Political prescription

13 October 2009 By Martin Hutchinson

The bill approved by the Senate Finance Committee does increase healthcare coverage. But it adds complexity in areas like crosssubsidisation and fails to tackle widely recognised problems like lawsuits. It risks making the system even less economically efficient.

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The US Senate Finance Committee on October 13 approved a healthcare reform plan proposed by its chairman Max Baucus, a Democratic senator. The plan greatly expands health insurance provision through employer mandates and fines for the uninsured, while capping its cost for middleincome people. It must now be reconciled with four other plans produced by Senate and House committees before legislation proceeds.

The plan has been costed by the Congressional Budget Office as saving a net $81bn over the 10 years 201019. The plan's gross cost is estimated at $829bn over 10 years, offset by $201bn from an excise tax on highpremium insurance plans, $404bn in savings on Medicare (the US governmentfunded plan for Americans aged 65 and older), $110bn in other savings and $196bn in other taxes.

The CBO also estimates that the bill will provide coverage for an additional 29m people by 2019, leaving 25m uninsured (about one third of whom would be illegal immigrants) and raising the coverage ratio of nonelderly legal residents from 83% to 94%.

The trade group American Health Insurance Plans on October 12 issued a report by PricewaterhouseCoopers claiming the proposed legislation would raise the typical family's annual insurance premium by $4,000 per annum, or 16% of the estimated 2019 cost.

The Emergency Medical Treatment and Active Labor Act of 1986 requires all hospitals and ambulance services receiving payments under Medicare to provide care to anyone needing emergency treatment regardless of citizenship, legal status or ability to pay, without compensation.

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