Pelosi Says House To Fight For "Real" Health Care Reform...Wink, Wink!

Nancy Pelosi's Uphill Health Hill Battle



Speaker Nancy Pelosi is telling her caucus not to believe stories that the U.S. House will simply roll over and accept the Senate’s hard-fought health care bill.

“That’s not true for one second,” Pelosi told her agitated rank-and-file in a call this week.

But she may not have a choice.

Any major changes to the Senate bill threaten to upset a delicate détente Majority Leader Harry Reid (D-Nev.) built over months of cautious negotiations to hold together 60 votes in his divergent caucus.

The public option is out. Employer mandates could prove too tough to change. And the president has already taken the Senate’s side in the fight over a tax on high-end health care plans.

“Each of the provisions at issue has already been negotiated ad nauseam in the Senate,” said a Senate Democratic aide. “The physics of this are unlikely to change much.”

Pelosi even seemed to concede one of her top priorities during the call – suggesting she could live with pushing the start date for reforms from 2013 to 2014, the date in the Senate bill. That alone would save $100 billion in the House bill, according to several congressional aides, money the speaker told her caucus could be plowed into making insurance more affordable.

So the ever-practical Pelosi is setting her sights on achievable goals: boosting insurance subsidies, strengthening oversight of insurers and setting up a national exchange to make sure the federal government sets minimum standards for coverage under the reforms.

Even those could prove to be a tall order.

Two key moderates – Sen. Ben Nelson (D-Neb.) and Sen. Joe Lieberman (I-Conn.) – have favored the state-based exchanges over national exchanges. The question now is whether it will prove make-or-break for either.

It’s not just the Senate. Pelosi, who relishes a good fight, finds herself locked a duel with President Barack Obama over the so-called Cadillac tax included in the Senate bill – a 40 percent levy on insurance plans that exceed $8,500 for individuals and $23,000 for families.

To win this skirmish – or any other – she needs to convince Obama her math is tougher than Harry Reid’s.

In other words, that it’s harder to corral 218 “yes” votes in the House than it is for Reid to get 60. And the House does not like the Cadillac tax, which hits the Democrats’ labor allies hard, because many unions have bargained for the high-end insurance policies over the years.

Pelosi wades into the fight with the overwhelming support of her caucus; 190 Democrats have signed a letter opposing the tax, and organized labor is making a fevered last-minute push to shield its members, including a meeting with Obama Monday.

“Two-hundred eighteen is a pretty big number to get to,” said Rep. Joe Courtney (D-Conn.), a lead critic of the so-called Cadillac tax who authored the letter. “I’m not claiming that the 190 people on my letter are monolithic in their opposition…but it doesn’t take much to go from 220 to 217.”

Pres. Obama argues that the tax would force people to re-think whether they need such expensive coverage – and in turn, help hold down cost increases in the health care industry, one of his top goals.

Democrats in the House favor a tax on the wealthiest Americans, but there’s little appetite in the Senate for their “millionaire’s tax” on individuals who make more than $500,000 and couples who make more than $1 million.

But the House won’t go quietly.

On a Thursday afternoon conference call, numerous Democrats expressed their concerns with the Cadillac tax, according to people on the call. Only one – Colorado Rep. Jared Polis – spoke up in support of the tax, telling colleagues that it would help lower health care costs across the market.

Others, like New Hampshire Rep. Carol Shea-Porter, warned the speaker that it could impose new burdens on middle-class Americans. Critics worry the tax would force employers to scale back coverage and could ensnare people in high-premium states or people with serious health concerns. Some even wonder whether the tax would raise the $149 billion over the next 10 years that the Congressional Budget Office predicts because businesses would quickly shift away from these plans.

“The fact that premiums are higher does not mean that benefits are better,” said New York Rep. Jerrold Nadler.

With organized labor up in arms, Democrats also worry that it’s unwise to undercut hard-fought collectively bargained health benefits to foot the bill for subsidies to the poor.

“It’s a political disaster,” Nadler said. “It drives a wedge between Democratic constituencies.”

Of course, institutional envy also plays a role in the skirmish because House Democrats are tired of watching holdouts force Reid to make any more major concessions.

“The [Senate] Finance Committee came up with this idea when they were still negotiating with Republicans,” Courtney said. “Somehow it took on a life of its own.”

There are plenty of signs that both sides are working toward a compromise. Publicly, labor is pushing lawmakers to back off entirely from the excise tax. But labor has signaled privately that it would back down if lawmakers raise the threshold at which the tax kicks in to around $25,000 for a family policy, according to Democratic officials. The speaker and her caucus might want to push that number even higher.

Also, they want to make sure the tax would increase at the pace of rapidly rising health insurance premiums to ensure more people aren't ensnared by the tax each year, as has happened with the Alternative Minimum Tax.

But raising the cut-off reduces the amount of tax revenue collected, so Democrats would have to fill that hole in the tax package. That could force Senate Democrats to accept a further expansion of the Medicare payroll tax, perhaps on capital gains. The Senate bill already boosts the tax rate by 0.9 percent on couples that earn more than $250,000 a year.

As party leaders lurch toward a compromise, House Democrats are unifying around a few core priorities, and affordability tops that list.

On the conference call, Rep. Mike Doyle (D-Pa.) said insurance needs to be affordable if Congress requires almost every American to secure coverage through the so-called individual mandate.

And Education and Labor Committee Chairman George Miller (D-Calif.) explained that the subsidy levels differ drastically in the area of caps for out-of-pocket expenses. The House sets a cap of $500 for individuals and $1,000 for families at the lower end of the income scale. In the Senate bill, those caps are $2,050 and $4,100 respectively. The president has suggested he is leaning in the House’s direction on this one.

But these changes all cost money, and raising the final price tag from $871 billion runs the risk of alienating senators, including Nelson.

“Every dollar above $900 billion is pushing people’s tolerance level,” the Senate aide said. “It can be something rounded down and called $900 billion, but it can’t be something that when rounded up is called $1 trillion.”

Most Democrats seem to accept the predictable loss of the public option. In the absence of government-sponsored health coverage, liberals now want negotiators to waive the anti-trust exemptions for insurance companies –another sticking point for Nelson.

Oregon Rep. Peter DeFazio told his fellow Democrats on Thursday that it needs to be in the final package to keep insurance companies accountable. The speaker agreed wholeheartedly, telling her members that any bill that lacks a public option must also include a national insurance exchange and require companies to spend a higher proportion of premiums on actual health care costs for their customers.

And a push to change the Medicaid funding formula – a flashpoint for Nelson – seems to be gaining momentum and is likely to change during the conference negotiations, according to Democratic aides.

Nelson’s spokesman confirmed this week that the senator was engaged in “serious discussions” with Reid to extend the special deal he secured for Nebraska – that the federal government forever picks up the state’s share of the Medicaid expansion – to all 50 states. A commitment of that size would cost tens of billions of dollars, making it unlikely. Nelson is also pushing an alternative, allowing states to opt-out of the Medicaid expansion in 2017, when the federal government stops picking up the full cost.

Reid spokesman Jim Manley said the discussions were still in their earliest phase.

"We are just starting to work with the house and the administration to reconcile the differences between the two bills," Manley said.

With the White House pushing for a speedy resolution, the speaker isn’t giving her members any more insights on the deadline than she gives the members of the media who hound her in the hallways. Appropriations Committee Chairman Dave Obey asked Pelosi on Thursday what her timeline is for a vote, and the speaker replied, “When we’re ready” – a refrain familiar to every reporter covering the issue.



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Sources: Politico, Google Maps