Baucus has released an outline of what is likely to be in the bill, which would require individuals to purchase insurance but would not include an employer mandate to provide coverage.
 
“There’s much to be encouraged about with the framework that Sen. Baucus has laid out,” said Paul Dennett, senior vice president for health care reform at the American Benefits Council in Washington.

Under the committee’s proposal, people who fail to buy coverage would be penalized, but low-income individuals would be given tax credits to buy insurance on a national exchange. Companies employing more than 50 people that do not offer health care would have to pay as much as $400 per employee who receives the tax credits. The mechanism is called a “free-rider” provision.

If a company provides health care, a worker is not eligible to buy insurance on the exchange unless the employer’s plan costs more than 13 percent of the employee’s income.
 
The four other health care bills floating around Capitol Hill—three in the House and one in the Senate—all have employer mandates.

Under the House bills, for instance, a company would have to offer a plan that meets federal requirements or pay an 8 percent payroll tax to fund an insurance exchange. In addition, companies would have to contribute 65 percent of premium costs and their plans would be subject to regulatory review to determine whether they meet federal standards.

The Senate Finance bill isn’t prescriptive when it comes to the employer obligations, according to Dennett.

“It doesn’t attempt to micromanage the benefit the employer must provide,” he said.

Unlike the House bill, the Senate Finance measure does not have a provision allowing states to set up their own single-payer systems, which would require that benefits be delivered through that mechanism. Such an arrangement would undermine federal regulation of self-insured plans and potentially prevent companies from offering uniform benefits to workers in multiple locations.

“That’s very important to large employers,” Dennett said.

But there are big companies that oppose some of the ideas that are likely to be part of the Senate Finance bill. Wal-Mart backs an employer mandate rather than the free-rider policy.

“An employer mandate fairly distributed is a more appropriate way to have shared responsibility,” said Leslie Dach, Wal-Mart executive vice president of corporate affairs and government relations, at a September 9 forum sponsored by the Bipartisan Policy Center and Better Health Care Together at the Newseum in Washington.

Dach said the free-rider approach “has some inherent difficulties,” such as discouraging companies from hiring low-income individuals. But most business groups argue that an employer mandate would raise costs and could cause companies to drop their health care plans.

Business and labor have concerns about one of the funding mechanisms for the Senate Finance plan. It calls for an excise tax of 35 percent on insurance companies for any plan above $8,000 for individuals and $21,000 for families.

Annie Hill, executive vice president of the Communications Workers of America, says the idea is too complicated. “What is a Cadillac plan? Who decides that?” she asked at the Newseum forum.

Organized labor also is a strong proponent of a government-run insurance option being part of the national exchange. The Senate Finance Committee outline doesn’t include the so-called public option. Rather, it calls for nonprofit co-ops to be the alternative to private insurance.

Andy Stern, president of the Service Employees International Union, dismissed the notion that co-ops could compete with the private market.

“It’s a wonderful idea,” he told the Newseum audience. “It’s just not going to work.”

In his September 9 address to a joint session of Congress, Obama included many parts of the Senate Finance Committee outline in the plan he presented. He also included ideas that have been in each of the legislative proposals, such as prohibiting health insurance exclusions for pre-existing conditions. Both Obama’s and the committee’s proposals are expected to cost about $900 billion.

Obama reiterated his support for a public option but indicated he’s open to other ideas on all aspects of his plan. He’s not wavering, though, in his demand that Congress approve a bill this year.

“Now is the season for action,” Obama said.

—Mark Schoeff Jr.

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