Among other things, the House deal, put together with heavy involvement by White House Chief of Staff Rahm Emanuel, would exempt more small businesses from a requirement to provide insurance to employees or pay a penalty. The deal would require that payments to health-care providers under a new public health plan not be pegged to Medicare, the health plan for the elderly. And it would also pare back the 10-year cost of the bill, estimated at roughly $1 trillion, by $100 billion. The cuts would be achieved in part by asking states to share in a planned expansion of Medicaid, which offers health insurance for the poor, and by requiring low-income people to pay higher premiums to purchase insurance. . . .
On the Senate side, Mr. Baucus is close to securing agreement with three top Finance Committee Republicans. The emerging Senate package would expand coverage by creating a network of nonprofit cooperatives that would compete with private insurers. That contrasts with the House bill, which would create a government-run public health plan. . . .
The deal cut by the Blue Dogs didn’t address rank-and-file Democratic concerns about a proposed surtax on wealthy households. The House legislation has included an extra tax on households making more than $350,000 a year, while Mr. Obama has suggested he would support a tax on those making more than $1 million to fund expanded health coverage.
The deal exempts more small businesses from the mandate to provide insurance to workers. The original House bill exempted businesses with annual payrolls below $250,000; the new deal would raise that threshold to $500,000.
Under the revised bill, companies with payrolls from $500,000 to $750,000 would face a penalty equivalent to 2% of payroll if they fail to offer insurance. Companies with payrolls above $750,000 would pay an 8% penalty.
After the changes, some 5.3 million employers would be exempt from the mandate, about 400,000 more than under the original House proposal, said the National Federation of Independent Business, a trade group representing small businesses.
So, setting aside the question we have been discussing of whether the government should take over health care, let’s just consider this proposal. Is this the health care reform that so many people have dreamed of? What will this one do, and what will it not do?
(Notice, for example, that the lawmakers are patting themselves on the back for cutting the price and thus saving taxpayers $100 billion. And they have done that in part by making the states pay for it. But the states have no money–maybe California can pay its share by issuing IOUs–and so such unfunded mandates still have to come from taxpayers!)
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