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House, Senate remain divided over key issues in health bill

By Lori Montgomery
Washington Post Staff Writer
Tuesday, January 12, 2010; 9:12 PM

House and Senate leaders will meet with President Obama on Wednesday to try to reconcile differences over the shape of health care legislation. But the two houses of Congress remain at odds over fundamental issues, including the cost of the package and subsidies for the uninsured, aides said.

Given the difficulty Senate Democrats had in passing the legislation over Republican objections, House leaders are under intense pressure to adopt many of the Senate's provisions.

House leaders have already conceded defeat on creation of a government-run insurance plan, a top priority of House liberals that was rejected in the Senate. And Obama last week endorsed one of the Senate's most contentious provisions: a 40 percent excise tax on high-cost insurance policies that is deeply unpopular with labor and many House members.

Late Tuesday, House Speaker Nancy Pelosi (D-Calif.) acknowledged the president's desire for a tax on high-cost policies, which many economists believe will help drive down skyrocketing health care costs. But she told reporters that she has not given up hope of winning some version of the House's proposed surtax on the wealthy, calling it "the best pay-for that we've heard so far."

House leaders are also pushing hard for the creation of a national marketplace for insurance, known as an exchange, in lieu of the Senate's plan to permit every state to establish its own marketplace for people who lack access to affordable coverage through an employer. Though some key Senate moderates dislike the idea, Pelosi on Tuesday called a national exchange "essential to having a workable plan."

Negotiators for both chambers have been working virtually around the clock to resolve their differences, and aides say a broad framework for compromise is beginning to emerge. House leaders, and union officials, have signaled that they might be willing to accept a tax on high-cost insurance plans if the exemption for the tax were set high enough. The lost revenue would be replaced by some version of a tax on the wealthy, aides said.

Negotiators are also working to reach agreement on the overall cost of the package, aiming to split the difference between the two chambers. The Senate bill would cost $871 billion over the next decade, while the House proposes to spend $1.05 trillion.

Much of the increased spending would go toward more generous subsidies for low- and middle-income Americans who cannot afford to buy insurance through their employer or who are not offered that option.

With Obama scheduled to address House Democrats on Thursday, White House officials are pressing for a quick resolution to talks between the two chambers. But lawmakers say they are unlikely to wrap up their work on health care before early February, a prospect that has complicated Obama's plans for delivering his first State of the Union address and his second budget request. So far, a date for the president's speech, normally delivered in late January, has not been set. And key lawmakers have been told that the president's budget, due on the Hill by Feb. 1, could be delayed.

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