While most eyes have shifted to the House, with the release yesterday of their bill, persistent rumors swirl around the Senate that the combination of the HELP and Senate Finance bill will actually offer less financial protection for the lowest income workers than either of the original bills.
Here’s the story: After months of laborious negotiations and weeks of debate, the Senate Finance Committee passed its version of health reform on Oct. 13. The Finance proposal differed from the bills passed by all of the other committees in numerous ways; one of the most striking was how much less financial protection it offered to low- and moderate-income people who would be required to purchase health insurance. Premiums under the Finance proposal were higher and benefits lower than in either the Senate HELP or the House proposal.
As Senate leaders work to merge the HELP and Finance proposal into a single bill, they are trying to reduce some of the premiums and, according to a paper by the Center on Budget and Policy Priorities and discussions Community Catalyst has had with a number of Hill staff, the focus is on reductions for people between 200-400 percent FPL—an admirable undertaking that we fully support.
However, in order to pay for those increased premium subsidies, Senate leaders are considering reducing premium subsidies for the lowest income households by as much as 50 percent more than the already low level in the Finance proposal. If this proposal is adopted, many low-income households will have a difficult time meeting their premium obligations, or could also be faced with financial penalties for failing to purchase health insurance. Rather than being helped by reform, they will be hurt.
Is taking subsidies away from low-wage workers really the only way the Senate can think of to finance necessary improvements in subsidies for those with slightly higher incomes? David Stockman, Ronald Reagan’s first budget director, famously noted that once in Washington he found it was “easier to curtail weak claimants than weak claims.” That adage appears to be alive and well in Washington today, as Senate leaders seem more willing to impose an unmanageable burden on low-wage workers than to explore progressive taxation or to wring a little more waste out of the health care industry, as their colleagues did in the House.
The Senate bill is still an enormous improvement from where we currently are and the process needs to continue to move forward.
As for subsidies, it is not too late for the Senate to change course, and for a bill to emerge that will improve affordability for both low- and moderate-income households. But it will only happen if people raise their voices and demand it.
--Michael Miller, Director of Strategic Policy