First reading of the latest Senate Finance Committee health care bill

Senate Finance Committee health care bill Sept. 16, 2009

Senate Finance Committee health care bill Sept. 16, 2009

Before I listen to the experts misrepresent the details of the latest health care plan from Congress, I read through the Senate Finance Committee health care bill released today.

There’s no public health care plan to compete with private for-profit insurance companies. There is a provision for setting up health care cooperatives. The bill prohibits denying coverage based on pre-existing conditions or dropping people when they need expensive care. The bill puts caps on the amount of money people will have to pay for health care each year. Everyone will be required to have health insurance. There’s a laundry list of tax credits to help people purchase health insurance on the open market. The bulk of the bill deals with modifications of Medicare, none of which I understand.

The biggest issue for me is the lack of a public insurance option. In principle, the co-op idea sounds good, but I can’t see how these small co-ops will be able to provide any real competition to drive down the cost of health care – supposedly the goal of health care reform. If everyone is required to have health insurance, the private health insurance industry will only get larger, and with the only competition these tiny co-ops, the cost of health care will not go down.

While there are a slew of tax credits to supposedly reduce the cost of health insurance, there appear to be some tax increases as well. Health savings accounts will now by taxed. “The additional tax on distribution from an HSA that are not used for qualified medical expenses is increased to 20 percent of the disbursed amount.”

Flexible spending arrangements under cafeteria plans will be capped. “[S]alary reductions by an employee for a taxable year for purposes of coverage under a Health FSA under a cafeteria plan are limited to $2,000.”

So it’s a mixed bag of tax credits, tax increases, changes to Medicare, the creation of health care co-ops and a requirement that everyone have health insurance. Now I’m going to see what the experts have to say about all this.

Read the entire bill.
Wall Street Journal coverage.
New York Times’ Prescription blog post about the Baucus bill.
Huffington Post’s Ryan Grim’s story about the Senate Finance bill.
Christian Science Monitor story about the bill.
The Guardian story.

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