As written, the bill greatly refigures hospital and physician payment structures. Medicare, for instance, would pay providers based on the quality of care that they give—not the quantity.
The bill also reverses a scheduled 21% physician pay cut, replacing it instead with a 0.5% increase in 2010. Yet it doesn't fix the underlying sustainable growth-rate formula, meaning that doctors, again, will be on the hook for up to a 28% pay cut in 2011.
The legislative package also extends coverage to roughly 94% of U.S. citizens, using a cost-conscious insurance exchange to offer affordable coverage to some consumers and an expansion of Medicaid to cover those in lower income brackets.
But it does so at a cost. Of the total cost, about $400 billion will go toward offering tax credits to bring people into the health insurance exchange. Roughly $300 billion will go toward the Medicaid expansion, and the balance is aimed at paying for such things as the physician pay fix, $11 billion; discounted drugs, $17 billion; and other tweaks to the system.
Much of the costs would be offset by $215 billion in new revenue from an excise tax on high premium, or “Cadillac,” health plans and $59 billion more in other new taxes, according to the Congressional Budget Office.
So far, no Republicans have come out in support of the Baucus bill—and even some Democrats have expressed reservations. But the chairman said he is confident that he'll land GOP votes further along in the process.
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