Reid Plan ups pressure on Moderates
Senate Majority Leader Harry Reid unveiled his $848 billion health reform bill Wednesday to broad support from fellow Democrats — and the move quickly turned up the pressure on the last few wavering moderates to support the plan, which includes a sizable chunk of deficit cutting.
Reid’s plan would expand coverage to 94 percent of Americans through a government-run health insurance option — allowing states to opt out — and other features, all while reducing future federal deficits by $130 billion over the next 10 years, according to a Congressional Budget Office report released late Wednesday.
“Tonight begins the last leg of this journey” to bring health reform to the nation, Reid said in announcing the bill.
But Reid’s plan contains considerable differences from House legislation passed earlier this month — with a more limited public option and different ways to pay for the bill. Reid included an excise tax on insurers who offer “Cadillac” health plans, not the “millionaire’s tax” that’s in the House bill.
And one of the biggest differences between the bills – on language restricting federal funding for abortion – could prove problematic for Reid. His bill doesn’t include as many limits as the House bill and already is drawing fire from anti-abortion activists.
Democrats on Wednesday were clearly hoping that the deficit figures — the biggest deficit reduction of any health bill to date, Reid’s office noted — would knock down one of the last remaining obstacles to winning the votes of key centrists, at least to go ahead with debate on the bill as early as this weekend. Reid’s office said the bill could reduce the deficit by $650 billion in its second 10 years.
And, in fact, the strategy seemed to be working. Nebraska Sen. Ben Nelson and Louisiana Sen. Mary Landrieu both sounded more positive about voting to allow debate to proceed.
Nelson told reporters he still had problems with the public option plan — he prefers a plan that would allow states to opt in instead — but signaled he’d wage that fight on the floor. He also made clear the vote to allow debate wouldn’t be the final fight on the bill.
“There will be opportunities to amend the legislation, and if it is amended to the satisfaction of several people, then it will have enough votes to pass on the back end,” Nelson said. “If not, it won’t. That is the risk.”
Other centrists sounded positive toward the bill. “If the bottom line is what it appears to be, that’s an encouraging thing. ... But you’ve got to trust but verify,” said Sen. Evan Bayh (D-Ind.), who said he would vote to allow debate.
One holdout appeared to be Sen. Blanche Lincoln of Arkansas, who faces a tough reelection fight next fall. On her way in to the briefing with Reid, Lincoln was asked how she will vote on the motion to proceed: “We’ll wait and see,” she said.
Reid’s hopes of calling a vote to proceed with debate as early as Friday seemed to fade, but a Saturday vote remained a possibility. But he has no margin for error, needing all 58 Democrats and two independents to block any move toward a filibuster and bring the bill to the floor.
And over the course of Wednesday, the announcement of the plan emerged as a key test of his leadership and vote-corralling abilities — with President Barack Obama dispatching Vice President Joe Biden back to his old Senate haunts to help.
Adding to the uncertainty Wednesday was the absence of Senate Finance Committee Chairman Max Baucus, who flew back to Montana to deal with a family emergency.
Beyond the moderates, Democrats praised Reid’s effort to thread the needle with a bill that will keep costs lower than Obama’s target of $900 billion, reins in deficit spending and still expands coverage to more than 31 million Americans. The reimbursement rates for the public plan will not be tied to Medicare, and co-ops will still be offered.
As for the $650 billion estimate, it grows out of a calculation by the CBO that the Senate Finance Committee bill would reduce the deficit by one-fourth to one-half percent of gross domestic product over its second 10 years. Finance Committee officials converted that to $650 billion to $1.3 trillion, and Reid’s office believes his bill to be in the one-fourth range and maybe higher — leading to the claim of $650 billion.
The Senate bill pushes back implementation of major parts of reform to 2014 — a shift from both the House and the Senate Finance Committee bill, which created 2013 effective dates.
This is bad news for lawmakers who will need to explain to constituents why the elements that have attracted the most attention -- the public plan, the Medicaid expansion and the insurance exchanges -- won't be available for four years. Some reforms would kick in earlier, Senate aides explained, but the big pieces would still be a ways off.
Reid sought to sidestep hot-button issues that could cause trouble for the bill. Illegal immigrants will not get health benefits under the bill, and it would restrict taxpayer funding of abortion — an issue that almost derailed the House bill.
Abortion rights supporters were quick to praise the language Reid included in the bill, which was an early warning sign that it doesn’t go far enough for some in the anti-abortion community who led the effort to amend the House bill.
The National Right to Life Committee slammed the language as “unacceptable.”
“Reid seeks to cover elective abortions in two big new federal health programs, but tries to conceal that unpopular reality with layers of contrived definitions and hollow bookkeeping requirements,” NRLC Legislative Director Douglas Johnson said in a statement.
Other Democrats praised Reid’s efforts.
Sen. John Kerry (D-Mass), who was concerned about the tax on Cadillac benefits, praised Reid for raising the limits to policies costing $23,000 for a family and $8,500 for an individual. “They moved, and I like the new numbers. It is closer to where I first began. ... I think we are going pass this legislation.”
Kerry also praised Reid’s efforts to reduce the tax on medical device manufacturers to $20 billion, down from $40 billion, over 10 years.
The Reid bill would increase the Medicare payroll tax on couples who earn more than $250,000 and individuals that earn $200,000 from 1.45 percent to 1.95 percent.
