By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Friday, December 25, 2009; A01
Senate Democrats approved landmark legislation just after sunrise Christmas Eve that would transform the nation's health-care system by requiring people without insurance to obtain coverage and protecting those who have it from the most unpopular private insurance practices.
Vice President Biden presided over the 60 to 39 party-line vote, described as a historic milestone by senators on both sides of the aisle. Despite the early hour, Democrats sat alert at their desks, exhausted but exuberant, savoring a victory that had eluded so many of their predecessors. "This is probably the most important vote that every sitting member of the Senate will cast in their tenure here," said Sen. Christopher J. Dodd (D-Conn.), one of the authors of the bill.
The toughest stretch may lie ahead as House and Senate leaders attempt to fuse their separate bills with their different approaches to providing coverage and paying for it. And Republicans vow to make the process as difficult as possible, in hopes of stopping the legislation.
President Obama delayed a family holiday trip to Hawaii until after the 7 a.m. vote was gaveled to a close. "Seven presidents have tried to pass comprehensive health insurance reform, seven presidents have failed" since Theodore Roosevelt proposed universal coverage in 1912, Obama noted in brief remarks before he left the White House. But no effort had ever come this distance.
"We are now finally poised to deliver on the promise of real, meaningful health insurance reform," Obama said. Once the House and Senate merge their bills, he added, "this will be the most important piece of social legislation since the Social Security Act passed in the 1930s and the most important reform of our health-care system since Medicare passed in the 1960s."
The Senate bill passed without a single GOP vote, after a 25-day floor debate marked by biting partisan rhetoric. As Democrats overcame divisions and closed ranks, accepting concessions to push the bill through, Republicans became fierce in opposition. Even Sen. Olympia J. Snowe (R-Maine) -- a moderate courted over many months by Obama -- responded "No," frowning when the Senate clerk called her name.
Republicans made one concession: They allowed the final vote to be moved up from evening to early morning, so senators and staff could travel home to spend Christmas with their families. But Minority Leader Mitch McConnell (Ky.) pledged that the battle will continue when Congress returns in January. "This fight is not over. This fight is long from over," he said. "My colleagues and I will work to stop this bill from becoming law."
The bills' scope is vast, but Democrats are counting on consumer-friendly provisions -- including some that would take effect right away -- as selling points to a skeptical public. In the Senate bill, sick uninsured people with preexisting medical conditions could immediately obtain private coverage through state-based high-risk insurance pools, and insurers could no longer deny coverage to children under age 18 with preexisting conditions. Small businesses with fewer than 25 employees would become eligible for tax credits to purchase insurance for their workers. Adults 26 years old or younger could remain on their parents' policies.
Six months after enactment of the plan, co-payments and deductibles on preventive services, including physical examinations, immunizations, and mammograms, would be eliminated for everyone. Insurers would be barred from dropping beneficiaries when they become sick and from imposing lifetime limits on coverage.
Throughout the nearly year-long debate, Republicans have counted as allies many of the same industry forces that helped to defeat health-care reform in the past. The insurance lobbying group America's Health Insurance Plans warned in a statement Thursday that the Senate bill would result in higher premiums and fewer coverage options. Medical-device manufacturers and home health-care providers fought provisions that would increase their costs. Virtually every major business group denounced reform as a threat to jobs and the health coverage that the majority of Americans receive through their employers.
But Democrats held advantages, too. The White House cut deals with drugmakers and hospital groups, effectively neutralizing two of the most formidable industry blocs. Two other health-care powerhouses, AARP and the American Medical Association, endorsed both the House and Senate bills.
Large Democratic majorities eased passage through both chambers, but to secure the votes needed, Senate Majority Leader Harry M. Reid (Nev.) and House Speaker Nancy Pelosi (Calif.) were forced to concede on major issues. Both bills include restrictions on abortion coverage, stipulations that infuriated liberals but were vital to winning over conservative Democrats. Reid dropped the government insurance option that was sought by liberals in his caucus but opposed by a few key moderates.
The big changes would come in 2014, when new state-based insurance exchanges would be established to serve people who do not have access to affordable coverage through their employers. Under the Senate bill, private health plans could offer policies through the exchanges, provided they meet certain requirements. At least two of those insurance plans would be nationwide and be administered by the Office of Personnel Management, the agency that oversees health benefits for federal workers.
The federal government would subsidize exchange-based coverage for individuals and families with incomes between 133 percent and 400 percent of the federal poverty level, or the equivalent of $29,326 to $88,200 per year for a family of four.
Virtually all non-elderly people with incomes below 133 percent of the poverty level would become eligible for Medicaid, representing a major expansion of the low-income program. The federal government would pick up about 90 percent of Medicaid expansion costs, compared with about 57 percent of Medicaid benefits under current law, with states paying the remainder.
The coverage mandate also would take effect in 2014, and those who can afford to buy coverage but don't would face a financial penalty. Employers with more than 50 workers and do not provide coverage would be subjected to fines.
The package would make sweeping changes to Medicare, the federal health program for people over 65, with the aim of using the nation's largest insurance plan to force doctors, hospitals and other private-sector players to deliver care more efficiently and at a lower price. The program would immediately begin experimenting with a variety of reforms, such as asking some hospitals and nursing homes to treat certain conditions for a single, bundled payment rather than charging separately for each service. Federal health officials would be given the authority to quickly expand any Medicare pilot program that is shown to reduce costs.
Medicare Advantage, a form of Medicare provided by private insurance companies to about 11 million seniors, would lose nearly $120 billion over the next decade, likely forcing providers to drop popular add-on benefits such as gym memberships. Traditional Medicare customers would also see changes, particularly in the prescription drug program. While high-income seniors would have to pay more for drug coverage beginning in 2011, the Senate bill takes immediate steps to reduce a gap in coverage known as the doughnut hole.
Next year, the coverage gap that forces seniors to pay the full cost for the drugs once they have reached a certain limit would be narrowed by $500. Seniors in the doughnut hole would get a 50 percent discount on brand-name drugs through a deal cut with drug manufacturers.
Senate Finance Chairman Max Baucus (D-Mont.), a co-author of the bill, said House and Senate leaders would begin talking by phone next week, but weary aides predicted that detailed work on merging the two bills is likely to wait until after Jan. 5, when key House leaders return. The goal is to complete the process before Obama delivers his State of the Union address in late January or early February.
In addition to resolving the flashpoint issue of abortion coverage, which the House and Senate bills address differently, negotiators plan to explore further steps to make insurance more affordable. House leaders said they would press for more generous subsidies for low- and middle-income Americans, a greater expansion of Medicaid eligibility and a single national insurance exchange managed by federal officials, rather than the 50 separate state-run marketplaces that the Senate would establish.
Negotiators also must resolve a long-simmering dispute over how to pay for the package, with the House pushing a surtax on millionaires and the Senate advocating new levies, including 40-percent tax on high-cost insurance policies that economists say would help drive down the cost of health care.
When Congress left for the August recess, Democrats lost momentum on health care, when conservatives denounced the effort at town-hall meetings as a move towards socialized medicine. Polls have shown declining support for health-care reform, but over Christmas, Democrats said they expect voters to reconsider.
"I believe that the negativity that Leader McConnell and others have continually displayed on the floor has peaked and now," said Sen. Charles Schumer (D-N.Y.). "When people learn what's actually in the bill and all the good it does, it is going to become more and more popular."