NCPA - National Center for Policy Analysis


September 17, 2009

Senate Finance Chairman Max Baucus (D-Mont.) finally unveiled his health care plan yesterday to a chorus of bipartisan jeers.  The reaction is surprising given that President Obama all but endorsed the outlines of the Baucus plan last week.  But the hoots are only going to grow louder as more people read what he's actually proposing, says the Wall Street Journal.

The headline is that Baucus dropped the unpopular "public option," but this is a political offering without much policy difference.  His plan remains a public option by other means, imposing vast new national insurance regulation, huge new subsidies to pay for the higher insurance costs this regulation will require and all financed by new taxes and penalties on businesses, individuals and health-care providers, says the Journal:   

  • The centerpiece of the Obama-Baucus plan is a decree that everyone purchase heavily regulated insurance policies or else pay a penalty.
  • This government mandate would require huge subsidies as well as brute force to get anywhere near the goal of universal coverage.
  • The inevitable result would be a vast increase in the government's share of U.S. health spending, forcing doctors, hospitals, insurance companies and other health providers to serve politics as well as or even over and above patients.

The plan essentially rewrites all insurance contracts, including those offered by businesses to their workers, explains the Journal:

  • Benefits and premiums must be tailored to federal specifications.
  • First-dollar coverage would be mandated for many services, and cost-sharing between businesses and employees would be sharply reduced, though this is one policy that might reduce health spending by giving consumers more skin in the game.
  • Nor would insurance be allowed to bear any relation to risk. Inevitably, costs would continue to climb.
  • Everyone would be forced to buy these government-approved policies, whether or not they suit their needs or budget; families would face tax penalties as high as $3,800 a year for not complying, singles $950.

As one resident of Massachusetts where Mitt Romney imposed an individual mandate in 2006 put it in a Journal story yesterday, this is like taxing the homeless for not buying a mansion.

Source: Editorial, "Public Option Lite; The Baucus plan would make insurance even more expensive," Wall Street Journal, September 17, 2009.

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