Health Care: What Comes NextJane Sasseen
So now what?
After months of debate, the Senate Finance Committee chaired by Senator Max Baucus (D-Mont.) finally passed a version of a bill to overhaul the U.S. health-care system. The final tally for the Baucus bill, 14-9, came with a much-needed boost from Senator Olympia Snowe (R-Maine), who joined 13 Democrats on the committee to back the proposal and send it on to the full Senate for consideration. With five separate health-care bills now pending before Congress—two in the Senate, three in the House of Representatives—Snowe became the first Republican to cross the line and throw her support behind the reforms that are central to the Democratic agenda.
The vote moves President Barack Obama and the Democratic Congress a huge step closer to achieving something close to comprehensive health-insurance coverage for most Americans and filling some of the biggest holes in the current insurance system. The Senate Finance bill, which would cost $829 billion over 10 years, would require most Americans to have health insurance; in return, insurers would no longer be able to turn down applicants with pre-existing conditions or to charge higher rates for the sick or elderly. Those who could not afford coverage would get subsidies.
The vote left many Democrats convinced that after months of tough slogging, a victory is near in their decades-long quest to bolster coverage for a majority of Americans.
"We're close enough to the finish line that this will happen; all along there has been broad consensus among Democrats that we should pass reforms this year," says Bruce Reed, head of the centrist Democratic Leadership Council (DLC) and co-author with White House Chief of Staff Rahm Emanuel of The Plan: Big Ideas for Change in America. "There are now far fewer moving parts and thorny issues to reconcile than when the process started."
Much Work Remains In remarks from the White House Rose Garden, President Obama said the Senate Finance bill "is not perfect." But he added that the bill "goes a long way towards offering security to those who have insurance, and affordable options for those who don't. It reins in some of the worst practices of the insurance industry, like the denial of coverage due to pre-existing conditions. It also sets up an insurance exchange that will make coverage affordable for those who don't currently have it." And he noted that, according to an estimate by the Congressional Budget Office, it will not add to the federal deficit.
But even as supporters celebrated, it was clear that plenty more work remains to be done before a bill can be delivered to the President's desk.
Snowe herself made no bones about that in remarks delivered to the Finance Committee just before the vote. Despite intense negotiations, she still remains unhappy with some of the particulars of the bill. Nevertheless, she told her fellow Senators, she would vote to keep the bill moving as part of her commitment "to continue working the process."
She's not the only one not fully pleased. Democrats and Republicans alike are fond of saying that both sides agree on roughly 80% of the bill. Indeed, even industry trade groups opposed to much of what congressional Democrats have proposed—such as the U.S. Chamber of Commerce and America's Health Insurance Plans, the health-insurance lobby—agree on many of those same points. The problem, of course, is that all of the most difficult and politically charged issues are in the remaining 20% that has yet to be resolved.
Trying to Find a Compromise To take only the most contentious issue, liberals in the House and in the Senate continue to insist they won't back any bill that doesn't contain a public insurance option—that is, providing consumers the choice of a government-backed insurance plan. Meanwhile moderates and fiscally conservative Democrats in the Senate—never mind moderate Republicans—say they'll vote against any legislation that does contain a public plan.
That means a compromise is likely that will allow for something that can loosely be considered a public option, even if it isn't the full-on Medicare-style program that many liberals would like. One option, of course, is contained in the Baucus bill: It allows for the creation of insurance exchanges that would make it easier for individuals and small businesses to buy insurance. Others have suggested more robust co-op programs. And many expect Snowe to offer up an amendment that would create a "trigger" to create a more expansive Medicare-style, government-managed insurer in several years if health-care costs don't come down and affordability doesn't improve.
