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Final Piece of Health Bill Hits Snag

Source: WSJ

Posted on 25 Mar 2010

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The last piece of President Barack Obama's remake of the nation's health-care system hit a parliamentary snag early Thursday in the Senate, and will be headed back to the House for one final vote before becoming law, a spokesman for Senate Majority Leader Harry Reid (D., Nev.) said.

The legislation makes a handful of changes to the sweeping health bill, including bolstering government subsidies to help individuals purchase health insurance and closing a politically unpopular gap in prescription-drug coverage under Medicare, the health insurance for seniors.

The measure has been debated in the Senate since Tuesday, and Democratic leaders had hoped to conclude Senate action Thursday.

The most significant change, however, would be the method of financing the overhaul. A new 40 percent excise tax on high-cost insurance policies would be delayed until 2018 and replaced by a new tax on the nation's highest earners. Families earning more than $250,000 a year would for the first time have to pay a 3.8 percent Medicare payroll tax on capital gains, dividends and other investment income.

But Reid spokesman Jim Manley said Republicans have found two minor provisions in the bill—totaling no more than 16 lines—that are likely to be subject to procedural challenges on the floor, and ultimately struck from the legislation. If successful as expected, the Republican challenges would modify the bill, requiring it to be sent back to the House for consideration again.

"After hours of scrubbing the bill, this is the best they can come up with," said Mr. Manley, adding he expects the House to rapidly clear the bill for Mr. Obama's signature. "I'm confident this can be addressed quickly in the House," he said.

Under the Senate's complicated parliamentary rules, the legislation at issue can't carry provisions that are unrelated to federal budget matters. The provisions at issue have been found to violate those rules, congressional aides said.

One provision is technical language with no substantive importance, aides said. The other provision is intended to shield recipients of government Pell Grants, which benefit low-income college students, from the ebb and flow of changes in federal spending. The Pell Grant provision is in the bill because the health legislation also makes changes to the federal student-loan program.

The student-loan measure—swept into the health legislation by lawmakers over the last few weeks—would end government subsidies to banks and shift the lending responsibilities to the federal government. The change would save tens of billions of dollars over the next decade, much of which would be plowed back into increased support for community colleges, historically black colleges and Pell Grants.

Under an agreement, the Senate is expected to conclude action on the final piece of the Obama health bill by 2 p.m. Thursday. Several more amendments are likely to be debated before a final vote, in addition to the expected Republican procedural challenges.

Pending on the Senate floor is the smaller bill—sometimes called the "sidecar" bill—that moved through the House last weekend alongside broader legislation that makes the biggest changes to the nation's health-care system in a generation, providing near universal health insurance coverage. The broader bill was signed into law Tuesday by Mr. Obama.

Taken together, the combined bills would create a 10-year $938 billion health program, according to the latest estimate by the nonpartisan Congressional Budget Office.

The legislation would provide tax breaks and subsidies to help small businesses and individuals purchase insurance, create state-based marketplaces to spur competition among insurers and bar insurers from engaging in a range of practices that critics contend have created gaps in coverage across the nation, including denying coverage because of preexisting conditions.

The CBO estimates 32 million Americans would receive coverage by 2019, representing 94% of legal residents.

The legislation is financed by a range of new taxes and fees, including a levy on high-value insurance plans and reductions in Medicare payments to doctors and hospitals.

The smaller "sidecar" package was pieced together as part of an effort by Democratic leaders to build support in the House for the larger bill.

Among other things, the "sidecar" legislation would delay the effective date of a new tax on high-value insurance plans, pushing implementation back to 2018 from 2013. The legislation would close an unpopular gap in prescription-drug coverage under Medicare, the health insurance program for seniors, and it would raise the value of federal subsidies that will help low- and moderate-income families purchase insurance. The measure also strips out a number of special deals cut by senators—such as added health spending for Nebraska—that had stirred public outrage and sowed doubts about Democratic efforts to push the bill through Congress.

The Senate debate has had none of the vitriol that defined the final hours of House action. But Republicans and Democrats have sparred sharply at times. And in a near round-the-clock session, Democrats were forced Wednesday and early Thursday to beat back a blizzard of Republican amendments, more than two dozen in all, including a proposal to overturn a plan to impose the Medicare payroll tax on the investment income of wealthy individuals.

"We need to get beyond this," said Mr. Reid.

"We're not giving up," said Senate Minority Leader Mitch McConnell. The Kentucky Republican said the legislation pending in the Senate would make the new health-overhaul law "even worse," and worked to stall action. "The administration and some in Congress would like to think this debate is over. They want the American people to sit down and quiet down," he said.

The maneuvering on Capitol Hill comes as the president is expected to travel Thursday to Iowa City, Iowa, to tout proposals signed into law this week that will benefit small businesses and families, helping them defray health-care costs.