bill, Baucus is looking in several places. He'll raise about $200 billion by taxing expensive insurance plans, and additional money by fining people who refuse to buy insurance. But the bulk of the money, more than $400 billion, will come from curbing government payments to hospitals and doctors who treat Medicare patients.
One key here is the $400 billion saved from reducing payments from Medicare. Medicare already pays a reduced rate, about 80% of what private insurers must pay. Care providers must either absorb the cost or pass it along to their privately insured customers. Guess which one they choose.
It got a major boost last week when Congress's number crunchers, said it would in fact lower the federal budget deficit by $81 billion over the next 10 years. The bill's overall cost is $829 billion, significantly lower than the other bills floating around Congress.
You know we're in trouble when our best plan is to follow Massachusett's example of forcing everyone to buy insurance while subsidizing those who can't. It's done nothing to control costs, the extra tax burden has hurt their economy, and doctors are over worked and underpaid, forcing some hospitals to close.

Come one guys, let's try a little harder.

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