Max Baucus (D-MT), chair of the Senate Finance Committee and one of six Senators attempting a bipartisan compromise on health-care reform, has threatened to write his own plan if those negotiations fail.  CNN reports that Baucus has his plan ready to drop in the Senate, and that it will not include the public option that Barack Obama has wanted and that the House Progressive Caucus has demanded.  It will cost less than other proposals, but its funding will trigger yet another attack on one of Obama’s pet arguments:

A proposed health-care bill by the powerful chairman of the Senate Finance Committee does not include a government-run insurance plan, a source close to the discussions said Monday.

Although the proposal from Sen. Max Baucus excludes a “public option,” it would allow for the creation of nonprofit health care cooperatives, an idea that some moderate Democrats and Republicans have expressed possible interest in supporting. …

Baucus’ bill would cost less than $900 billion over 10 years, according to the source. The price tag is at least $100 billion less than any other health-care reform bill currently under consideration by Congress, the source said.

It would be paid for, in part, by a new tax on health insurance companies that provide high-end “Cadillac” insurance plans, the source added.

Supporters of such a tax, initially proposed by Massachusetts Sen. John Kerry and other Democrats several weeks ago, say will it help curb the cost of health care by discouraging employers from offering such plans.

Obama is often fond of claiming that ObamaCare won’t force people to change insurance plans.  This tax intends to do just that, in the name of preventing “overuse” of medical resources.  This is the usual attempt to impose parity not by improving the lives of others, but by rationing resources so that a certain equality of mediocrity exists instead.

Of course, the better way to proceed in curtailing the overuse of resources is to eliminate third-party payers from most medical care.  When consumers have to pay for services and goods directly, pricing mechanisms keep the market from overuse as demand escalates price before it increases supply.  For that reason, any reform should involve the end of tax breaks for comprehensive insurance policies and the encouragement of health-savings accounts (HSAs) along with the creation of catastrophic health insurance coverage that would be readily available to all for a much lower price.

Instead, Baucus wants to use the tax code for even more social engineering, making the IRS responsible for enforcing not just the presumed individual mandates that are already part of HR3200, but also to determine what exactly qualifies as a “Cadillac plan” and enforcing compliance.  Does anyone in this country truly believe that the IRS plays too small a role in American lives?

I imagine that people who have these Cadillac plans like them.  So what happens to this Obama argument?

Now, I don’t know how clearly I can say this, but let me try to repeat it: If you’ve got health insurance that you’re happy with through the private sector, then we’re not going to force you to do anything.

The Baucus plan will force people out of “Cadillac plans,” which makes that inoperative — although I don’t think for a moment that Obama will stop using that argument.

As for co-ops, I’ll stick with what I wrote late last month.  Nothing prevents co-ops for health insurance from forming now, without government intervention.  Putting government behind the co-op movement makes them dependent on government for continued operation, and we can expect them to feed at the federal trough just as electric-power co-ops have done for decades.  Why are we recycling this bad idea in order to rescue another bad idea?