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How Baucus Would Make Health Care More Affordable

How can Obamacare make insurance more affordable for Americans, given the current state of the reform bill? One approach--supported by many progressives--is to raise the insurance subsidies provided to lower-income families. The other is to shrink the benefits package that insurance companies are required to provide. In a conference call organized this afternoon by Families USA, Senate Finance Committee chair Max Baucus explained exactly what the latter might look like.

Baucus said that one way to improve affordability would be to reduce the “minimum creditable coverage provision”—basically, what percentage of health care costs that insurance companies would be required to cover. One coverage category (classified as “bronze” under the Baucus bill) was set at 65% in the Senate HELP bill, which Baucus said could be reduced to 60% in conference to match the levels in the Finance Committee. Baucus hadn’t indicated that the Democrats’ conference-committee had come to a final agreement on the issue, but the attention he paid to detailing this option seemed to make his preference clear. While the Finance chairman did note in passing that “higher subsidies” were one way to address the coverage issue, he didn’t bother to elaborate, adding only that “we don’t want to go much over $900 billion over ten years.”

Interestingly, the idea of reducing coverage to improve affordability was exactly what Olympia Snowe proposed after voting to support the Finance bill last week, as I described. Such a move would allow Democrats to avoid the political thicket of finding new money for subsidies--which would likely entail higher taxes, greater concessions from industry stakeholders, and other contentious proposals. But it would also mean that consumers themselves would be directly responsible for responsible for shouldering more of health care costs. And, as my colleague Jonathan pointed out yesterday, it’s important not to forget that part of the equation.