IT'S THE BAUCUS PLAN. BOTH OF US, RASTUS?:

What Will Kill Health-Care Reform (Matthew Yglesias, 9/15/09, Daily Beast)

he biggest obstacle to progressive dreams may not be the insurance industry, but simply politicians' aversion to the kind of tax increases that could really make reform work.

The crux of the matter is that to make the health-insurance system work requires a three-legged stool. First, you need to stop insurance companies from refusing to cover pre-existing conditions or people who seem to be at risk for getting sick. After all, providing coverage for sick people is the point of the health-care system. But in order to do that, you need to make sure that everyone buys insurance. Otherwise nobody will bother to pay premiums until they get sick and anyone offering insurance will lose money and go out of business. But in order to make everyone buy insurance, you need to make sure that everyone has enough money to afford it.

Thus, the health plans reported out by the relatively liberal committees in the House of Representatives and the Senate Health, Education, Labor, and Pensions panel all included regulations on insurers, a mandate to purchase insurance, and a sliding-scale of subsidies that would go to families earning up to four times the federal poverty line. That’s $88,200 for a family of four, meaning that families into solidly middle-class territory who don’t get health insurance from their employers would be getting at least some direct financial assistance to buy coverage.

The trouble is that all that help costs a lot of money, on the order of $1.4 trillion over 10 years. Baucus wanted a cheaper plan, more like $900 billion. And that meant basically dropping the subsidies for people earning between three to four times the poverty line, or between $66,000 and $88,000 for a family of four.