Baucus bill may be far from final word

By Carrie Budoff Brown
|  Saturday, Oct 3, 2009  |  Updated 8:45 AM CDT
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Baucus Bill May Not Be the End of the Health Care Debate

AP

Two weeks, 130-plus amendments and the final gavel came down at 2:15 a.m. Friday.

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Two weeks, 130-plus amendments and the final gavel came down at 2:15 a.m. Friday.

But the Senate Finance Committee didn't even come close to finishing work on health reform.

Chairman Max Baucus (D-Mont.) may have brought Congress closer than it ever has been to passing a comprehensive bill but the list of unresolved issues is long and complex, with a final committee vote not expected until next week.

Yet even before the vote, the process of overhauling the nation's $2.5 trillion health care system has already begun to move to the discreet backrooms of the Capitol, where Senate Majority Leader Harry Reid (D-Nev.) will begin huddling next week with other top Democrats to meld two competing Senate bills.

And for some senators, that's where the real action is.

For all the build-up to the Baucus markup, many senators decided to hold their fire in the conservative-leaning Finance Committee. They kept their favored amendments out of the fray in hopes they'd have a better chance when the bills are merged, or on the floor of the Senate, or even in the House-Senate conference.

That has given the Baucus bill a feeling of being far from the final word.

So, no public option in the Finance bill? That's fine, says Sen. Chuck Schumer (D-N.Y), who believes his best shot is during the conference committee, even though he still lacks 60 votes for a plan.

The employer mandate, also not in the Baucus bill? Sen. John Kerry (D-Mass.) punted on this idea in Senate Finance but says he'll bring it back. He wants to require employers to offer insurance, or pay a tax penalty - an idea that also should get a more receptive audience in the conference committee since the House bill includes such a mandate. 

Sen. Robert Menendez (D-N.J.) wants to boost the insurance subsidies for low- and moderate-income individuals, but other affordability measures took precedence in the Finance Committee. This is a key goal of President Barack Obama and Democrats, but it could push the price-tag well beyond $900 billion, the ceiling set by the White House. Menendez has said he'll still press on.

Another significant fight is the $90 billion in industry fees to pay for reform, in particular the medical device fee, which has detractors in both parties. The industry has stirred fears that the tax will filter down to consumers. Foes of the tax had to withdraw amendments during the markup because they couldn't find any alternative sources of revenue to plug the hole.

And then there's a big one — Democrats, including the top Senate leaders, show little sign of muting their outrage with the two deals cut by White House and Baucus with the pharmaceutical and hospital industries. The White House had to work hard in the Finance Committee to preserve the pharmaceutical deal, and it is likely to be a concern until the final vote given how senators are eager to rip up both deals.

"Most members don't agree with it," Sen. Dick Durbin (D-Ill.) said of the drug industry agreement.

But with so much unfinished business, that also means there's plenty of horse-trading for votes still left to be done. And the target of most of it is Sen. Olympia Snowe (R-Maine). Despite the relentless push by Obama and Baucus for bipartisan support, Republican participation in the merger beyond Snowe looks minimal, given the party's uniform opposition.

"The president has asked us to pass comprehensive health reform that lowers costs and increases access for all Americans," Reid spokesman Jim Manley said Friday. "We will work with anyone who supports those goals, regardless of political party."

 

For Snowe, her last-Republican-standing positioning already has paid off. Snowe really wanted to reduce the penalty for people who don't buy insurance. So Baucus and Schumer put together a last-minute amendment to lower the individual mandate penalty from $1,900 to $1,500 per family, potentially smoothing the way for Snowe's vote.

But again, she said she plans to push for no penalty at all.

“Why would we set about to impose penalties on people?” Snowe asked. “I don’t understand. It’s not about punishing people. It’s about getting it right on affordability.”

The change means 2 million fewer people would be covered in 2019. The insurance industry began mobilizing against the change Friday, saying the watered-down penalties would make harder to bring everyone into the system. And that in turn will make it harder to implement market reforms such as ending the practice of denying coverage because of pre-existing medical conditions, representatives for America's Health Insurance Plans argued in an email to reporters.

That's just a sign of what's to come. Barely hours after sleepy Senate Finance members trooped out of the hearing room Friday morning, industry groups across Washington and lawmakers fired up their email lists in hopes of shaping the next stage of the process.

On the left, Sen. Sherrod Brown (D-Ohio) began circulating a letter saying the government insurance plan enjoys "resounding support" among Democrats. On the right, Minority Leader Mitch McConnell (R-Ky.) told reporters it was "a bill that's in trouble."

Remarkably, the Baucus bill survived the committee markup without any major threat to its core elements. From the standpoint of Democrats and Snowe, the legislation is more palatable than the version Baucus originally introduced.

"It is because people like myself and others who felt strongly on things hung in and wouldn't yield," said Sen. Jay Rockefeller (D-W.V.), who was the most outspoken critic of the bill on the Finance Committee.

Indeed, Rockefeller scored a big win late Thursday by being stubborn. He resisted repeated requests through the markup to withdraw his amendment preserving the Children's Health Insurance Plan as a standalone program. Baucus proposed folding coverage for low-income children into the new insurance market known as an exchange, but Rockefeller said it would have endangered their specialized health plans.

After waiting weeks for a cost estimate from the Congressional Budget Office on his amendment, Rockefeller received it just in time -- at 8:48 p.m. Thursday. And it showed a cost savings of $15 billion, Rockefeller said Friday.

Not only did the estimate preserve CHIP as a free-standing program, it gave Baucus a pot of money to lock in other votes. Shuttling between the hearing room and a private anteroom, Baucus found agreement to use the funds to raise the threshold at which the excise tax on "Cadillac" insurance plans would kick in for people older than 55 and high-risk professionals, such as firefighters and coal miners. Instead of getting taxed on plans worth $21,000 for a family, the threshold for those groups is $26,000 per family.

The change topped the priority list for at least four wavering Democrats - Schumer, Kerry, Menendez, and Debbie Stabenow (D-Mich.). But they will look to expand the exemption going forward.

These changes, as well as others made during the markup, should secure the votes of most, if not all, Democrats on the committee.

Still, with so many pieces in flux, Democrats say they need to examine the final bill and the CBO cost estimate before declaring their votes in the Finance Committee. If the estimate tops $900 billion, Baucus said the committee will need to make changes.

Rockefeller said the bill is far better than it was, but he's not yet willing to sign on until he reviews the language.

"We are at the beginning of the process," he said. "This is literally the beginning."

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