On The Baucus Plan, Missing The Forest For The Trees

When Democrats talk about health care reform privately, or at wonky National Journal breakfast sessions, they riff on fundamental changes to the "delivery system," which is a wonky way of talking about the interactions between patients, doctors, insurers, hospitals and the government. The preferred Republican approach -- the one reflected in virtually every health care proposal that GOPers have introduced to the public over the past two decades -- is to change incentives for consumers of health care. In Democratic proposals, the emphasis is always on changes to the incentives that providers -- hospitals and doctors -- currently play with.  If there's an subrosa intellectual argument, this is it. 

But Democratic politicians, being afraid to mollycoddle, are talking these days about externalities of reform -- how much it'll cost, who's going to foot the bill. Yesterday, Democratic critics of Baucus's bill seemed to forget the moral argument they've been urging that the president make -- and seemed to abandon a dozen years of fighting against knee-jerk superficiality. Baucus himself is partly to blame. He's dismissed voices to his left, often to the point of arrogance. His motivation for getting a bipartisan bill passed seemed to be less about reform the health care system than about getting his friends on the other side of the aisle to like him. Instead of reacting to what the bill does, many Democrats reacted to the guy who wrote it, and used the release of the bill as a chance to vent against Baucus.  Next week, the bill will be revised during a mark-up. The free-rider provision will almost certainly be killed and replaced a version of the employer mandate that is closer to the HELP committee's and the House TRICOM's version. Almost certainly, the subsidy level will be raised -- Sen. Ron Wyden will insist on it. On a sliding scale of subsidies, the target level is somewhere in between what the House envisions and what Baucus proposes -- although nowhere near the level of subsidies that Massachusetts currently provides -- which, to extend a long sentence, means that the basic level of services that the exchange plans offer won't be as generous as Massachusetts's. By the way: there's a somewhat hidden feature of the Baucus plan that might form the basis for a compromise over the public option: in 2017, Baucus would allow virtually any business to buy insurance from the exchange. For complicated reasons, this could have virtually the same effect on bargaining power and competition as a phased-in public option, although Democrats might want to amend the bill to open the exchange a little bit earlier.