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Lawmakers Cut Health Bills' Price Tag
Negotiators in House and Senate Move Toward Compromises on Reform Packages

By Paul Kane and Shailagh Murray
Washington Post Staff Writers
Thursday, July 30, 2009

Key lawmakers on Wednesday moved to cut roughly $100 billion from the cost of health-care reform proposals as they sought to break weeks of gridlock on President Obama's signature legislative initiative before Congress departs for a month-long recess.

House Democrats reached a deal with conservatives in their caucus that would reduce the overall cost of the package and ensure more funding for rural hospitals, concessions that could allow the Energy and Commerce Committee to finish its consideration of the legislation.

Bipartisan negotiators on the Senate Finance Committee, meanwhile, announced that a draft of their reform package would come with a lower-than-expected price tag of less than $900 billion over 10 years, which would be slightly less expensive than the new target for the House bill.

But the twin movements toward compromise were not well received by all lawmakers.

As Senate conservatives pressured their Republican colleagues to back away from the emerging finance panel's package, House Democratic leaders tried to tamp down an uprising from liberals who complained that the plan's central plank -- a government-financed "public option" for insurance -- had been watered down by the deal with party moderates.

"I think failure is not an option," Rep. Henry A. Waxman (D-Calif.), chairman of the Energy and Commerce Committee, told reporters. But he agreed to postpone until Thursday the conclusion of a legislative markup of the massive bill to address the liberals' concerns.

The House proposal was modified to meet the demands of the Blue Dog Coalition, a group of Democrats from largely rural districts who hold enough votes on Waxman's committee to sink the legislation there. The new proposal includes a public health insurance option to compete against private insurers, but it does not tie the payments to Medicare's rates of reimbursement to health-care providers, something many liberal lawmakers had sought. Instead, it calls for the health secretary to negotiate rates with hospitals and doctors, just as private insurance companies do.

Rural health-care providers generally receive less in Medicare reimbursements than their urban counterparts, and delinking the public plan from Medicare was considered critical for conservative Democrats. "We have saved America's rural hospitals from closure," said Rep. Mike Ross (D-Ark.), a Blue Dog leader on the committee.

Liberals countered that the compromise would help private insurers compete against the public plan, questioning how Ross could demand $100 billion in other savings while pushing for a provision that might prove costly. "I think this completely cripples the public option," said Rep. Raul M. Grijalva (D-Ariz.), co-chairman of the Progressive Caucus.

"It's very sobering," said Rep. Anna G. Eshoo (D-Calif.), a close ally of House Speaker Nancy Pelosi (D-Calif.). Pelosi oversaw the closed-door negotiations with White House Chief of Staff Rahm Emanuel, a nearly seven-hour marathon of talks Tuesday and a lunchtime meeting Wednesday.

The Blue Dogs also received assurances that the overall legislation would cost less than $1 trillion. In addition, they won a new exemption from taxes on businesses that do not provide insurance to employees, doubling the original exemption for companies with less than $250,000 in annual payroll to $500,000.

Dozens of Blue Dog Democrats, as well as moderates representing wealthy suburban districts, remain opposed to tax provisions that call for a surtax of 1 to 5.4 percent of annual income on households earning $350,000 or more. Those provisions are expected to be adjusted upward, perhaps capturing only millionaires, by the time the bill comes to the House floor in September.

In the Senate, a team of three Democrats and three Republicans on the Finance Committee continued working through a bill that could be the only reform package to gain Republican support, a bill that some House Democrats are watching closely to determine whether they can support its tax provisions.

With the senators scrambling to complete their work before the start of the Senate's scheduled four-week recess beginning Aug. 7, Finance Chairman Max Baucus (D-Mont.) hailed early estimates from the Congressional Budget Office that pegged his plan at $900 billion.

Baucus said the preliminary legislation would provide coverage to 95 percent of Americans, be fully offset by tax increases and Medicare savings, reduce the federal deficit in the 10th year of the plan and increase employer-sponsored health coverage. The total cost would fall well below earlier CBO estimates of $1 trillion, the senator said.

The finance panel's draft would provide more cost savings through Medicare than previous versions, reducing the need for new revenue through tax increases from about $500 billion in earlier drafts to "somewhat over $300 billion," according to Sen. Kent Conrad (D-N.D.), who is working with Baucus on the bill. The draft also would scale back Medicare payments to physicians.

"Quantifiably, we're on the edge," Sen. Charles E. Grassley (Iowa), the Finance Committee's ranking Republican, said of prospects for a deal. He described the negotiations as coming down to roughly five critical concerns, out of about 100 originally under consideration.

As negotiators winnowed their issues, Senate Majority Leader Harry M. Reid (D-Nev.) reiterated his goal of securing a committee vote by next Friday. But in an official statement later in the day, he left out any goal of committee passage before the start of the recess.

Obama's initial target of having both chambers of Congress approve the legislation by Aug. 7 has already faded amid the long and sometimes acrimonious negotiating on Capitol Hill. House and Senate leaders now hope to pass separate legislation in September, then spend much of the fall attempting to reconcile the measures.

A slew of public polling in recent weeks has shown that support for the kind of far-reaching health-care reform Obama and many Democrats are seeking has dropped sharply, and in response, the president took his campaign on the road Wednesday. Appearing before an exuberant audience of about 2,200 in Raleigh, N.C., he outlined the protections he intends to require from insurance companies under any reform legislation that emerges from Congress, including prohibiting insurers from refusing to cover people with existing health problems or from dropping coverage for gravely ill patients.

"What a lot of the chatter out there hasn't focused on is the fact that if you're an American who already has health insurance, the reform we're proposing will provide you with more stability and security," Obama said.

But the key test, at least in the Senate, will be the ability to maintain GOP support and ensure the 60 votes needed to overcome an expected filibuster from Senate conservatives.

Sen. Mike Enzi (Wyo.), the ranking Republican on the Senate health committee and a participant in the Baucus-Grassley talks, acknowledged that Republican leaders are in close contact with him and urging him to slow the process.

"I'm not getting pressure not to make a deal. I am getting pressure to make sure that whatever we work on, we get it right," Enzi said. "And you can't do it right with time deadlines that are unrealistic."

Enzi is seeking assurances from Reid, Pelosi and Obama that the bipartisan agreements reached in the Finance Committee talks will stand throughout the lengthy process of merging that bill with the Senate health committee's legislation, which was approved on a party-line vote, and when reconciling it with the final version from the House.

"I'm not trusting anybody," Enzi said.

Staff writers Perry Bacon Jr., Ben Pershing and Scott Wilson contributed to this report.

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