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Health-Overhaul Bill Faces Possible Delay as Cost Concerns Grow

Posted on 18 Jun 2009

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The Senate Finance Committee may postpone action on a health-care overhaul bill until July, a possible delay that comes as the potential costs of a revamp give Democrats pause and hand Republican opponents fresh ammunition.

Committee Chairman Max Baucus said yesterday lawmakers need more time to work on bringing the bill’s cost to below $1 trillion and to reach a bipartisan compromise on it. The Montana Democrat said he still believes the Senate can pass a plan next month, but it is unlikely his panel will draft and vote on it by the end of next week, before Congress’s week-long July 4 recess.

“It’s too soon to say when we’ll be ready,” Baucus said.

Senator Jon Kyl of Arizona said a committee delay may complicate efforts to pass a health-care plan in the Senate before Congress’s month-long August recess. “That was always an ambitious time frame,” said Kyl, the No. 2 Senate Republican.

President Barack Obama is pressing Congress to send him a final bill by October that would overhaul the health-care system to expand coverage to the approximately 46 million uninsured Americans and reduce soaring costs. White House spokesman Robert Gibbs said yesterday that Congress remains on track to pass a health plan in 2009.

Baucus spoke with reporters after members of both parties on the finance committee met behind closed doors. Meanwhile, Republicans on the Senate Health, Education, Labor, and Pensions Committee criticized the costs and policies of a health-care measure proposed by Democratic Senator Edward Kennedy of Massachusetts, the panel’s chairman. The Republicans also called on the committee to move slowly in debating the bill in order to achieve bipartisan support for it.

Kennedy’s Measure

“On a bill that affects 17 percent of the gross domestic product of this country, are we willing to sacrifice something that’s good for a timeline?” said Senator Richard Burr, a North Carolina Republican, as the health panel began two weeks of debate on Kennedy’s measure.

Democrats are advancing legislation that would require all Americans to have health insurance, limit insurers’ ability to deny coverage, create online exchanges for individuals to purchase policies and require employers to provide health benefits to workers or pay a penalty.

They also are weighing whether to expand coverage by creating a Medicare-like government program to compete with private insurers, or turn instead to non-profit cooperatives.

The finance committee’s delay doesn’t necessarily signal deep problems ahead for the legislation, said Martin A. Corry, director of federal health policy at Buchanan Ingersoll & Rooney, a Pittsburgh law firm. More important, he said, is getting legislation which lawmakers in both political parties view as good policy and will agree to.

‘Speed Bump’

“Getting it right rather than trying to get it right now is important,” said Corry, who is lobbying on the bill on behalf of hospitals, doctors and other health care providers. “If they can continue to work on a bipartisan basis, that improves the prospects of eventually getting a bill passed. It shouldn’t be seen as anything more than a speed bump right now.”

The task of crafting legislation became tougher this week when the nonpartisan Congressional Budget Office delivered an informal cost estimate for options before the finance committee. The estimated price tag was $1.6 trillion, said Senator Kent Conrad, a North Dakota Democrat.

The CBO also said portions of Kennedy’s plan would cost $1 trillion and would only expand coverage by 16 million people.

Gregg Criticism

Senator Judd Gregg, a New Hampshire Republican who sits on the health committee, said in a statement that the CBO report showed that the Kennedy proposal would create a “massive expansion of government that will put us on track to a government-run, single-payer plan.”

The CBO told Senate budget leaders two days ago that lawmakers must make tough choices in their health care legislation -- such as cutting payments to hospitals and doctors -- to avoid increasing the federal deficit, which it estimates will reach $1.8 trillion this year.

“The substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it,” the CBO said in a letter to budget leaders.

“Reality is biting them,” said Michael Franc, vice president of government relations at the Heritage Foundation, a conservative policy institution in Washington.


To the lower costs, Democrats might be forced to consider alternatives to the plan that they might have wanted to avoid, Franc said in an interview. “It might create an opening for an alternative way of skinning the cat,” he said.

Conrad said the finance committee is considering a variety of ways to reduce the cost of its plan to below $1 trillion. He said the costs could drop dramatically if members limit subsidies to lower-income Americans seeking insurance.

Conrad said the CBO’s estimates persuaded lawmakers that there is a big cost risk if too many people who get insurance through employers drop that coverage and instead buy coverage through online exchanges. He said senators want to find ways to prevent that.

The process “is being slowed down in order to get it right,” Conrad said.

Administration officials cast the delay in a positive light. At the White House, Health and Human Services Secretary Kathleen Sebelius said it was “good news” that Baucus and his committee will “stay at the table until they’re ready to produce a bill” that meets Obama’s goals of providing universal coverage, cost-reductions, higher quality of care and is deficit-neutral.

Financial Markets

Beth Mantz Steindecker and Ira S. Loss of Washington Analysis, a Washington-based political and economic advisory firm that examines the impact of policy on financial markets, said they expected lawmakers to overcome the obstacles they’re grappling with.

“We still think the odds favor passage of health-care reform sometime during the fourth quarter of 2009 or the first quarter of 2010, in spite of the two sizeable challenges of reaching an agreement on the public option and paying for this overhaul,” they wrote in an e-mail.

In the House, Democrats say their legislation is still on track. House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat, said yesterday that three House committees involved in the debate will release a detailed outline of their legislation as early as Friday. The legislation would likely be ready for consideration by the full House during the final week of July, Waxman said.

Week’s End

During the Senate health committee meeting, Senator Chris Dodd, a Connecticut Democrat, said the panel should complete its work by the week’s end. Dodd is acting as chairman for Kennedy, who is battling brain cancer.

Senator Jeff Bingaman, a New Mexico Democrat, complained that a full cost estimate hasn’t been reached on the measure because several sections, including one that may call for a government-run health plan, weren’t included. “It really puts us in a difficult situation,” Bingaman said.

Dodd said the bill would soon get a full cost estimate.

House Republicans yesterday outlined their plans for legislation, which would use tax deductions and tax credits to expand insurance coverage, change federal law to make it easier for people who change or lose a job to keep their coverage and allow dependents to stay on their parents’ health policies up to age 25.