View Full Version : Misc The top five criticisms of the Finance reform bill -- from the left.

09-17-2009, 02:24 PM
Ezra Klein, for the win.


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.

By Ezra Klein | September 16, 2009; 6:58 PM ET