Early accounts of Senator Max Baucus's press-only speech at the national press club are chilling. The Democratic Senate Finance Committee Chairman not only said he was shelving the president's plan for a public option to the private health insurance market, but he also hinted at superceding state patients' rights laws that guarantee benefits like cancer care, second opinions, a panel of independent doctors to overturn HMO denials and lawsuits against HMOs.
Congressional Quarterly reports these snippets:
Sen. Max Baucus, D-Mont., said Friday that while he has not written off the idea of a government-run insurance plan for his health care overhaul proposal, it probably won’t be his first line of attack, preferring to focus instead on the system for self-insured companies.
At a breakfast with reporters hosted by the journal Health Affairs, Baucus laid out details of his health care overhaul plans, many of which he will share in greater depth in a closed-door session April 29 with Finance Committee members.
While a government-run insurance plan was still on the table, Baucus said “it might be a bit on the side of the table.” Instead, he said, he would focus on preserving the insurance system for self-insured companies while expanding private insurance and public programs such as Medicaid, the insurance program for the poor. “We’ll end up with more private insurance and more public insurance,” he said.
He later backed off that statement slightly, saying he might return to the government-run idea later on. Baucus has previously backed the idea of a government-run plan to compete with private insurers and drive down costs, but the political difficulty of the idea has put pressure on him to drop it. Many Republicans vehemently oppose any idea of a government-run insurance plan, while many of the left are demanding its inclusion.
For many uninsured looking to buy coverage, Baucus would like to “set up a system similar to Massachusetts,” where people can buy insurance through a “connector” that offers standard minimum benefit plans with subsidies for those who cannot afford it.
It would be a national marketplace, Baucus said, or at least with a common national standard. “I think the whole system should be more national, and the benefits have to be more national. You can’t have benefits be one level in one state, and another level in other states.”
But he would try to make sure that it did not deeply impact companies that buy insurance already. Health care experts have theorized that any large change to the insurance market, especially with a government-run plan option, would result in some companies and people shifting from company-provided insurance to the independent or government market.
“The system I envision is where self-insured companies, ERISA companies, can keep their own plans and manage health insurance in the way that they have. We’re not going to change the ways self-insured companies handle health care for employees,” Baucus said.
Many large companies are self-insured. Instead of buying coverage directly from a health insurer, they take on the risk themselves and pay an insurer to administer the plan. To the employee, there is little difference, but the company can lower costs by taking on the risk itself. Companies that self-insure are governed by the Employee Retirement Income Security Act (PL 93-406), better known as ERISA.
Baucus, the third biggest recipient of health insurance and drug company money on the Hill, supports the notion of forcing every American to buy a health insurance policy if their employer or government didn't pay for one for them, now he seems to be clarifying that would be a private HMO policy, and one that isn't even subject to the tough benefit requirements built up in many states over the last decade. Employees in big companies would not have the ability to join a public plan, either, assuming one is developed some day, to have enough leverage to compete with the private market and drive down their costs, or to have enough bulk to get better deals from drug companies.
It sure looks like Baucus just threw in the towel to the HMOs and drug companies. The debate on the Hill is turning to the worst type of consensus, lowest common denominator reform that won't give the public the sweeping change it voted for and will leave HMOs and drug companies in charge and unaccountable.
In fact, under national standards of ERISA law, patients cannot sue HMOs when denied lifesaving treatment. Now Senator Baucus wants to force every American to buy a policy governed by national law. It's very likely he'll also want those policies to be exempted from state lawsuits when HMOs refuse to pay for life-saving treatment. During the 1990s Democrats like Senator Kennedy unsuccessfully fought to end federal ERISA premption of state lawsuits to hold HMOs accountable. I am starting to feel Baucus is going the other way -- pushing more patients into these plans. Individuals who buy their own policies today have state law protections, including the right to sue their HMOs over coverage denials.
It's time for the White House to step in and put down the president's demands, the ones he campaigned for -- like a public option and no mandatory purchases. The people of Montana probably won't like the way their senator is caving to the HMOs and drug companies. There is time to change his mind, but only if the president speaks up soon.