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Lines Drawn as Senate Panel Begins Debating Health Bill

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Wednesday, September 23, 2009

Democrats and Republicans formed clear battle lines Tuesday as the Senate Finance Committee opened a high-stakes debate on health-care legislation proposed last week by the panel's chairman.

Both sides found plenty to criticize in Sen. Max Baucus's bill, particularly its requirement that all U.S. citizens must buy health insurance at potentially high costs.

Sen. Jon Kyl (Ariz.), a member of the panel and the Senate's No. 2 Republican, called the measure "a stunning assault on liberty" that would lead to higher taxes and less consumer choice.

But Baucus (D-Mont.) defended his work and urged his colleagues to "do our part to make quality, affordable health care available to all Americans."

"Our actions here this week will determine whether we are courageous and skillful enough to seize the opportunity to change things for the better," he said in his opening statement.

Republicans outlined specific provisions they will seek to change or eliminate as the committee debates hundreds of amendments, a discussion that could stretch into next week. One target-rich area: the more than $500 billion in Medicare changes that the bill proposes, to squeeze waste from the insurance program for seniors. Another is the fine that the measure would impose on Americans who do not buy health insurance, which the GOP describes as a tax on the middle class. And they warn that the legislation's hefty new industry fees would be passed on to consumers.

Some Democrats, meanwhile, said they would press to further reduce costs for the millions of Americans who would be required to buy coverage.

Baucus revised his bill even before submitting it to the committee Tuesday morning, adding more aid for middle-class families and watering down a tax provision that could target a small number of union households.

Vice President Biden defended the measure, and the vast insurance industry changes it would make, in a speech Tuesday to a meeting of the National Association of Insurance Commissioners at National Harbor in Prince George's County.

Biden said that without such an ambitious overhaul as Baucus and other congressional Democrats are seeking, the cost of health care will overwhelm the budgets of consumers, governments and businesses. "To state the obvious, this is simply an unsustainable position," he said.

Baucus's bill would help extend health insurance to an estimated 94 percent of Americans, including 29 million who currently have none. An estimated 11 million people would join Medicaid under the legislation, and 25 million others would gain access to a new private-insurance exchange, including 7 million people who currently buy their own plans or pay for expensive coverage through their employers.

Democrats' primary concern with the Baucus plan is that it would not adequately subsidize working-class and middle-class households, which could be required to pay 2 percent to 12 percent of their income toward insurance premiums. After Baucus's revisions, no person who receives coverage through the insurance exchange would pay more than $3,987 a year for deductibles and co-payments; families' out-of-pocket costs would be limited to $7,973.

His changes would also make it easier for people whose employers offer unaffordable coverage to join the exchanges. And he would lower premium costs for older policyholders: While his original proposal would have allowed insurance companies to charge people in their early 60s up to seven times as much as younger customers, his modified bill would bar them from making seniors pay more than four times the lowest policy cost.

Facing complaints about his primary source of revenue for the package -- a tax on expensive insurance policies -- Baucus has proposed adjustments. He would raise the tax from 35 percent to 40 percent but apply it to fewer policies, making exceptions for non-Medicare retirees, people with high-risk jobs, and others who pay higher premiums because of their age or occupation, not because their benefits are particularly generous.

To cover the cost of the new provisions, Baucus proposes reducing the surplus the bill would generate over the next decade from $49 billion to $21 billion. He would also change the tax treatment of medical expenses, barring people from claiming them as itemized deductions unless they exceed 10 percent of income, rather than the 7.5 percent of income in current law.

After an outcry by manufacturers of medical devices, Baucus said he would exempt low-priced consumer products such as cotton swabs from a $4 billion tax on that industry. He also would increase a fee on insurance companies. And he accepted a new provision offered by Sen. Maria Cantwell (D-Wash.) that would change the way Medicare reimburses doctors, to reward the quality of care in addition to quantity.

But some committee Democrats said they would offer further amendments aimed at making coverage more affordable. "I believe we need to continue to work on it," said Sen. Debbie Stabenow (Mich.). Said Sen. Charles E. Schumer (N.Y.): "We all have lists, and that's what this process will be about in the next few days."

Staff writers Ceci Connolly and Michael A. Fletcher contributed to this report.

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