Democrats Find Rallying Points on Health Reform, but Splinters Remain

(By Bill O'leary -- The Washington Post)
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By Shailagh Murray and Paul Kane
Washington Post Staff Writers
Monday, August 3, 2009

Democrats leave town for the August recess with frayed nerves and fragile agreements on health-care reform, and a new bogeyman to fire up their constituents: the insurance industry.

With the House already gone and the Senate set to clear out by Friday, the terms of the recess battle are becoming clear. Republicans will assail the government coverage plan that Democrats and President Obama are advocating as a recklessly expensive federal takeover of health care. And Democrats will counter that GOP opposition represents a de facto endorsement of insurance industry abuses.

"We know what we're up against," House Speaker Nancy Pelosi (Calif.) told reporters on Friday. "Carpet-bombing, slash and burn, shock and awe -- anything you want to say to describe what the insurance companies will do to hold on to their special advantage."

Although Pelosi won a significant victory last week when the Energy and Commerce Committee approved the House bill, setting up a floor debate after Labor Day, conservative Democrats were able to demand that negotiators weaken the government-plan provision. The uprising, which lasted for several days, suggested that the public option is growing increasingly vulnerable even as a consensus forms around other reform policies.

Republican leaders have pledged to use town halls, ads and other forums to intensify their assault on the Democratic-led reform effort. "I think it's safe to say that, over the August recess, as more Americans learn more about [Democrats'] plan, they're likely to have a very, very hot summer," House Minority Leader John A. Boehner (R-Ohio) said.

In the Senate, a bipartisan coalition of Finance Committee lawmakers is backing a member-run cooperative model as an alternative to the public option. But Republicans are beginning to push back against that cooperative approach, too.

The latest critic is Sen. John McCain (R-Ariz.), who on Sunday compared insurance co-ops to Fannie Mae and Freddie Mac, the government-backed mortgage giants that played prominent roles in the housing crisis. "I have not seen a public option that, in my view, meets the test of what would really not eventually lead to a government takeover," McCain said on CNN's "State of the Union."

Pelosi and other Democrats have countered that Republicans are seeking to protect a health insurance industry that is their business ally, not so much from a government insurance option, but from the broad industry reforms that enjoy public support, including the elimination of coverage caps and the practice of denying coverage to those with pre-existing conditions. The White House also wants to steer the debate toward insurance reform, as it is easier to digest than long-term cost control, which is another chief objective.

"How you regulate the insurance industry is as important to health-care reform as controlling costs," said White House Chief of Staff Rahm Emanuel. The public plan, he said, is one of an array of measures intended to change industry behavior.

As the rhetoric against the industry heated up, the leading insurance trade group issued a statement Thursday calling for lawmakers to cool down their criticisms and redouble efforts toward "bipartisan health-care reform." Robert Zirkelbach, spokesman for America's Health Insurance Plans, defended his industry, saying it had already proposed many of the changes that Congress is seeking, including those involving pre-existing conditions and ratings based on health status and gender.

Despite the sparring, House and Senate Democrats and three GOP Senate negotiators have reached broad consensus on the outlines of reform. Lawmakers generally agree that individuals must be required to buy health insurance, that Medicaid should be significantly expanded, and that tax increases, in some form, will be required. The final bill also could bring about some of the most significant changes to Medicare since the program was created in 1965.

But the rebellion from fiscal conservatives on the Energy and Commerce Committee last week served as a political wake-up call for Democratic leaders. With enough votes on the panel and on the floor to sink reform legislation, the Blue Dog Coalition forced Pelosi and Emanuel into concessions that made the government plan similar to private health insurance, sparking a new fight with House liberals.

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