Video: Health care vote to take place Tuesday

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    >> our seniors.

    >> joining us from capitol hill , finance committee member senator chuck schumer , putting forth his own proposal as to what to do with some of the penalties. very interesting one, for that matter. we'll get to that in a second, senator. thank you for joining us. walk us through how you will set your priorities in attempting to cultivate a compromise as we now move to the next phase and as you will represent, basically running point on those compromised efforts. what are your priorities?

    >> well, first of all, it was a very good report from cbo yesterday in two ways. the way that everybody knows is that $829 billion is the cost, lower than anybody thought. well below the president's goal of $900 billion. and it's going to do more to decrease the deficit than we thought. it will actually help us with the deficit in both the ten-year and 20-year window. but, second, it also said that the affordability waiver, which senator snowe and i authored, which said if you can't find nrps at 8% or lower percentage of your income, you don't have to buy it, didn't knock anyone off the roll. what is that showed was that insurance companies can offer lower-cost plans to people if they're required to. it will be a lot easier for the middle class to pay for it. one of my highest priorities. health care is so expensive that until we get the costs down it's unfair to ask someone making $60,000 to pay $7,200 a year, to force them to do that. so, we're doing two things. one, we're saying, okay, the insurance companies have to offer them a cheaper plan. and, secondly, we're saying if this penalty should not be very ownerest --

    >> failure to buy health insurance , you're referring to?

    >> correct. we're making it lower. instead of that money just going to the government goes into a little account for each citizen who pays it, and that will pay for health care insurance, if they buy it within three years. so it's no longer really a penalty, but rather sort of a trust fund to help you buy health care .

    >> and if it works, you could use that same thing with the gas tax , if we ever got there, to get us off the foreign oil . i'll save that for a different conversation.

    >> yes.

    >> you mentioned lowering costs. a few things that have struck me as a reporter, learning about our health care system as my job, one, the anti- trust system that exists for health care , anti-competitive nature for the single provider in so many of our states, 70%, 80% of the market. i'm sure you're familiar with that.

    >> yeah.

    >> the difficulty of getting any real choice for us in employer-based health care . not necessarily because we're dissatisfied, but because we can bring a much stronger market to bear on a national exchange if we truly have affordability. i know you understand market dynamics certainly as well, if not better, than i do. if you talk about reducing choice, where do you stand, as you look at this compromise, on the matter of anti-trust exemption and the matter of any variety of proposals for affordability for people like myself, ezra, or 147 million of us that may want to opt for a different plan that would yield lower costs?

    >> i agree with both of those. first, even in new york, which is supposed to have one of the more competitive marks -- i was with some construction company executives. they have either two, three or four plans to choose from. that's it, for their workers. we all know when there are very few, two, three or four, there's no price competition . that's why the price keeps going up. to get rid of the anti-trust exemption, i'm a co-sponsor of senator lehy's proposal to do just that. the more competition, the better. any way we can bring competition in to our plans to get the costs down, the number one reason health care costs go up -- not number one, but one of the top two or three, is that there is virtually no competition in large segments, overwhelming majority of segments in the insurance industry . anti-trust exemption is a good idea. many of us have advocating for a public option. in so many places if you leave it up to private industry , there won't be competition. and a level playing field public option, which competes on the same ground with the private insurance companies will bring costs down dramatically.

    >> as the lead negotiator for the democrats on this bill, as you go to the merger, will you allow, will you present a bill that doesn't have the public option, that does not have some sort of anti-trust, that does not have some form of choice?

    >> i think that we will -- the bill will involve all of those and be big improvements. we're working hard on the public option to get broad consensus in the caucus. i'm working with senator carper, for instance, one of the leaders of the moderate group, to get them on board, working with more liberal members, senator harkin, senator brown, senator sander, senator whitehouse. i think we can come to a compromise on that. as for the anti-trust exemption, it will be considered. it was not part of the finance or health committee. i will argue to put that in there. and as for more choice, the more choice, the better. and i like the issue of choice. i think it will help bring costs down.

    >> ezra, go ahead.

    >> a vote on tuesday in the finance committee which you'll be part of, then the merger of the health and finance bills and after that, votes of the merger of the house and senate bills. one on the public option, i've heard a bit about this compromise that will re-create public option that states can opt out of. will you be pushing that and the cbo has an excize cost on high-cost plans but ends up going down over time , but a lot of house members signed a letter to napsy pelosi saying they want that out of the bill. where do you stand on that as well?

    >> the main concern of the house members and me, many of us in the senate, is that middle-class members aren't hurt here. if you're a firefighter, say, and you make a decision that i'll only be paid $50,000 a year, sort of low salary for a skilled and important profession, but in turn i'll get a good, good health care plan, you shouldn't be taxed for that. i was told yesterday, for instance, there was a large company in california where the workers said cut our salaries by $4,000, but doesn't cut our health care . they shouldn't be taxed for that reason. on the other hand, there are lots of high-end cadillac plans that aren't in this category, and i think we can deal with those. i think we'll make a compromise here and move the number up a little bit and deal with particularly exempting these kinds of middle class people like firefighters from the tax.

    >> what of the issue of a public option that states could exempt themselves from if they didn't want to participate?