The bill levies a 5 percent tax on elective cosmetic surgery. The provision raises $5 billion and was needed to make the numbers work, a Democratic Senate aide said. The Finance Committee considered the tax but dismissed it, in part because it was a public relations battle that senators were not willing to wage.
The Senate bill includes a public insurance option that allows states to choose not to participate. In order to opt-out, states would have to pass a law, the aide said.
The Congressional Budget Office estimated only a fraction of the uninsured -- 3 million to 4 million people -- would enroll in the public plan, in part because some states would decide against offering it. The figure is lower than the 6 million who were estimated to enroll in the public plan under the House bill, which does not provide an escape hatch for states.
“Overall, CBO’s assessment was that about two-thirds of the population would be expected to have a public plan available in their state,” the CBO report stated.
The Reid bill only slightly toughens the requirement that people carry insurance. It levies a $95 fine in 2014 and scales up to $750 by 2016. The Senate Finance bill had no penalty in the first year.
Critics worry that people will choose to pay the cheaper penalty rather than buying the more expensive insurance plans because the bill also requires insurers to offer coverage to people who are sick. That combination could lead to an older, sicker and more expensive risk pool.
In what can be viewed as an election-year sweetener for senior citizens, the coverage gap in the Medicare prescription drug program would shrink by $500 in 2010 only under the Senate bill. The Senate aide described it as a "down-payment" that would move the Senate closer to the House bill, which eliminates the donut hole over the next decade.
Getting 60 votes on what amounts to a procedural vote has proved challenging for Reid. Biden held court for more than three hours in a room off the Senate floor. Interior Secretary Ken Salazar and former Senate Majority Leader Tom Daschle were also dispatched to the Capitol by Obama to lobby senators.
As expected, moderates were the focal point. Salazar ate lunch with Sen. Mark Pryor (D-Ark.) in the Senate dining room. Lincoln hustled into the Senate reception room for a sit-down with Biden, but she emerged without making any public commitments.
“We’re still counting. Harry is still counting and working,” said Senate Majority Whip Dick Durbin (D-Ill).
New CBO Score
Here it is. Will update with details shortly.
Update: Some highlights:
--Costs $848 billion
--Cuts the deficit by $130 billion over the next decade
--Cuts Medicare spending by $491 billion over 10 years.
--Covers 94 percent of non-senior residents. By 2019, about 31 million more people would have insurance, leaving about 24 million uninsured -- about 8 million of which would be unauthorized immigrants.
--3-4 million would join the public plan or roughly 1 in 8 people buying insurance through the exchanges.
--Medicare spending would decrease by about 2 percent over the next two decades.
Reid's restrictions on Abortion
Senate Majority Leader Harry Reid tries to do what House Democrats couldn't by silencing an abortion debate before it overtakes the negotiations over his health care bill.
As promised, Reid didn't include the controversial Stupak amendment, which prohibits coverage of elective abortions under the public plan and prevents insurers from offering it to anyone who receives federal subsidies through the new insurance exchange.
Instead, Reid's bill tries to maintain current law, wherever applicable, and extend it to new programs created through the legislation. But it wasn't enough to satisfy abortion opponents that federal funds won't be used to fund the procedure.
"Senate Majority Leader Harry Reid (D-Nv.) has rejected the bipartisan Stupak-Pitts Amendment and has substituted completely unacceptable language that would result in coverage of abortion on demand in two big new federal government programs," said Douglas Johnson, legislative director for the National Right to Life Committee. "Reid seeks to cover elective abortions in two big new federal health programs, but tries to conceal that unpopular reality with layers of contrived definitions and hollow bookkeeping requirements."
The bill grants the secretary of Health and Human Services the authority to determine whether federal money is being used to fund abortions under the public plans, but doesn't ban those plans from offering the coverage. Reid's bill also explicitly requires insurers to separate private premiums from any public subsidies used to pay for that coverage to assure taxpayer dollars aren't used to fund the procedure - which is prohibited by the Hyde Amendment.
But critics of the original abortion language in the House argued that the subsidies alone would make coverage more available to people who might not otherwise be able to afford it. Therefore, these critics requested the blanket ban on insurance companies from offering it to anyone who used subsidies to pay for coverage. Since the subsidy structure is different in the Senate bill, these explicit guidelines might be enough for anti-abortion lawmakers - many of the Democrats briefed on the bill Wednesday night said they were okay with the current language. But it might not. So expect the outside groups, like National Right to Life and the Catholic Church, to dictate those terms.
There is a conscience clause that makes it perfectly acceptable for insurance companies to deny that coverage or health care providers to refuse carrying out the procedure. But the bill also requires each exchange to offer one plan that provides abortion coverage and one that doesn't - a major sticking point for critics of the original House language.
California Rep. Lois Capps, who tried to hatch a compromise on the Energy and Commerce Committee, commended Reid's language, saying, “I am pleased that the Senate has adopted a reasonable, common ground approach on this difficult question. It appears that their approach closely mirrors my language which was originally included in the House bill."
In a statement, she went on to point out that the bill "ensures that federal funds do not pay for abortions but allows continued access to this legal medical procedure."
But given how abortion opponents reacted to the Capps Amendment, this might not be the endorsement Reid was looking for
Sources: Politico, CBO, LA Times
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