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Senate Democrats largely support health-care deal that drops public option
But groups representing hospitals and doctors oppose Medicare buy-in

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Thursday, December 10, 2009

Senate Democrats on Wednesday largely embraced a compromise that dropped a "public option" from health-care legislation, setting aside their concerns about aspects of the consensus plan in the hopes that the deal hatched by negotiators would serve as a rallying point in their push for the passage of reforms.

Industry groups representing doctors and hospitals attacked one of the alternatives in the deal, designed to take the place of a proposed government-run insurance program, in the hours after Senate leaders announced it Tuesday night. They argued that a plan by liberal Democrats to allow uninsured individuals as young as 55 to buy into Medicare would be financially untenable and would jeopardize access to health-care services for millions of Americans.

But even Democrats who were not thrilled with the buy-in program applauded the deal's central component: replacing the public option with two national private insurance policies under the oversight of the Office of Personnel Management, the agency that administers health benefits for federal employees.

"If there's 60 senators who can reach agreement, I'm for it," said Finance Committee Chairman Max Baucus (D-Mont.), a chief sponsor of the bill, who represents the kind of rural state that industry groups said would be harmed by a Medicare buy-in. "Sometimes you've got to do a little bit on the liberal end and a little bit on the moderate end to reach agreement. And that's what's going on."

Earlier Wednesday, President Obama gave the compromise a major boost, praising Senate Democrats for producing "a creative new framework" to provide coverage to uninsured Americans without relying on a public option, an idea that has long divided Democrats and threatened final passage.

"I support this effort, especially since it's aimed at increasing choice and competition and lowering cost," Obama said at a health-care event near the White House, where he was joined by a handful of Senate Democrats. "So I want to thank all of you for sticking with it, for all those late nights, all the long weekends that you guys have put in. With so much at stake, this is well worth all of our efforts."

Senate Majority Leader Harry M. Reid (D-Nev.) announced the compromise Tuesday night after overseeing days of negotiations between moderate and liberal Democrats over the last sticking points preventing all 60 members of his caucus from supporting the legislation.

Reid was expected to include the new insurance program and the expansion of Medicare eligibility in the "manager's amendment" of last-minute changes to the $848 billion bill that he submitted Wednesday night to the Congressional Budget Office. But Democratic aides said the Medicare provision could still be dropped or altered before the measure advances to the floor. That could happen as soon as next week, assuming Reid can answer remaining questions. Democrats hope to keep the legislation on track for final passage before Christmas.

Lawmakers remained wary of the objections of hospital and doctor groups, which have considerable influence on Capitol Hill. The groups believe their members could be the big losers under the proposal to allow people as young as 55 to buy into Medicare, because the program pays providers at much lower rates than private insurers, and because older Americans are the greatest consumers of health-care services.

Hospital representatives said the idea also would violate a deal they reached with the White House this year to give up $155 billion in Medicare payments over the next decade. The concession helped to lower the cost of a health-care package that promised hospitals a pool of at least 30 million newly insured customers.

"Such a policy will further negatively impact hospitals, after we have already agreed to contribute the maximum level of sustainable reductions that community hospitals can reasonably endure," the Federation of American Hospitals said in an e-mail to its members. The American Hospital Association urged the 5,000 facilities and 37,000 individuals in its membership to lobby senators "to reject expansion of Medicare."

American Medical Association President J. James Rohack warned Wednesday on his blog that expanding Medicare would jeopardize access to physician services not only for near-retirees, but for millions of people older than 65 who already are covered by the federal plan.

A Medicare buy-in program would "adversely impact American society by putting people into a government program that is going broke with the combination of Baby Boomers entering in 2012 as they turn 65," Rohack wrote. "We would add millions of more patients to a program where it is difficult for a new enrollee to get an appointment with a physician."

Republicans and their business allies strongly criticized the Senate bill, portraying it as a threat to jobs. The National Federation of Independent Business, a small-business association, released a statement opposing the legislation as an inadequate response to rising costs. Sen. Mike Enzi (R-Wyo.), who helped to negotiate an earlier version of the Senate bill, called the revised measure "a job landslide" that would bury employers "under an avalanche of new regulations."

Although Democratic senators expressed confidence that the bill will pass, they professed to know few details about the public-option deal, kept under wraps by Reid while the CBO analyzes the cost.

"I don't know what the deal is," Sen. Bill Nelson (Fla.) said as he emerged Wednesday night from a Democratic caucus meeting. "But I think at the end of the day that we'll have 60 votes."

One question as of late Wednesday was whether a "trigger" mechanism would be included in the Office of Personnel Management program, creating a public option if the private plans were unable to provide affordable coverage. That is a crucial distinction for Sen. Joseph I. Lieberman (Conn.), an independent member of the Democratic caucus, who has ruled out supporting a public option in any form.

Lieberman said he has heard different variations of the OPM idea and remains unclear on the status of the trigger. But he warned: "If there's a trigger, I can't support it."

Despite lingering concerns, key uncommitted Democrats -- including Lieberman -- appeared to be warming to the legislation. Speaking at a news conference in which she announced a package of small-business amendments, Sen. Mary Landrieu (La.) declined to endorse the bill but spoke favorably of the public-option alternatives, describing both the OPM plans and the Medicare buy-in program as potentially beneficial.

Sen. Blanche Lincoln (Ark.) said she liked the OPM idea but sounded less certain about expanding Medicare. "You might find that other products offered in the exchange might be less costly," she said. "Medicare is a pretty good plan. So it might be expensive."

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