Correction to This Article
Earlier versions of this story, including in the print edition of this morning's Washington Post, misidentified the group on whose behalf Rep. Mike Ross (D-Ark.) was speaking. Ross was speaking for the Blue Dog Democrats on the Senate health committee.

Senate Panel Advances Health-Care Overhaul

Praising and prodding Congress at once, President Barack Obama on Wednesday said a vast reform of the nation's health insurance system is required to head off instability to families, industry and the government itself. Video by AP
By Ceci Connolly and Lori Montgomery
Washington Post Staff Writers
Thursday, July 16, 2009

President Obama's ambitious drive to overhaul the nation's $2.3 trillion health-care system cleared a key Senate committee yesterday. But the administration was promptly buffeted by criticism from some of the industry players and moderate Democrats it has courted for months, calling into question the prospects for a bipartisan landmark bill.

The Senate's health committee approved a bill that would vastly expand health care in America, the first time in 15 years a congressional panel has endorsed coverage for all.

"We are now closer to the goal of health reform than we have ever been," Obama said.

But the 13 to 10 party-line vote, after rancorous comments by the top Republican on the committee, underscored the mounting tensions in Congress and the country over the president's signature item. From one end of Pennsylvania Avenue to the other, lawmakers, lobbyists and the president himself all moved quickly to position themselves for the intensifying battle.

In the House, a mini-rebellion was erupting over cost controls in its $1.2 trillion bill, while several influential industry groups broke their polite silence and issued pointed attacks on core elements of the legislation.

The president countered with a round of network television interviews and a new advertising campaign with the message: "It's Time."

"Make no mistake," Obama said, "the status quo on health care is not an option for the United States of America."

Convinced that overhaul of the nation's health-care system is a critical element to the government's long-term financial solvency, Obama has pressured Congress to deliver comprehensive legislation by early fall. Throughout the spring, the president successfully wooed many of the special interests that thwarted President Bill Clinton when he attempted a similar overhaul in 1993.

But yesterday the cordial talk gave way to rhetorical sparring.

Four Democrats on the Senate Finance Committee, in especially sharp language, called for new fees on the insurance industry aimed at raising $100 billion over the next decade.

Standing before a chart showing profits of the largest insurance companies soaring, the lawmakers challenged insurers to join hospitals and drugmakers in making financial concessions in return for legislation that could deliver up to 50 million new customers.

"That profitability is enough to make big oil companies blush," said Sen. Charles E. Schumer (D-N.Y.). "Our broken system is working very well for private health insurers, but not for American consumers."

Democratic sources said such fees are also gaining traction among Republicans, and are the leading contender to plug a $320 billion gap in an evolving Finance Committee proposal to pay for legislation that could cost $1 trillion.

Sen. Olympia J. Snowe (R-Maine), a key swing vote on the committee, said she "personally wouldn't have a problem with that."

The lobbying group America's Health Insurance Plans warned, however, that "a new tax on health-care coverage is the wrong approach and will make coverage less affordable for families and small businesses."

A spokesman for WellPoint, the nation's largest publicly-traded health benefits firm, voiced similar objections.

Senate Finance negotiators last night were working to resolve a number of issues, including how to structure a consumer-run insurance co-operative and how to address abortion. They also were struggling to close the financial gap, with Democrats pushing for additional tax increases and Republicans pressing to carve back subsidies.

In the House, members prepared to begin work today on their version of a comprehensive health-care overhaul. Like the bill approved in the Senate Health, Education, Labor and Pensions Committee, it would for the first time require both businesses and individuals to contribute to the cost of health insurance. Credits would be provided to some small businesses and families earning less than $88,000 a year.

But the bill provoked sharp criticism from the corporate world and an uprising within the Democratic ranks by moderates who want to see greater efforts at controlling soaring medical costs.

Rep. Mike Ross (D-Ark.), speaking for the Blue Dog Democrats on the Senate health committee, said the group has enough votes to thwart action in the House Energy and Commerce Committee.

"A lot of this could have been avoided if they started listening to us three months ago," he said in an interview. Despite a round robin of meetings with party leaders and a session with Obama on Monday, the bill "does not reflect many of our concerns," he said.

The House bill would cost between $1 trillion and $1.2 trillion over the next decade, depending on changes to Medicare physician payments. It would impose a surtax on wealthy Americans, beginning with a 1 percent levy for couples earning $350,000 and rising to 5.4 percent on income above $1 million.

Business leaders issued several critiques of the House approach. Both the National Federation of Independent Business and the U.S. Chamber of Commerce weighed in forcefully against proposals requiring employers to contribute to the cost of health care.

About 1,000 insurance agents fanned out across Capitol Hill, lobbying against creation of a government-sponsored health plan that would compete with private firms.

"This scares the heck out of me," said Tom Minkler, president of the Clark Mortenson Agency, an insurance and financial services agency in Keene, N.H. On visits to congressional offices, he expressed fear that the so-called public plan would lead to a European-style, single-payer system.

Obama, acknowledging the enormity of the task, observed: "It's time for us to buck up."

Staff researcher Madonna Lebling contributed to this report.

© 2009 The Washington Post Company