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Deal on health bill is reached

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Sunday, December 20, 2009; A01

Senate Democrats said Saturday that they had closed ranks in support of legislation to overhaul the nation's health-care system, ending months of internal division and clearing a path for quick Senate passage of President Obama's top domestic policy priority.

Majority Leader Harry M. Reid (D-Nev.) secured the pivotal 60th vote after acceding to the demands of Sen. Ben Nelson (D-Neb.) for tighter restrictions on insurance coverage for abortions, along with increased federal aid for his home state and breaks for favored health-care interests.

"Change is never easy, but change is what's necessary in America," Nelson said at a morning news conference, announcing his support as a snowstorm raged outside.

Speaking at the White House, Obama said it appears that a vote is certain on a bill that would provide coverage to more than 30 million uninsured Americans. "After a nearly century-long struggle, we are on the cusp of making health-care reform a reality," said Obama, who had dispatched senior administration officials to help lock down Nelson's support.

Republicans excoriated the bill as a threat to Medicare -- cuts to the program for the elderly would offset much of the cost -- and to the employer-based insurance system, which provides health coverage to most Americans.

"This bill is a monstrosity," said Minority Leader Mitch McConnell (R-Ky.). "This is not renaming the post office. Make no mistake -- this bill will reshape our nation and our lives."

GOP leaders, who have vowed to use every available tactic to keep the measure from advancing, invoked a rarely used Senate rule to require that the entire 383-page package of amendments introduced by Reid Saturday morning be read aloud on the floor, a process that consumed about seven hours.

But Republicans were running out of options in their quest to derail the overhaul. Securing Nelson's support allows Reid to maneuver the legislation through a complex parliamentary minefield without obstruction. A bloc of 60 votes is the exact number required to choke off the filibuster, the Senate minority's primary source of power, and the GOP's best hope of defeating the bill.

Unless the GOP yields and the vote comes sooner, the bill is expected to pass in a final Senate vote at 7 p.m. on Christmas Eve. Negotiations to merge the bill with the House version would begin early next month.

Many liberals, however, were bitterly disappointed with the bargains Reid struck to win support from moderates in his caucus, any member of which could demand alterations in exchange for his or her support.

Democratic leaders dropped a government insurance option and the idea of expanding Medicare to younger Americans. Reid also omitted language that would have eliminated the federal antitrust exemption for health insurers -- another nonstarter for Nelson.

Savings forecast

Congressional budget analysts reported Saturday that the revised package would not worsen the nation's fiscal situation, as GOP critics have warned. The analysts said the updated Senate bill would spend $871 billion over the next decade to extend coverage to the uninsured by dramatically expanding Medicaid and by offering federal subsidies to those who lack affordable coverage through employers.

Those costs would be more than covered by nearly $400 billion in new taxes over the next decade and by nearly $500 billion in spending reductions, primarily cuts to Medicare, the federal health program for people 65 and older. All told, the package would reduce federal budget deficits by $132 billion by 2019, according to the nonpartisan Congressional Budget Office.

Over the long term, the analysts predicted, the package could reduce budget deficits even more sharply, slicing as much as $1.3 trillion from projected deficits between 2019 and 2029. That would represent a significant improvement in long-run savings compared with the bill approved by the House and a measure previously crafted by Reid.

Democratic leaders worked for days to hammer out a deal with Nelson. They reached a tentative agreement late Friday night. Under the deal, states could choose to prohibit abortion coverage in plans offered through insurance exchanges that the bill would set up for people who lack coverage through their jobs. The compromise is less restrictive than the abortion language contained in the House bill.

Nelson also secured full and permanent federal funding for his state to extend Medicaid eligibility to everyone below 133 percent of the federal poverty level. The bill would require all states to do so, but Nebraska alone would not be required to pay a portion of the additional cost after 2016. And he won concessions for some nonprofit insurers and for providers of supplemental Medicare coverage from a new insurance tax, and he was able to roll back cuts to health savings accounts.

Other Democrats also won important changes. Reid added $10 billion for community health centers to provide services to low-income people. That funding had been a top priority for Sen. Bernard Sanders (I-Vt.), a liberal champion of the public option.

Insurance provisions

The revised Senate bill would require every American for the first time to obtain insurance or face a financial penalty for failing to do so. Those without access to affordable coverage through an employer would be eligible to apply for federal subsidies and shop for coverage in the new state-based exchanges, starting in 2014.

The legislation would allow private firms for the first time to offer insurance policies to all Americans across state lines on the exchanges. Those plans would be negotiated through the Office of Personnel Management, which handles health coverage for federal workers and members of Congress.

Starting immediately, insurers would be barred from denying coverage to children with preexisting conditions. A total ban on the practice would take effect in 2014. Lifetime limits on coverage would be banned, and annual limits would be restricted until 2014, when they, too, would be banned entirely.

Insurers would be required to justify rate increases, and patients would have the right to appeal denials of claims to an independent state board. All insurance companies would be required to spend at least 80 cents of every dollar they collect in premiums on delivering care to customers.

All but the smallest employers would face fines of as much as $750 per worker if even one employee sought federal help to buy a policy. But at the behest of other Democratic skeptics, including Sens. Mary Landrieu (La.) and Blanche Lincoln (Ark.), Reid made changes to offer additional assistance to small businesses.

To appease fiscal conservatives, Reid strengthened cost-containment provisions by expanding the scope of an independent Medicare advisory board, empowering it to implement cuts if costs grow faster than an inflation-based target after 2019.

The package would rely on nearly $400 billion in new taxes, including a 10 percent tax on indoor tanning salons to be paid by the customer, and an increase in the Medicare payroll tax for people earning more than $200,000 a year and families earning more than $250,000.

And the majority leader rewrote a proposed fee on insurance companies to exempt nonprofit firms that spend at least 92 percent of premiums on medical service, a change that would benefit firms in Michigan and Nebraska. That change, made at the request of Nelson and Sen. Carl M. Levin (D-Mich.), seeks to identify and reward "good actors," Senate aides said.

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