Senators Spar Over Medicare on Day 3 of Reform Negotiations

Committee Rejects Nelson Amendment

The Senate Finance Committee rejected an amendment Thursday aimed at squeezing $106 billion from the nation's pharmaceutical sector, averting the potential collapse of a deal struck between drug makers and the White House to gain industry support for health-care reform.

The measure, offered by Sen. Bill Nelson (D-Fla.), would have extracted higher rebates from manufacturers on medicines sold to low-income seniors. Ten Democrats on the committee supported the amendment, but three Democrats sided with 10 Republicans to defeat the Nelson proposal. Opponents included Chairman Max Baucus (D-Mont.), who helped cut the drug industry deal with White House officials, along with Sens. Robert Menendez (D-N.J.) and Thomas R. Carper (D-Del.), whose home states have a large industry presence.

The vote came as the committee plodded into a third day of work on a major bill to overhaul the nation's health-care system, slowly disposing of Republican amendments aimed at heading off proposed cuts to Medicare and related programs.

After voting Wednesday on 29 amendments -- out of more than 500 offered so far -- the committee Thursday turned back additional GOP attempts to restore full funding to a private health insurance program called Medicare Advantage. Then it turned to a series of amendments related to the expanded coverage under the bill, with a debate expected Thursday afternoon on the degree to which employers should be pressured to provide health care to their workers.

Democrats and Republicans on the committee continued to spar, meanwhile, on the underlying rationale for the health-care reform bill: to avert a fiscal crisis by lowering health-care costs for companies, individuals and the government.

Responding to an attempt by Sen. Orrin G. Hatch (R-Utah) to restore $113 billion in proposed cuts to Medicare Advantage, Sen. Kent Conrad (D-N.D.) said the program is a major reason that Medicare is heading for bankruptcy. He charged that Republicans were giving false hopes to Medicare Advantage beneficiaries "that we can keep on paying for something that is clearly unaffordable and is going to contribute to the bankruptcy of Medicare."

Baucus told the panel, "Any attacks against this bill are essentially a defense of the status quo." He charged, for example, that a no vote would amount to "a vote to let insurance companies continue to deny coverage based on preexisting conditions."

But Sen. Mike Enzi (R-Wyo.) disputed Baucus's assertion that no Republican alternatives to the health-care reform bill exist. "That's not true," he said, adding that several GOP alternatives were available, including one on his Web site.

Baucus continued to fend off efforts aimed at providing lawsuit relief to physicians, though he said he hopes the legislation eventually will include some changes to malpractice law.

"We need to act in this area," he said. But taking instructions from Senate Majority Leader Harry M. Reid (D-Nev.), Baucus said the committee did not have jurisdiction over tort reform. "The proper place" for that debate, he said, "is the Senate floor."

Working until after 11 p.m. Wednesday as they continued marking up the bill, a process expected to stretch into next week, Democrats resisted attempts by Republicans to restore proposed reductions to the Medicare program, which serves the elderly, and get rid of government restrictions on the ways insurance companies market to seniors.

Though the session moved slowly and included partisan sniping, Baucus could take comfort in signs about the bill's prospects.