Obama to Appeal to Public on Health Care as Senate Struggles

By Kristin Jensen and Nicole Gaouette

June 22 (Bloomberg) -- President Barack Obama will take his case to the American people this week on a plan to overhaul the U.S. health-care system as Congress struggles to find a bipartisan way to approve his top domestic priority.

Obama invited the ABC television network to broadcast from the White House on June 24 and will take health-care questions from the public in the East Room. Three House panels will hold hearings during the week, and Senate Finance Committee Chairman Max Baucus is rushing to finish draft legislation before Congress starts a weeklong recess on June 29.

The president is raising his profile on the issue after Baucus last week warned he may not be able to get a committee vote until next month, and government cost estimates sparked concern among lawmakers in both parties. Unresolved legislative issues are trumping public support for the revamping of a system that makes up 17 percent of the world’s largest economy.

“Clearly, the optimism of health-care proponents was off the mark,” said Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey. Zelizer said Obama faces many of the issues that killed a similar effort in 1993 by President Bill Clinton. “Does it mean defeat? Not at all. But the next few months remain a huge challenge.”

Obama is pressing Congress to send him a final bill by October that would expand coverage to the approximately 46 million uninsured and reduce soaring costs.

‘All-Out Effort’

Former Republican Senate Majority Leader Bob Dole warned that the overhaul has to get done this year before the 2010 congressional elections stall work on Capitol Hill. He said Obama must step up his presence instead of relying on Senate Majority Leader Harry Reid, a Nevada Democrat, and House Speaker Nancy Pelosi, a California Democrat.

“It has to be an all-out effort,” Dole told reporters on June 17 after unveiling his own bipartisan proposal with Democrat Tom Daschle, another former Senate majority leader.

“You can’t just turn it over to Harry Reid and Nancy Pelosi and Boehner and McConnell,” Dole said, referring to Republican leaders John Boehner of Ohio in the House and Mitch McConnell of Kentucky in the Senate.

Obama in Primetime

The ABC coverage will bring Obama’s efforts to primetime after a speech to the American Medical Association on June 15 and a town hall-style meeting in Green Bay, Wisconsin, on June 11. During both, he said the U.S. needs more efficient care.

“We have the most expensive health-care system in the world,” Obama said on June 11. “We’re not any healthier for it.”

In recent days, Obama hailed as a “turning point” the announcement that drugmakers agreed to spend as much as $80 billion over 10 years to help elderly Americans afford medicine.

Baucus spent months, with the participation of the Obama administration, negotiating the arrangement to aid seniors in Medicare’s prescription-drug program. The companies will discount brand-name medicines as much as 50 percent, according to PhRMA, the Washington-based industry trade group that represents such drugmakers as New York-based Pfizer Inc.

There are still plenty of thorny issues left. Lawmakers are wrestling with whether to create a new public insurance program or use nonprofit cooperatives to compete against private insurers such as UnitedHealth Group Inc. The possibility of mandates on employers also is drawing fire from Republicans.

CBO Estimate

And the Congressional Budget Office may have thrown off the schedule for the legislative effort when it estimated that options under consideration by the Senate Finance Committee would cost $1.6 trillion. Baucus, a Montana Democrat who wants to bring the expense below $1 trillion, said his committee probably wouldn’t vote until after the July 4 recess.

Arizona Senator Jon Kyl, the No. 2 Senate Republican, said the delay meant the Senate probably wouldn’t pass a plan before a monthlong recess in August.

Pelosi was open about her frustration.

“The CBO will always give you the worst-case scenario on one initiative and never a best case,” she told reporters on June 18, referring to the nonpartisan budget committee, whose cost projections may make or break the legislation.

The House released an outline of its bill on June 19, calling for a government-run insurance option for consumers and a requirement that employers either offer coverage or pay a penalty equal to 8 percent of their payroll. The measure would cover at least 95 percent of Americans, House leaders said. The lawmakers provided few details on how to pay for it.

Insurers Climb

The cost estimate, possible delay and talk of compromise all heartened investors in insurers, who have the most to lose if the U.S. moves toward public coverage.

The Standard & Poor’s 500 sub-index of six managed-care companies gained 8.8 percent last week in New York trading, led by Cigna Corp. of Philadelphia.

Goldman Sachs Group Inc. analysts in New York wrote on June 19 that they now see “a higher likelihood for a less expansive, more bipartisan version of health-reform legislation.” They raised price targets for Cigna, Coventry Health Care Inc. of Bethesda, Maryland, UnitedHealth of Minnetonka, Minnesota, Humana Inc. of Louisville, Kentucky, Health Net Inc. of Woodland Hills, California, and Aetna Inc. of Hartford, Connecticut.

Senate legislation is running on two tracks, with another version under consideration by the Health, Labor and Pensions Committee, run by Connecticut Senator Christopher Dodd as Chairman Edward Kennedy battles brain cancer.

A draft written by Kennedy would require all Americans to have insurance, create online “gateways” for people to compare and purchase insurance policies, and require insurers to take all applicants.

‘Massive Debt’

The CBO estimated that a portion of the Kennedy plan would cost $1 trillion and expand coverage by only 16 million people. Republicans protested the price tag.

“We don’t want to add another trillion dollars to the most massive debt in history,” Arizona Senator John McCain told the committee on June 17.

Lawmakers have to craft details on a provision known as “pay or play,” which would require employers to provide coverage to workers or contribute to the cost. Republicans say this would burden many employers, especially small businesses.

“The whole enchilada comes down to ‘pay or play’ and a public plan,” said Senator Johnny Isakson, a Georgia Republican on the committee.

Once the health committee bill is completed, it will be melded with the finance panel’s legislation.

White House spokesman Robert Gibbs said the delays aren’t surprising. “The president isn’t pessimistic about being able to get this through Congress this year,” Gibbs told reporters on June 18.

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Nicole Gaouette in Washington at ngaouette@bloomberg.net

Last Updated: June 22, 2009 00:01 EDT

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