U.S. Chamber Concerned Over Baucus Health Care Reform Bill

 
The U.S. Chamber applauded a Senate Finance Committee health care reform bill introduced as "the best effort to date," but cautioned that the tax provisions included in the bill could "spiral out of control."

Sen. Max Baucus (D-MT) introduced the $856 billion "America's Healthy Future Act" on September 17 after months of delays and stalled bipartisan negotiations. In a statement released to the press, Chamber Executive Vice President for Government Affairs Bruce Josten thanked Baucus for his "inclusive efforts" and "good faith effort to address the concerns of the U.S. Chamber," particularly on the strongly-opposed government-run public insurance option. 

"We applaud the provisions in this bill that will lower health care costs, increase coverage, and improve the quality of care. These range from fairly regulating the insurance market to enacting tax parity for small businesses and the self employed," Josten said. "We strongly support allowing plans to be sold nationally and allowing individuals to purchase health insurance across state lines. This bill does not contain a government-run 'public option,' and the Congressional Budget Office has certified it as the first comprehensive health reform bill that will actually bend the cost curve and get health care costs under control."

However, Josten went on to note, "We have grave concerns over the vast array of new taxes contained in the bill. This bill creates a new tax on benefits that may well spiral out of control to become the next Alternative Minimum Tax. It taxes prescriptions, insurance policies, medical devices, clinics and labs' and all of these taxes will increase costs for employers and workers. Not to mention, the bill creates a massive new entitlement in the form of insurance credits that will burden taxpayers now and in the future. Overall, the bill still needs tremendous improvement."

The bill would, among other things,

• create an individual mandate for health insurance, with fees as high as $3,800 on families who don't get coverage; and provide tax credits to help low- and middle-income families purchase coverage;
• create nonprofit health care cooperatives;
• ban insurance companies from dropping policyholders who get sick;
• provide protections for those with preexisting conditions;
• ban insurance companies from imposing annual caps or lifetime limits on coverage; and
• create incentives for states to develop and test alternatives to the medical malpractice system.
   

The plan is financed by more than $500 billion in various spending reductions, including Medicare, and almost $350 billion in new taxes and fees. Insurers would be hit with $6 billion in new fees, with another $4 billion in fees for makers of medical devices. Smaller sums would come from drug makers and clinical laboratories. Insurers providing expensive "Cadillac" plans would be hit with a tax of 35% for plans valued over a certain threshold.