    >> that's one of the things being very seriously considered. i'm not going to -- we have a range of things we're considering. senator carper and i met for quite a while last night and made progress and talked to a large number of members last night, yesterday. and i am optimistic that there will be some kind of public option in the bill the president signs. i'm very optimistic.

    >> and for our viewers specifically, where do you find the greatest resistance to anti-trust, more choice, everything we just discussed? where do you run into -- it seems so self evident, they seem so obvious.

    >> yeah.

    >> i get confused.

    >> your question is obvious, too. the insurance industry is happy the way it is. they want more customers, but they want more customers on the same basis that they are now, which is without much competition so they can charge a maximum rate. and we need more competition to counter that.

    >> all right. listen, senator, thanks for making time for us this morning. keep us posted,

By Tom Curry National affairs writer
msnbc.com
updated 10/8/2009 2:25:20 PM ET 2009-10-08T18:25:20

Next week, the Senate Finance Committee will likely approve a bill designed to overhaul insurance, putting Congress another step closer to restructuring the nation's health care system.

But unresolved issues will confront senators when that panel's bill is melded with the health committee's legislation and when Senate negotiators square off with their House counterparts.

Here's a look at some of what remains to settled:

Will the final bill ditch the Senate Finance Committee’s tax on high-cost insurance plans in favor of a tax on high-income people?
The House Democrats' bill would get some of the money needed to pay for insuring the uninsured by raising taxes on people earning $350,000 or more.

This idea seems to have public support: in a Pew Research Center poll released Thursday, 58 percent of respondents favored hiking taxes on families with incomes of more than $350,000 as a way to pay for expanding health insurance.

House Speaker Nancy Pelosi said Thursday Democrats are weighing the idea of a windfall profits tax on insurance companies. She said Monday that Congress might also levy a value-added tax on goods and services, as is common in European countries.

The Finance Committee bill takes a very different approach.

It would get much of the revenue needed to pay for insuring the uninsured by imposing a new 40 percent tax on high-cost insurance plans. The target: so-called “Cadillac” plans where the cost is greater than $8,000 for individuals and $21,000 for family coverage.

The tax, according to Finance Committee Chairman Max Baucus, D-Mont., will help curb the growth in health care costs.

And for many firms and employees, Baucus argues, this tax will never take effect.

“It doesn't go into effect till 2013; a lot of people are going to adjust,” he explained last week.

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“They're not going to want to pay that,” Baucus said. “Their companies are not going to want to have insurance policies that cost that much.” He argued that, “after a while, there wouldn't be any tax, because companies just would find a way to avoid it. Find some other way.”

What other way? Trim insurance plans to keep them under the taxable threshold and, instead, pay workers more in cash.

Who's who in the health care debateAccording to the Joint Committee on Taxation, by 2016, the nearly 25 million households affected by the tax will be paying, on average, $1,000 more in taxes.

But more than 150 members of the House have signed a letter urging Pelosi to reject the tax once she starts bargaining with Senate Democrats.

It “would result in an unacceptable burden on middle-class families... who have no control over the cost of their health insurance policies,” said Rep. Joe Courtney, D-Conn., who is leading the effort to block the tax.

“That’s the thing that I find so galling — this description of ‘Cadillac’ coverage — like it’s like buying a car. It’s not,” he said.

Who would be exempt from the new 40 percent tax on high-cost insurance plans?
If Baucus is able to keep his tax on high-cost insurance plans in the bill, pressure will grow to exempt some groups from it. Sen. John Kerry, D-Mass., has proposed exempting plans which unions have negotiated with companies.

How big a penalty will be imposed on those who do not buy insurance?
The Finance Committee originally would have imposed a maximum annual penalty of $3,800 per family, but that was lowered to $750 per adult.

In the House bill, non-buyers would pay a penalty equal to 2.5 percent of their income. But the penalty could not exceed the average cost of a health insurance policy in the newly created “exchange” or electronic marketplace.

If the penalties are set too low, they won’t have the intended effect: prodding healthy uninsured people to buy coverage.

Will Congress create a government-run insurance plan along the lines of Medicare?
The Finance Committee defeated two public plan proposals, but the idea could be revived on the Senate floor, or in bargaining with House negotiators.

On the Senate Finance Committee, the Democrats who voted against the public plan came from states that Republican Sen. John McCain won in last year’s presidential election: Baucus of Montana, Sen. Blanche Lincoln of Arkansas, and Sen. Kent Conrad of North Dakota.

That pattern is likely to be seen again among House Democrats.

Will proponents of the Medicare Advantage program rally to save it from the cuts proposed in the Finance Committee bill?
The Finance Committee bill would cut $117 billion from spending on the Medicare Advantage plan from 2010 to 2019.

Medicare Advantage, a program in which private-sector firms insure about 10 million people age 65 and older, has both its critics and its champions in Congress. In some states, such as Florida and Oregon, the plans have become quite popular.

The Finance Committee bill gives some protection from the proposed cuts to Medicare Advantage plans in certain parts of the country where Medicare Advantage is less costly than the traditional fee-for-service Medicare.

But more battles are likely ahead on Medicare Advantage.

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