How Baucus's plan will help uninsured

U.S. Senate Finance Committee Chairman Sen. Max Baucus speaks to the media after a meeting with the 'Gang of Six' on health-care reform on Capitol Hill in Washington, D.C.

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Kai Ryssdal: Health potion number five is the one brewed up by the Senate Finance Committee. More accurately, by that committee's chairman Max Baucus.

MAX BAUCUS: This is a good bill. This is a balanced bill. It can pass the Senate.

Caveat number one today today with all that is that the Baucus plan isn't even an actual piece of legislation yet. It's going to take a couple of weeks for that.

Caveat number two is that the devil, as always, is in the details. One of those details is what today's proposal means for people who don't have insurance and for the small businesses where a lot of those people work. Here's Marketplace's Tamara Keith.


TAMARA KEITH: We're talking about more than 17 million people here. They work for small businesses, and they don't have insurance. The latest plan aims to help them, by giving employers a tax break to cover their workers. The tax credits would apply only to very small businesses who pay their workers low wages. And the biggest credit a business could get is 50 percent of the cost of the insurance. But a half-off sale is only a good deal if you can afford to pay half.

BILL GALE: I think it's going to be very hard to get small businesses to significantly raise coverage, just through these sort of standard tax incentives.

Bill Gale is co-director of the Tax Policy Center at the Brookings Institution.

GALE: So, for someone making $20,000 if their health insurance costs, say, $8,000, even with the subsidy the firm has to pay an additional $4,000. And it seems unlikely that firms are going to think that's a good deal.

And a company could only cash in on the incentive if they owe taxes, which means they have to turn a profit, which happens less often than you'd think. Gale says the companies with the most to gain are those that already insure their employees.

Todd McCracken is president of the National Small Business Association. He doesn't think the tax breaks alone will make much of a difference, when it comes to expanding the number of workers with coverage.

TODD MCCRACKEN: There have been proposals for years to do something like that, and we've said for a long time that while it would certainly help some companies, and it's better than a poke in the eye, you really need to reform the whole system if you're really going to improve rates of coverage.

McCracken says what would really help is slowing the sky-rocketing cost of insurance. And of course, all of the health-care bills aim to do that.

In Washington, I'm Tamara Keith for Marketplace.

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