holes in the safety net

Jonathan Cohn wades into the Baucus framework [pdf] released today and notices that families making between 300% and 400% above the poverty line ($66,000 to $88,000 for a family of four) would get stuck with pretty hefty costs on the private market:

Imagine you’re the head of a family of four, with two adults, making an income of $70,000. And since you don’t get insurance from your employer, you have to buy it on your own. If Baucus had his way, you could buy coverage through the exchange. And you’d have to spend no more than 13 percent of your gross income–or around $9,000–on your insurance premiums. But your insurance wouldn’t cover everything. There’d be deductibles, co-payments, and so on. If you bought the minimum level plan, you’d be on the hook for as much as $12,000 in out-of-pocket expenses–a level you could hit pretty easily if you had a seirous illness or injury. Add it all up, and you could be paying as much as $21,000–a third of your income–on medical expenses.  I believe the appropriate reaction is “oy.”

Ezra Klein meanwhile, first summarizes and then tepidly endorses the proposed framework:

The early reaction to Baucus’s bill has been overly negative. It’s an imperfect improvement to the current system, but an improvement nevertheless. Where it really falls short — even in comparison to the rudimentary framework released by HELP and especially when compared to the more complete package offered by the House — is in imagining a system that is different and better and fairer than our own, and working to make it a reality. Baucus talks often of building a “uniquely American” system, but this proposal largely plugs some holes in the one we already have. As such, the failure is not so much in the bill as in its unwillingness to lay the groundwork for the bills that may need to succeed it.

I have only skimmed the Baucus proposal, so I’ll go off of Klein’s summary for now.  From what I can tell it offers up a few good reforms that really will help cover more of the uninsured, but does very little to contain costs or to make insurance more portable or costs more transparent.  It does almost nothing to untangle us from the status quo (one of the main reasons I like Wyden-Bennett as an alternative).  It doesn’t do enough to make health insurance national – not nationalized, but part of a national market – and while in 2015 insurance companies would be allowed to sell across state lines, they would only need to follow the regulations of the state where the “compact” is formed, something many people have worried will look similar to the credit card industry.  Even the exchanges set up under this plan would be state-by-state, which makes almost no sense at all.

The plan expands Medicaid, offers cost sharing and tax credits to low-income individuals and families, and establishes state health care co-ops that can band together to offer more competitive prices.

It’s not all bad, but there is plenty to be worried about – and I’ve only linked so far to liberals critiquing this plan.  I’ll read it over more carefully, but at the moment it looks pretty motley – short on imagination, not comprehensive, and quite possibly far, far more expensive than it’s worth.  Sure, the pricetag is only $900 billion rather than $1.1 trillion – but if it doesn’t do a good job, what’s the point?

Okay – more on this later.  For now, I’ve got mixed feelings, but mostly I feel very dubious.

Also – Reihan Salam breaks down the proposal very nicely – and isn’t too pleased.  In other words, what we’re likely to see is something very like this bill pass, because no policy types on the right or left like it at all.  The worst of all worlds!  And to think, Salam and Klein both like Wyden-Bennett!