Senator Baucus finally released his long awaited health care reform bill with zero bipartisan support. I've been looking through the bill and discovered something very interesting. Baucus has purposely written his bill to make sure adding a robust public option would not dramatically reduce the CBO score of his legislation (it would still save average Americans hundreds of billions). It would also make it harder to add a robust public option later in the process or eventually add a robust public option in the distant future using reconciliation.
In the Baucus bill, “The amount of the tax credits for exchange plans in each area of the country would be tied to the premium of the second-lowest-cost plan in the “silver” tier (the “reference plan”), which would have an actuarial value of 70 percent." That is very strange. The second-lowest-cost plan? Isn't the lowest-cost something usually the benchmark?
In all the House committee bills and the Senate HELP committee bill, the tax credits are calculated using the “reference premium”. The “reference premium” is the average of the three cheapest plans in each area for each plan tier.
Why does this matter? A robust public option would almost always be the lowest-cost plan offered. It would reduce the average for the “reference premium” and therefore reduce the government's cost of providing tax credits. A robust public option would dramatically reduce the government's cost of those bills. But the Baucus bill uses the “reference plan,” which is the second-lowest-cost plan. This means offering a dramatically cheaper robust public option would not substantially change the size of “reference plan” or the amount of tax credits the government would need to provide. Adding a robust public option to the Baucus' bill would not reduce the cost to the government by very much.
Very clever, Senator Baucus, not only do you not have a public option in your bill but you are making sure to salt the field to stop one from ever coming into being.
Conversely, if an amendment removed that one word "second" and added a robust public option like Senator Rockefeller's, it should reduce the cost of Baucus bill by over a hundred billion.