As Panel Votes Today, Democrats Look Ahead

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Tuesday, October 13, 2009

The Senate Finance Committee will hold a landmark vote on health-care reform legislation Tuesday that is expected to underscore the deep partisan divisions that have emerged and hardened over five months of debate.

With few, if any, Republicans expected to support the bill sponsored by Chairman Max Baucus (Mont.), Democrats have already begun their own internal negotiations aimed at reconciling the various measures passed by House and Senate committees. As part of that exercise, lawmakers are reviving ideas that had been discarded, including a new approach to a government insurance plan that appears to be gaining support with party moderates.

The finance panel's vote marks a watershed in the quest to overhaul the country's health-care system. Not since Theodore Roosevelt proposed universal health care during the 1912 presidential campaign has any such bill come this far.

As the action shifts to the House and Senate floors in the coming weeks, a handful of major issues -- and many smaller ones -- remain unresolved. The two chambers disagree on how to pay for the legislation, with the Senate preferring a tax on high-value insurance policies as the main revenue-producing measure, and the House a surcharge on millionaires. Liberal Democrats want to penalize companies that do not provide coverage to their employees; moderate Democrats would take a less punitive approach. And many lawmakers remain unconvinced that the insurance policies Congress would require people to buy would be affordable.

But so far, negotiators are attempting to smooth out wrinkles before they become major rifts. "We are much closer than we've ever been. I think we're going to make it," said House Energy and Commerce Chairman Henry A. Waxman (D-Calif.), a co-sponsor of the House legislation.

In the Senate, negotiations are shifting from the public forum of the Finance Committee to a more cloistered setting: the seating area in front of the marble fireplace in the office of Majority Leader Harry M. Reid (D-Nev.). After Tuesday's vote, Baucus will retreat to Reid's office, along with Sen. Christopher J. Dodd (D-Conn.) and a handful of top White House officials, to meld the finance panel's package with an alternative bill that Dodd shepherded through the Senate health committee in July.

The Finance Committee's bill is the only legislation on the table that meets Obama's objectives of providing coverage to the uninsured and barring insurance discrimination based on sex and preexisting conditions, among other factors -- all for less than $900 billion over 10 years, and without adding to the deficit.

Many liberal Democrats, however, view the panel's effort as too meek in key areas, something they say is a reflection of three months of negotiations with Republicans and the moderate leanings of many Democrats on the committee.

The measure does not mandate that businesses provide coverage to their workers. Committee members defeated two versions of a government insurance option. And the bill would tax high-value policies that, to the dismay of many liberal lawmakers, could affect some union households.

Senior Democrats, including Sens. John F. Kerry (Mass.) and Charles E. Schumer (N.Y.), both liberal members of the finance panel, are urging Reid to address these perceived shortcomings before the merged bill reaches the Senate floor. But Reid has told colleagues he is reluctant to produce a measure that proves too divisive within his caucus. Regarding a government-funded, or public, insurance option, in particular, he has said he wants proof that a provision would attract broad support within the party before it is included. Otherwise, senators would be free to offer changes as amendments on the Senate floor.

One proposal attracting considerable attention originated with Sen. Thomas R. Carper (Del.) and would allow states to decide whether to create their own insurance plans or join forces to provide coverage in collaboration with neighboring states. Other Democrats want to take the state-based approach a step further, creating a national public plan that states could join. Carper, a moderate Democrat, said he is not sure he is prepared to go that far. "I'm just chewing on that one," he said.

Sen. Evan Bayh (Ind.), a moderate Democrat, was bullish on Carper's approach. "I think something like that is likely, and would probably pass muster with moderates," he said. Sen. Ben Nelson (D-Neb.), who opposes a public option, said he likes Carper's idea. "I think the states, as laboratories of democracy, probably can find ways to deal with this, and if they do make a mistake it's a smaller mistake to correct than at the federal level," Nelson said.

One big question that will be answered with Tuesday's Finance Committee vote is whether Sen. Olympia J. Snowe (Maine) will remain at the table as the sole GOP negotiator involved in shaping the legislation as it moves forward. Snowe, a moderate, is promoting a plan that would create government coverage if private insurers do not offer affordable premiums. White House officials have indicated support for her approach, and Obama raised the issue during a phone conversation with the senator on Thursday, while prodding her about her vote. "He definitely was fishing," said Snowe, who remains noncommittal.

Snowe -- along with many Democrats -- also is concerned about whether people will be able to afford the policies they would be required to buy under the Finance Committee's bill. But Democratic aides anticipate near-unanimous support from their members on the panel, which would give them enough votes to pass it without any Republican backing.

While an industry-financed report released Monday arguing that the bill would increase insurance premiums stirred controversy outside the Capitol, Democratic aides said they were confident that lawmakers would view the report as "blatantly false and misleading."

"Instead of creating doubts about our package, I think the report is actually having the opposite effect," said one Finance Committee aide, who discussed Tuesday's vote on the condition of anonymity. "I think it has rallied supporters of reform around the package."

Across the Capitol, House Democrats have spent weeks trying to bridge the divide between liberals, who are concerned primarily about securing a public option, and rural conservatives, who fear that doctors and hospitals in their districts would do poorly under that approach. House Speaker Nancy Pelosi (D-Calif.) has been meeting almost daily with rank-and-file Democrats on that and half a dozen other topics.

The option liberals prefer would create a public plan that pays doctors and other providers on a schedule linked to Medicare rates. That idea, which Senate liberals also support, would hold down costs for the government, according to the CBO, but it would create a problem for providers in rural areas where Medicare rates tend to run much lower than the national average. Conservative Democrats would prefer a public plan that negotiates rates directly with providers, as private companies do. But that idea would save less money and put too little pressure on private insurance companies to cut costs, liberals counter.

Rep. John B. Larson (Conn.), a member of the Democratic leadership, said that Democrats are making progress on the issue. "I think there's wide support for a robust public option in the caucus, and that's been growing since we got back" to Washington after the August recess, he said. "I suspect by the end of [this] week, we're going to be in great shape."

House leaders say they have already cleared another critical hurdle: squeezing their $1.2 trillion plan for expanding coverage into the $900 billion box Obama has prescribed. Aides said the final bill is likely to include slightly less generous subsidies for co-payments and deductibles for people who buy insurance through the new exchanges the legislation would establish for those who do not have access to affordable employer coverage.

House Democrats were also considering shifting more low-income families out of the exchanges and onto Medicaid. And they have removed from the package an expensive provision that would have prevented doctors who see Medicare patients from taking a big pay cut in January. That measure, which would cost about $240 billion over the next decade, is now likely to move as a separate piece of legislation.

House leaders are also considering adopting a few tax increases identified by the Senate Finance Committee, although they have rejected the tax on high-value plans.

Instead, House leaders are sticking with a modified version of their original plan to impose a surcharge on the wealthy, starting with income over $500,000 for individuals and $1 million for families. That provision is expected to raise about $460 billion over the next decade, according to Rep. Sander M. Levin (D-Mich.), a senior member of the tax-writing House Ways and Means Committee -- more than half the expected cost of the reform package.

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