A health-care proposal by Senate Finance Committee Chairman Max
Baucus would impose a $6 billion annual fee on health insurers,
according to a summary of the proposal.
Baucus, D-Mont., discussed his proposal Tuesday with a
bipartisan group of six members of the Senate Finance Committee who
have been seeking a compromise on health-care legislation for
months. The fee on insurers is just one of several provisions that
would help defray the costs of expanded health coverage in a
summary of Baucus' plan that was circulated Tuesday.
The $6 billion fee on insurers "would be allocated by market
share" and would begin in 2010, according to the summary. Insurers
would also be affected by an excise tax on high-cost
health-insurance plans, which would put a 35% tax on premiums for
plans above $8,000 for singles and $21,000 for family plans
provided by employers.
The tax would not apply to the entire premiums of the high-cost
plan, but "the amount of premium in excess of the threshold,"
according to the summary.
The proposal represents a major step forward for Baucus, who has
slogged through long, closed-door meetings on health-care
legislation while the Senate Health, Education, Labor and Pensions
Committee approved its own bill and a trio of House committees also
approved bills. Unlike the other committees' bills, Baucus'
"framework for consideration" does not include a public
health-insurance option, but would instead allow the creation of
state health-insurance cooperatives.
After the meeting Tuesday with the "Group of Six," Baucus said
the insurance proposal is "very important," and he cited a recent
analysis by a financial firm that he said showed that fee "would be
very hard to pass on to consumers."
Baucus told reporters that he wants to see comments on his
proposal from the other members of the group by Wednesday
He said he is working to reach agreement within the group by the
time President Barack Obama addresses Congress in a joint session
Wednesday night, but indicated that the negotiations would continue
even if they did not reach agreement.
"I'm just hopeful that when the president gives his statement
tomorrow night, that that's going to help move the ball forward,
and very expeditiously," Baucus said. "The rubber is starting to
hit the road here."
Sen. Olympia Snowe, R-Maine, who is a key figure in the
negotiations because she is viewed as a possible partner with
Democrats on a compromise bill, said an agreement by Wednesday is
an "overly ambitious goal," however.
Snowe stopped short of endorsing Baucus' proposal, telling
reporters that she had concerns about several issues. She
specifically expressed concern about growing financial burdens on
states as a result of the plan's proposed Medicare expansion, and
she also said she would seek language related to medical
Snowe has pushed a "trigger" option for a public
health-insurance option that would allow such plans to be
established if insurers did not offer affordable insurance in local
geographic areas. But Snowe indicated that the trigger provision
would not be part of any agreement reached by the Finance Committee
"We have not had the trigger mechanism on the table in our
discussions," Snowe said. "I think that'll come at a later point in
Robert Zirkelbach, a spokesman for the America's Health
Insurance Plans, or AHIP, trade group, said in a statement that the
insurance fee proposals "will only make it harder for families and
small business to afford coverage." Members of AHIP include Aetna
Inc. (AET), Humana Inc. (HUM), Cigna Corp. (CI) and UnitedHealth
Group Inc. (UNH).
"The American people want reform that eases the burden of rising
medical costs and puts our health-care system on a sustainable and
fiscally responsible path - not new taxes on health insurance,"
Other "pay-for" provisions in the plan include a $2.3 billion
annual fee on pharmaceutical companies, a $4 billion annual fee on
medical device makers and a $750 million annual fee on clinical
laboratory companies - all of which would begin in 2010.
A proposal from Baucus has been eagerly anticipated on Capitol
Hill, since a bipartisan compromise in the Senate Finance Committee
could help pave the way for passage of a bill in the Senate.
But key Republicans in Baucus' bipartisan negotiating group,
including Sens. Charles Grassley, R-Iowa, and Mike Enzi, R-Wyo.,
have appeared less optimistic in recent weeks about the prospects
for a deal.
Baucus' proposal also requires all Americans to purchase health
insurance, with penalties for failure to comply ranging from
$750-$950 per uninsured individual.
But it provides refundable tax credits for individuals and
families with income up to 300% of the poverty level to cover a
portion of insurance premium costs.
Unlike legislation moving through the House of Representatives,
the Baucus proposal would not require employers to offer
health-insurance coverage. But large employers - those with more
than 50 full-time employees - would pay a fee for each employee who
received tax credit subsidies to buy health insurance. That fee
would be capped at $400 times the total number of employees in the
- By Patrick Yoest, Dow Jones Newswires; 202-862-3554;
(Martin Vaughan contributed to this report)