Real health care reform is the kind of issue that can have a long-lasting political impact. If Democrats band together and pass a good program, then Republicans will have an even harder time winning back seats. And the Republicans know this, so they're doing whatever they can to torpedo it. This is to be expected.
What's distressing is that Baucus and a group of other Democrats are enabling them. They're creating a "bipartisan compromise" that not only doesn't do the job, but it creates a wedge issue that splits the Democratic coalition wide open. It doesn't help lock in Democrats; it would be the best possible move to help Republicans take back seats, and possibly control of Congress.
Every change has winners and losers. Life is not a zero-sum game, but somebody's ox gets gored. Real health care reform, the kind that the vast majority of Americans (and an even larger majority of DKos readers) support, would help the vast majority of Americans. It would probably help the majority of physicians, especially primary care providers, and many hospitals, especially non-profits serving lower-income patients. It would also help corporations, by lowering their insurance costs, and thus make American industry a bit more competitive. That 16-17% of the economy now spent on medical insurance and care could start to be whittled down without harming outcomes.
But it would directly hurt a few groups: Medical insurance companies, pharmaceutical manufacturers, and the highest-paid medical practitioners. And it would indirectly hurt Big Media, since the insurance companies and pharma are big advertisers. (You expected them to provide objective coverage?)
Single-payer would have the most profound effect, of course. A real public option waters down the effect, but still has the same winners and losers.
Now let's switch to the "compromise" that Obama seems willing to entertain, just so that he can say he did something. It's a mix of the RomneyCare plan in Massachusetts (individuals are required to purchase insurance from a private insurance company, at unregulated rates, with a state "connector" to broker these high rate plans), the McCain plan (tax employer contributions to medical benefits, so employers have less incentive to even provide insurance and more people can be forced into the higher-priced individual market) and old-fashioned urban Democratic-machine redistributionism (tax the upper middle class to provide benefits to the lower middle class, while the wealthy are untouched).
The proposal thus raises the cost of medical insurance for those who are in above-average-cost areas, like the coastal cities. The Massachusetts Connector doesn't begin to provide family coverage for $15k/year, the proposed maximum tax-free plan. It quoted me (for a family of four) $1775/month for "HMO Blue Value with Basic Rx", which covers only 50% of prescriptions after a deductible. It quoted $1501/month ($18k/year) for "Tufts Health Plan HMO Select 20" with moderately high deductibles and a very limited choice of doctors (you can't keep the ones you have; maybe 10% of their network is included, such as the new graduates who don't have patients yet). Harvard Pilgrim Tiered Copayment HMO 30 (rather high deductibles all around) is $1789/month. A more typical "corporate" plan, HMO Blue Premium, would be $2541/month. Okay, that last one approaches Cadillac quality, I suppose.
Under what seems to be the Baucus embrace of RomneyCare, each state would copy that plan. And those who make less than $75k/year would get a graduated subsidy, so a family making say $70k might only have to pay maybe $16k/year, not the full $18k cost of private insurance (the details aren't clear yet). Who are the winners and losers? Insurance companies and pharma win big time! The general public loses, though some lower-income families, especially in the low-insurance-rate red states, might come out ahead with their policy subsidies. But simply raising Medicaid payments would be a far cheaper way to cover them; BaucusCare gives about 30% off the top to the insurance industry.
But here's the political killer, the thing that has Republicans salivating: The middle to upper-middle class population, those who are near the median income in higher-cost areas (typical college-educated professionals like engineers, not the wealthy), get socked. For instance, I'm self-employed, and because I'm in business, I go through a group insurance broker who puts me (a one-family business) into a small-group plan at a lower rate than the Connector. I get a modest HMO (downscaled from last year's after a 28% rate hike!), but one that lets my family use our local doctors (not "Select"), for $18k/year. It's paid through the business so I can deduct it. It's a huge share of my income but we need insurance. People in my category (who do consulting and contract work; the full-time jobs of the Clinton era are long gone) would lose that deduction. We'd end up worse off under BaucusCare than we are under the status quo! This would have been almost unimaginable during the election, when Obama campaigned against McCain's plan.
College-educated professionals are a key part of the Democratic coalition. It's no longer rich vs. poor -- the Rethuglicans have a bimodal coalition now. They have the Truly Wealthy, and they have a lot of lower-income uneducated white folks (mostly in the South) who are kept in line by religious fear. Plus, of course, the usual hate groups. Republicans think "reality based" is an insult! Their coalition has started to lose its traditional small-business base; the "Kiwanis Republicans" still exist, but they're no longer so solid. Small business folks still like low taxes, but they dwell in reality.
But a medical plan that dramatically raises the cost to those in the $75-200k family income range, and leads corporations to reduce their employee benefits (especially the more generous ones negotiated by unions), would make those beneficiaries feel abandoned by the Democratic Party. And since it's union members who usually have the best employer-paid plans, they too would feel abandoned. It would harken back to the olden days when the urban laborer was a Democrat and his haberdasher was a Republican, both out of self-interest. Since BaucusCare is unlikely to get the megachurch crowd onto the Democratic side, it would be a knife into the heart of the party.
So the Progressives should block it. This kind of "compromise" is suicide, far worse than nothing, both from a benefit and political viewpoint.