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Blue Dogs And Blue Cross, Sitting In A Tree

David Rogers at Politico has a terrific, highly disturbing piece on the concessions Energy and Commerce Chairman Henry Waxman made in order to win support from four Blue Dog congressmen--four votes he needs in order to get the bill out of committee. I've written that the concessions--slightly lower subsidies to help people buy insurance, along with less pricing power for the public plan--seemed modest, at least based on what's known so far. But Rogers has more details--and they are not exactly comforting:

The impact is real. For a family of four earning from $77,000 to $88,000, the new language from the House Energy and Commerce Committee could require an additional $770 a year--or three-quarters of Obama’s “Making Work Pay” tax credit. For those closer to the poverty line, such as a family of four earning $44,000 to $55,000, the relative impact would be even greater. 

Reducing the subsidies would help scale back the cost of the plan by almost $60 billion over 10 years — a major goal for the Blue Dogs. But Congressional Budget Office estimates show that most--if not all--of these savings are effectively given away by the same moderates under pressure from local hospitals and Blue Cross-Blue Shield plans to blunt the public plan option. 

The government-backed plans now would be required to negotiate prices with providers such as hospitals rather than to build on the existing, lower-cost Medicare payment system. CBO had predicted that a public option could provide coverage, on average, about 10 percent cheaper than private alternatives. But much of this savings would now be sacrificed, making it harder to compete against private plans such as Blue Cross-Blue Shield.