Funding, too, remains a huge issue. While the House bills depend heavily on surcharges on wealthy individuals to pay for the expansion of care, the Baucus bill would rely heavily on taxing insurance companies that offer so-called "Cadillac plans"—extra generous, expensive plans—to fund its proposals. The goal is also to reduce the use of such plans, which economists believe lead to excessive spending on health care. In fact, that remains one of the few elements remaining in the Baucus bill that could help rein in excessive health-care spending. But taxing such plans is anathema to many Democrats and their union backers, whose members tend to have more generous plans than the average worker. This will be the object of an enormous fight, with little clear sign yet as to who will prevail.
"Revenue raisers are key to all this," wrote Daniel Clifton, the Washington policy analyst for institutional broker Strategas Research Partners, in a report sent to clients hours before the Senate vote. "There is no agreement between the two chambers on the big provisions."
Combining All Those Bills The first order of the day will be for each chamber of Congress to merge its separate proposals into one. In the Senate, the more liberal bill passed weeks ago by the Health, Education, Labor, and Pensions Committee will have to be combined with the Finance Committee proposal. In the House, Speaker Nancy Pelosi (D-Calif.) has already begun negotiations to combine the three bills that came out of different committees. All three of those bills are far more liberal than what the Senate Finance bill contains, most clearly in their backing for a public insurance option.
That should make for plenty of political theater around what is and is not acceptable. Many business groups opposed to various elements of the plan are also likely to intensify their efforts to modify it more to their liking. "Although it was the best effort to date, the Senate Finance Committee missed an opportunity to create a truly bipartisan bill to reform our nation's health-care system," said Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce, in a statement released soon after the vote. "As the Senate Majority Leader begins to reshape this bill behind closed doors, it is our sincere hope that he considers the impact this legislation could have on the business community.
"One of the primary goals of health-care reform is the overriding need to reduce ever-escalating costs for both consumers and employers. The Senate Finance bill increases premiums, raises taxes, and creates a new entitlement that will add to the nation's growing debt."
The DLC's Reed and others expect each chamber to come up with a unified bill within several weeks. Then Pelosi and Senate Majority Leader Harry Reid (D-Nev.) will have to battle it out to come up with a combined bill; then both houses of Congress have to vote it through. But at the end of the day, most analysts believe the bill that eventually emerges from the negotiations will most closely resemble the Senate Finance bill and that many of the more liberal preferences will be stripped away.
The reason? The Finance Committee bill meets the President's demand that the full tab come in under $900 billion and that it not add to the deficit. More important, it's the only bill that has even a vestige of bipartisan support. Even if no other Republicans sign up, keeping Snowe on board as the bill moves forward will be critical. In part, that's because her concerns—which have primarily focused on making sure insurance will be affordable for lower- and middle-income families, particularly if buying coverage becomes mandatory—mirror the concerns of many moderate Democrats.
A Timid Bill in the End? Just as important, 60 votes will be needed on a host of amendments and procedural issues as the bill moves forward in the months ahead. With Senator Robert Byrd (D-W. Va.) in ill health, Snowe's extra vote could provide the needed margin if he is unable to attend.
"The broad outlines of the Senate Finance bill will look the closest to the final outcome," says Teddy Downey, a policy analyst with the Washington Research Group. Snowe's support, he adds, will not only give her leverage to keep things moving in the direction she wants, "it will give Baucus, and the White House, leverage to say their bill is the only path to 60 votes."
That means the odds remain good that a bill will pass. Despite the multiplying threats to back out if a public option is, or isn't, included, few think recaltricant Democrats would be willing to take the political risk of jeopardizing success and the potential electoral rewards in November 2010 of delivering on the long-sought goal, even if they don't get all they want. "People need to remember that it's more important to get this done than hold out for a perfect bill," says Reed. "We'll have the opportunity to fine-tune it in the coming years."
But it also means the odds are good that whatever compromise finally emerges will be far more timid than many had originally sought. The bottom line, says Gregory Valliere, the chief policy strategist for Soleil Securities: "The left will grumble, a House-Senate conference could be difficult, but a modest bill probably will win enactment late this year."
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.