Reader Question – Why is Senator Baucus' bill cheaper?

A reader writes:

Senator Baucus keeps saying his bill is cheaper and more fiscally responsible.  Even the CBO seems to agree.  So isn’t that better?

I’m going to keep repeating this because it’s so critical to honest debate.  There are good and bad aspects to everything.  There are always trade-offs.  You don’t really believe that the bill is cheaper for no reason do you? Yes, it costs less – but what did we give up in order to get that savings?

If you read the bill, one of the biggest area of savings likely comes from reduced subsidies.  Remember, those subsidies are aimed more at the middle class than anyone else.  People at the lower end of the socio-economic spectrum will get Medicaid coverage.  So Senator Baucus achieves this savings by making insurance cost more for many middle class families.

Is that a good thing?  That’s up to you.  What’s more important?  Helping families making $60,000 – $80,000 a year afford $15,000 insurance premiums (before other costs)? Should they bear the burden of a cheaper bill?  Is that good policy?

A better way to put it: Is this where we should be looking for cost savings in reform?

UPDATE:  Turns out Senator Snowe agrees with me.  She’s a Republican, right?

But just as importantly, Snowe also believes (as I do) that Baucus’ plan offers weak and inadequate subsidies. “The affordability question is crucial,” Snowe said. “It’s a central component, because at the end of the day people have high expectations they will have access to affordable health insurance.”

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