Senate Finance chairman proposes fee on insurance companies in post-recess health care plan

Senate chair proposes fee on insurance companies

WASHINGTON — Sen. Max Baucus on Monday pushed a new health care plan including an industry fee to help pay for covering the uninsured as President Barack Obama said insurance companies must share accountability for the troubled system.

The Finance Committee is the last best hope for a bipartisan bill since four of five congressional committees have produced partisan proposals. Baucus, D-Mont., has said he would move forward on his own if there’s no agreement by Sept. 15.

Meanwhile, Obama said in a Labor Day speech in Cincinnati that a health insurance system should work as well for all Americans as it does for the insurance industry.

“They should be free to make a profit. But they also have to be fair. They also have to be accountable,” the president said. “That’s what we’re talking about — security and stability for folks who have health insurance, help for those who don’t, coverage they need at a price they can afford, finally bringing costs under control — that’s the reform that’s needed.”

Baucus, who is chairman of the Finance panel, is part of a six-member bipartisan group trying to craft a bill satisfactory to both parties, and the group is set to meet Tuesday as Congress returns from its August recess and the president prepares for his prime-time speech on Wednesday.

It’s unclear whether the fee, designed to create competition in the insurance market, would win support of two key Republicans in the group: Chuck Grassley of Iowa and Mike Enzi of Wyoming. The Baucus proposal reflected many of their priorities, chief among them the decision not to include a government-run plan to compete with private insurers.

Democratic sources close to the negotiations, who were not authorized to be quoted by name, disclosed the fee and other details of the Baucus proposal. One source said the proposal included suggestions from all six members.

The fee is only a piece of a Baucus plan that would establish a new way to purchase coverage for Americans who have trouble getting and keeping health insurance. Americans could keep their own doctors.

A spokesman for Enzi said the Wyoming senator remains actively involved in the negotiations, and he is reviewing the Baucus proposal to make sure it keeps a handle on costs and that it also focuses on concerns folks brought to his attention during August.

White House press secretary Robert Gibbs, accompanying Obama on a trip to Ohio Monday, told reporters the administration would be pleased if the Finance Committee throughout the course of the next few days would “pull together the strands of many different pieces of legislation to improve health care for all Americans.”

Under the Baucus, plan health insurance exchanges, with information on different plans and prices, would allow small groups and individuals to buy policies at lower rates. Medicaid would be expanded to cover more low-income people. Nonprofit cooperatives would be established as an alternative to for-profit insurance companies, giving consumers more choices. Tax credits would allow low-and-middle income Americans to buy private coverage.

The package would cost under $900 billion over 10 years.

One Democratic source said the proposal was not a final product. Finance Committee members were encouraged to suggest modifications, although Baucus advised senators that any proposals that would increase costs should include provisions to offset any increase.

If insurance companies passed the new fee along to customers, they would run the risk of losing out in a newly competitive environment, a source said.

The package would make it harder to pass along this fee. Insurers would be required to release their administrative costs included in premiums, and profits, so customers know if they are getting a fair deal at a good price.

Obama is getting no shortage of advice on what to say in his health care speech to Congress, and much of it conflicts.

Liberals want him to issue a call to action — clear and bold. Conservatives hope he’ll back away from his push for sweeping changes this year and break health care legislation into smaller pieces.

Everyone is hungry for specifics about Obama’s stand on major elements of the package.

Associated Press writer Ricardo Alonso-Zaldivar contributed to this report.