Baucus: Insurance Options Would Be Fewer with Healthcare Reform

The number of health insurance options that insurers could provide would be "drastically" limited if healthcare reform takes hold, Sen. Max Baucus (D-Mont.) said.

The chairman of the Senate Finance Committee -- one of two Senate committees in charge of crafting a reform plan -- said the move would make it easier to obtain insurance and eliminate the waste and overutilization of medical services inherent in some insurance plans.

"We're going to have a simplified process for Americans," he said Tuesday at a meeting to discuss a new White House report that laid out the economic implications of healthcare reform. (See Healthcare Reform Could Mean Higher Incomes Down the Road)

Private insurers would not be able to offer dozens of plans if they are part of the insurance exchange -- a hallmark of the plans envisioned by both Baucus and President Barack Obama.

The exchange would be a clearinghouse of private insurance plans -- and would include a government-run plan if Obama and Baucus get their way. All would have to meet a standard of quality in order to participate.

Public insurance costs would be trimmed by $1.7 trillion according to Baucus -- mostly from controversial Medicare Advantage plans, which are Medicare plans run by private insurers.

The report that Baucus, Sen. Chris Dodd (D-Conn.), and several White House officials met to discuss found that meaningful healthcare reform would provide the average family of four with an extra $2,600 in 2020.

Written by the White House Council of Economic Advisers, the report said reform could have a major impact of the federal government's bottom line.

According to one calculation, if the spending growth on healthcare was slowed by 1.5% per year, the GDP would be about 8% higher in 2030 than without reform.

However, that figure does not take into account the money needed to cover those who are currently uninsured.

Congressional Budget Office (CBO) Director Peter Orszag said that the cost of expanding insurance to more people would be totally offset by savings identified within the healthcare system.

While he declined to elaborate on the exact math, he said that the CBO has already identified $300 billion that could be cut from Medicare and Medicaid -- about half of which would come from reducing payments to Medicare Advantage plans.

Sens. Baucus and Dodd will be among the Democratic members of Congress to meet with the president Tuesday afternoon at the White House to discuss reform.

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