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Showdown Set for Health Bill As Senate Unveils Its Version

Source: WSJ

Posted on 19 Nov 2009

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Senate Majority Leader Harry Reid set the stage for a climactic debate in the Senate over health care by unveiling a 10-year, $848 billion bill that would extend insurance to 31 million Americans without coverage.

Mr. Reid's proposed legislation, 2,074 pages, is the Senate's answer to a bill that narrowly passed the House Nov. 7. The two bills have differences on taxes, abortion coverage and a public-insurance plan and would require considerable work to reconcile if Congress hopes to pass some form of health care overhaul -- the centerpiece of President Barack Obama's domestic agenda.

The Senate bill needs 60 votes to proceed to a floor debate, and Mr. Reid is expected to call a vote later this week, perhaps Saturday if not sooner. If the tally gets to 60 -- which was still uncertain Wednesday, though Senate Democrats showed increasing confidence -- that would open perhaps the most critical period of legislative action on American health care since Congress created Medicare in the 1960s. The debate would end with a vote on the bill by the full Senate. Nearly every Republican in Congress still opposes the overhaul effort, and there are still sharp disputes among Democrats about central provisions.

"This is yet another trillion-dollar experiment, but it is not what Americans bargained for," said Senate Minority Leader Mitch McConnell (R-KY.

One swing Democrat, Sen. Ben Nelson of Nebraska, said he still has a range of concerns but suggested he might at least be willing to begin debate. "If you don't like the bill, then why would you block your own opportunity to amend it?" he said. Two other Democrats on the fence, Sen. Mary Landrieu of Louisiana and Sen. Blanche Lincoln of Arkansas, remained noncommittal Wednesday evening.

The nonpartisan Congressional Budget Office estimated the bill would ensure that 94% of those living in the U.S., not counting illegal immigrants, have insurance coverage. CBO previously estimated about 83% of Americans now have insurance.

In a boost for the bill's prospects, the CBO estimated the Senate measure would reduce the federal budget deficit by $130 billion over the next decade, and additional amounts over the second 10 years of the program. It achieves that in part through a new Medicare payroll tax and a tax on high-value insurance plans, which has aroused strong opposition.

The $848 billion cost is below the $1.05 trillion cost of the health overhaul passed by the House this month, and the prospect of additional deficit reduction may raise chances fiscally conservative Democrats will back the package. But the figures aren't likely to win over Republicans, who say the bill adds costly new benefits for some Americans as the federal debt reaches new heights.

If Mr. Reid is able to bring the bill to a floor debate, the first weeks of December are likely to be devoted to amendments. The majority leader would need another 60-vote majority to conclude the debate and bring the bill for a final vote. If successful, he would then have to reconcile it with the House bill before it could go to President Obama's desk.

As with the House bill, the uninsured are likely to be the biggest winners from the Senate bill. It would offer subsidies to help people buy insurance and sharply expand Medicaid, the federal-state health-insurance program for the poor. Losers include the wealthy, who would have to pay higher Medicare payroll taxes, and people with especially generous health-insurance benefits, who would also pay a new tax.

The Senate legislation comes down mostly on the liberal side on the question of a new government-run health-insurance plan or "public option," a flashpoint in the debate so far. It would include a public option, but unlike the House version, states would have the option of not participating. As in the House, the Senate plan would have the public plan negotiate payment rates directly with health-care providers, rather than tying payments to Medicare's low rates. Those were concessions to centrists worried about government's footprint in the private sector.

President Obama said the legislation would help fix the problems of rising insurance premiums, increasing medical costs and the instability felt by those who lack insurance. "We're closer than ever to enacting solutions to these problems," he said.

"Tonight represents the last leg of this journey we've been on for a while now," Mr. Reid said. He met Wednesday with Vice President Joe Biden, and many Democrats voiced hope the majority leader will be able to secure the votes needed to overcome Republican opposition and move to the debate.

"We're going to clear the hurdles," said Massachusetts Sen. John Kerry. But the outcome remains uncertain. "I'm not going to assume a single vote," said Illinois Sen. Richard Durbin, the Democratic whip.

Still to be fought out is the issue of abortion. The Senate bill provides wider insurance coverage for abortion than the House legislation. Among other things, the Senate's proposal would allow women who receive government subsidies to buy insurance to enroll in a plan that covers abortion, while the House bill would bar that. Sen. Orrin Hatch (R., Utah) said he wanted to force the Senate to vote on whether to adopt the House limits. "We'll have a major debate," he said.

Funding the bill is proving troublesome. Mr. Reid decided to pare back a proposed tax on high-value insurance plans, bowing to liberal and union complaints that the measure would hit middle-class families. Under his proposal, the tax would fall on plans valued at more than $23,000 for couples, up from $21,000 in legislation written by the Senate Finance Committee. The tax was estimated to raise $149 billion over ten years, far less than earlier envisioned.

To help make up for the lost revenue, Mr. Reid inserted a provision that would raise Medicare payroll taxes on couples with income of more than $250,000 a year. For those families, the levy would be raised to 1.95%, up from 1.45%. Overall, the proposal would bring in $54 billion over ten years. Mr. Reid is also proposing a new tax on elective cosmetic surgery, generating $5 billion.

Both the House and Senate bills make hundreds of billions of dollars in proposed cuts in spending on Medicare. But the two chambers differ on how to raise revenue. The House legislation relies largely on an income surtax on the wealthy. The Senate bill would raise money across a range of health care sources.

Nearly every American would be required to obtain insurance, either through work, the newly created exchange or some other program. Low and middle income individuals and families would in many cases qualify for government assistance, such as the new tax subsidies that would be created. But if they chose not to obtain insurance, they could face a penalty up to $750.

To help ease the financial burden on workers, Mr. Reid lowered the maximum amount the bill would require them to spend on premiums, capping premiums at 9.8% of income, down from 12%.

Under the Senate bill, the employer-provided health insurance system would still continue. But any company that decided not to cover its workers would have to pay a fine to help cover the government's cost of covering those individuals.