Is it Baucus’ “Wellpoint Plan”? or is it Wellpoint’s “Baucus Plan”?

by JC

Consumer Watchdog calls the Baucus/Wellpoint Plan “Deregulation of State Consumer Protection Laws”

It seems that Senator Max Baucus’ “Wellpoint Plan” has hit a snag as his framework was released yesterday, in a last ditch effort to recapture the limelight and lead on health care reform.

Jane Hamsher at Firedoglake moved this story down the field a bit by picking up where we left off and discovering a connection between the Wellpoint Plan and the plan Blue Dog Mike Ross offered up on Co-ops back in July, when supposedly nobody knew what was up:

If Fowler did indeed write the draft plan, then how did the same framework and language find its way into an amendment submitted by Blue Dog Mike Ross in July?

Jon Walker finds that “the two documents are almost identical and and sometimes use the exact same wording”…

Walker goes on to note that “at the time Ross’ amendment was submitted many Democratic senators and congressmen were both concerned and confused by Conrad’s co-ops idea. It seemed that Conrad was not sharing with most of his own party what his idea of co-ops would really be, but some how Rep. Ross was provided the document.”

Jane puts together an excellent timeline showing how the behind-the-scenes charade was conducted.

Daily Kos then extends the story by showing how Baucus’ Wellpoint Plan will gut state-level insurance industry regulations:

Max Baucus’ plan had the name of Liz Fowler, a former WellPoint VP who now works for the Finance Committee, in the metadata. When you have WellPoint personnel instrumental in writing the laws, you get little provisions like this:

Interstate Sale of Insurance. Starting in 2015, states may form “health care choice compacts” to allow for the purchase of non-group health insurance across state lines. Such compacts may exist between two or more states. Once compacts have been formed, insurers would be allowed to sell policies in any state participating in the compact. Insurers selling policies through a compact would only be subject to the laws and regulations of the state where the policy is written or issued.

This is something that conservatives have been begging to do for years. Even the most outgunned conservative on a talking head debate can vomit up “let people take their insurance across state lines to increase competition!” It sounds reasonable. But there’s a very good reason why it would quickly turn into a nightmare, and you can see it in the examples of Delaware and South Dakota.

Both of those states have essentially no regulations on credit card companies. When legislation passed allowing banks to issue credit cards across state lines, some states started wildly deregulating their credit card markets in a race to the bottom. South Dakota and Delaware won. And now practically all credit cards are issued from those two states.

So not only is Max doing Wellpoint’s dirty work, he is giving the republicans a dearly sought-after concession. And just what has he gotten from republicans for that bone? As far as I can tell, nothing. Not even one single republican agreeing to sign on to his framework.

Moving on, Consumer Watchdog released a report today criticizing Wellpoint’s Baucus Plan as being a defacto “deregulation of state consumer protection laws”:

A “framework plan” released today by the so-called “Group of Six” Senators negotiating a health reform bill headed by Senator Max Baucus (D-MT) would open the door to gutting state laws. The plan would result in a “race to the bottom” in health care regulation by allowing insurance companies that participate in “health care compacts” to choose the weakest state law to govern all their policies, regardless of which state the policies are sold in. Currently, insurance companies must abide by the state laws of any state where they sell insurance. The Baucus plan resembles an industry proposal carried by Mike Enzi (R-WY) in 2006…

I’m sure we’ll have more details as this story unfolds in Baucus’ haste to sell out become relevant again.


  1. Tim

    Wait, so I’m really fuzzy on this. Why again are states that promote business like South Dakota and Delaware the devil? Are cats mating with dogs in Rapid City?

    Can someone give me a substantive reason or bad consequence this “race to the bottom” has produced???

  2. David

    The difference in state mandates (regulations) in health care is a big reason one state has cheaper health care than another. So if you can buy across state lines you can get cheaper health care. There are some good aspects to this (competition) and some bad (undermining state efforts for consumer protection). It’s a tradeoff.

    What I don’t understand is how the proposal for a government option doesn’t have EXACTLY the same effect. The government option presumably would be a minimal plan that would NOT meet the highest state regulations. In fact, it may not even match the lowest state regs. If you (or a company) has the true option of buying this plan it is perhaps even a faster way to get to the regulation “bottom.” What I’ve heard about the government option is that it comes with all sorts of pay-for-features (e.g., abortions). This not only undermines state regs but it moves social policy into the fed.

  1. 1 Baucus/Wellpoint Bill Fails; Health Insurer Stocks Rally 3% in Response « 4&20 blackbirds

    […] other news, the stock market took kindly to the Baucus/Wellpoint bill with a 3% surge in health insurer stocks on news of the bill’s […]




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