Baucus Outlines Plan for Health Care Reform

November 13, 2008 ( - U.S. Senator Max Baucus (D-Montana) has provided an 89-page "Call to Action" to reform the American health care system.

The report is a proposal announced by Baucus, Senate Finance Committee Chairman, on Wednesday (See Baucus Announces Proposal for Universal Health Care ). In a press release, Baucus said the goals of his plan are to achieve universal coverage, reduce health care costs, and improve the quality of care our system provides.

Under Baucus’ plan, once quality, affordable care is accessible to all Americans, it will be an individual responsibility to have health insurance. Baucus’ proposal includes a one-stop insurance marketplace and limited expansions of public programs to help individuals achieve coverage.

Building a Marketplace

According to the “Call to Action” report, the foundation of Baucus’ plan is the creation of a nationwide insurance pool called the Health Insurance Exchange – a marketplace where Americans could easily compare and purchase the plans of their choice. Private insurers offering coverage through the Exchange would be precluded from discrimination based on pre-existing conditions.

Premium subsidies would be available to qualifying families and small businesses. Baucus expects that the vast majority of American employers would continue to provide coverage as a competitive benefit to attract employees, so those who already have health coverage could choose to keep what they have.

While the Exchange is being created, the report says the Baucus plan would make health care coverage immediately available to Americans aged 55 to 64 through a Medicare buy-in, and it would begin to phase-out the current two-year waiting period for Medicare coverage for individuals with disabilities. The plan would provide every American living below the poverty level with access to Medicaid, and would also ensure that all states use the State Children’s Health Insurance Program (CHIP) to cover children at or below 250% of the Federal poverty level. Finally, the Baucus plan also calls for additional Indian Health Service (IHS) funding.

A Focus on Wellness

The Baucus report says the new system would immediately focus on prevention and wellness, rather than on illness and treatment. Those who are uninsured would be given a “RightChoices” card that guarantees access to recommended preventive care, including services like a health risk assessment, physical exam, immunizations, and age and gender-appropriate cancer screenings recommended by the U.S. Preventive Services Task Force. Current Medicare, Medicaid, and CHIP beneficiaries would receive recommended preventive services with little or no co-payment.

Individuals without private coverage and not eligible or enrolled in a public health coverage program, but whose RightChoices screening detected and diagnosed one or more of the most common, costly chronic conditions, would qualify to receive treatment on a temporary basis until viable coverage options are available under the Health Insurance Exchange. Preventive services would be covered by all insurance options offered through the Exchange.

Senator Baucus' "Call to Action" notes that today's payment systems reward health care providers for delivering more care rather than better care. His plan seeks to refocus payment incentives toward quality and value.

The report says increasing the supply and availability of primary care practitioners by improving the value placed on their work, and fixing the Medicare physician payment formula are necessary steps toward reform.

Baucus' plan would promote accountability and coordination among providers by encouraging providers in different settings - physician offices, inpatient hospitals, post-acute care settings, and others - to collaborate and provide patient-centered care in a way that would improve quality and save money. To facilitate his proposed delivery system reforms, Baucus calls for investing in new comparative effectiveness research and health information technology (IT), and reinvesting in the training of the health care workforce.

Curbing Costs

In his health care proposal Baucus addresses excess spending and cost imbalances in the current health care system. Beyond measures to refocus the system on primary care, reward quality care, and invest in critical research and technology, the Baucus plan would endorse direct steps in additional areas to curb excess health care spending.

According to the report, the Baucus plan would:

  • invest more to detect and eliminate fraud, waste, and abuse in public programs;
  • address overpayments to private insurers in the Medicare Advantage program;
  • increase transparency of cost and quality information and require disclosure of payments and incentives to providers by drug or device makers that may lead to biased decision-making;
  • consider careful reforms of medical malpractice laws that could lower administrative costs and health spending throughout the system, while ensuring that injured patients are compensated fairly for their losses;
  • consider policies to shift the focus of long-term care from institutional care to services provided in the home and community to improve the quality of care delivered and reduce costs; and
  • explore targeted reforms of the tax code to make incentives more efficient, distribute benefits more fairly, and promote smarter spending of health care dollars by consumers themselves.

"It is the duty of the next Congress to reform America's health care system. In 2009, Congress must take up and act on meaningful health reform legislation that achieves coverage for all Americans while also addressing the underlying problems in our health system. The urgency of this task has become undeniable," Baucus said.

The full text of Senator Baucus' "Call to Action" report can be accessed here .