Health Care Reform

For 75 years, Democratic presidents and members of Congress have fought to create a comprehensive national system of health insurance; President Obama has made passing such a bill his central legislative priority. On Nov. 7, handing him a hard-fought victory, the House approved a sweeping overhaul of the nation's health care system by a vote of 220 to 215. The Senate passed an $871 billion bill on Dec. 24. But even as the House and Senate worked to reconcile their bills, the fate of the effort was put in jeopardy by an upset Republican victory in a special election to fill the Senate seat in Massachusetts held for decades by the late Senator Edward M. Kennedy. That outcome deprived the Democrats of the 60th vote needed to block a Republican filibuster, and threatened to change the political calculus for wavering supporters in both houses.

The broad outlines of both bills hew relatively closely to the plans that emerged over the summer and fall from five Congressional committees, all in the face of all but unanimous Republican opposition. The bills would expand coverage by making more lower-income people eligible for Medicaid, and by offering subsidies to help moderate-income people buy insurance. They would forbid insurance companies from denying coverage of pre-existing conditions, and would create insurance exchanges -- new government-regulated marketplaces where individuals and small businesses could come together to buy coverage. The 160 million Americans who get their coverage through their employer would stay with that insurance. Nearly everyone would be required to get insurance or face a penalty, and businesses would be required to provide coverage or contribute to its cost. A detailed comparison of the plans can be found here.

As negotiations in lieu of a formal conference committee began, House leaders agreed to drop a government-run insurance plan, the so-called public option, which the Senate bill had omitted. But other important differences remained, including provisions over abortion and taxes.

Democrats have hailed the measures as a huge leap forward in both extending coverage to the tens of millions of Americans who currently lack it and in beginning the process of reining in spiraling heath care costs. Republicans have passionately denounced them as a giant expansion of government that will prove unaffordable and undermine the coverage of those who currently have it. They pointed to the election results in Massachusetts -- perhaps the most reliably Democratic state -- as proof that public opinion had turned against the health bills.


The Democrats' desire for universal access to health insurance runs deep. President Franklin D. Roosevelt hoped to include some kind of national health insurance program in Social Security in 1935. President Harry S. Truman proposed a national health care program with an insurance fund into which everyone would pay. Since then, every Democratic president and several Republican presidents have wanted to provide affordable coverage to more Americans.

President Bill Clinton offered the most ambitious proposal and suffered the most spectacular failure. Working for 10 months behind closed doors, Clinton aides wrote a 240,000-word bill. Scores of lobbyists picked it apart. Congressional Democrats took potshots at it. And Republicans used the specter of government-run health care to help them take control of Congress in the midterm elections of 1994.

One of the most significant differences between 1993-94 and 2009 is that employers and business groups, alarmed at the soaring cost of health care, are now among the advocates for change.

Insurance companies, which helped defeat the Clinton plan, began the year by saying they accept the need for change and want a seat at the table. As the bills developed, however, they became strong opponents of some Democratic proposals, especially to create a government-run insurance plan as an alternative to their offerings.

In his 2010 budget, Mr. Obama gave an indication of the scope of his ambitions on health care reform when he asked Congress to set aside more than $600 billion as a down payment on efforts to remake the health care system over the next 10 years, partly by limiting the income tax deductions that the most affluent taxpayers claim.

But after sending Congress his budget plan, Mr. Obama's White House, displaying a surprisingly light touch, encouraged Democrats in Congress to make the hard decisions. By the end of March 2009, the chairmen of five Congressional committees had reached a consensus on the main ingredients of legislation, and insurance industry representatives had made some major concessions. The chairmen, all Democrats, agreed that everyone must carry insurance and that employers should be required to help pay for it. They also agreed that the government should offer a public health insurance plan as an alternative to private insurance.


Democrats worked on three separate paths to develop legislation in the summer of 2009. On June 14, House Democratic leaders introduced their bill, which in addition to a public plan included efforts to slow the pace of Medicare spending, a tax on high-income people and penalties for businesses that do not insure their workers. After a revolt by a conservative group of "Blue Dog'' Democrats that led to more exemptions for businesses, the plan was adopted by three committees without Republican support.

In the Senate, the Health, Education, Labor and Pension committee worked on a bill with a public insurance plan, while the Senate Finance Committee, led by Senator Max Baucus, Democrat of Montana, worked on a bill that sought to avoid one, which Mr. Baucus thought was necessary to gain bipartisan support.

On July 2, the Senate health committee put forward its bill. Under the proposal, employers with 25 or more workers would have to provide coverage or pay the government an annual fee of $750 for each full-time worker and $375 for each part-timer. The government would pay the start-up costs for the public insurance option as a loan to be repaid, and premiums would be set up so that the option was ultimately self-sufficient.

The bill was passed July 15 by the health committee on a party-line vote of 13 to 10, with all Republicans opposing the package. Both Republicans and Democrats acknowledged that the health committee bill was just part of what would eventually be a single Senate measure.


During the Congressional recess in August, the White House found itself suddenly at risk of losing control of the public debate over health care reform. As conservative protests mounted, the White House began playing defense in a way administration officials have not since the 2008 campaign.

Democratic Party officials acknowledged that the growing intensity of the opposition to the president's health care plans -- plans likened on talk radio to something out of Hitler's Germany, lampooned by protesters at Congressional town-hall-style meetings and vilified in television commercials -- had caught them off guard.

On Sept. 9, Mr. Obama confronted a critical Congress and a skeptical nation, decrying the "scare tactics" of his opponents and presenting his most forceful case yet for a sweeping health care overhaul that has eluded Washington for generations.

When Mr. Obama said it was not true that the Democrats were proposing to provide health coverage to illegal immigrants, Representative Joe Wilson of South Carolina yelled back, "You lie!" Mr. Wilson apologized but his outburst led to a six-day national debate on civility and decorum, and the House formally rebuked him on Sept. 15.

The president placed a price tag on the plan of about $900 billion over 10 years, which he said was "less than we have spent on the Iraq and Afghanistan wars." He also announced a new initiative to create pilot projects intended to curb medical malpractice lawsuits, a cause important to physicians and Republicans.


Late that month, Mr. Baucus introduced his long-awaited plan. The bill closely resembled what Mr. Obama said he wanted, except that it did not include a new government insurance plan to compete with private insurers.

Unlike the other bills, the Baucus plan would impose a new excise tax on insurance companies that sell high-end policies. The bill would not require employers to offer coverage. But employers with more than 50 workers would have to reimburse the government for some or all of the cost of subsidies provided to employees who buy insurance on their own.

The bill got a significant boost when the Congressional Budget Office announced that despite its price tag, it would reduce the federal deficit by slowing the rate of health-care spending.

On Oct. 13, the committee voted to approve the legislation. The vote was 14 to 9, with all Republicans opposed except for Senator Olympia J. Snowe of Maine. Two weeks later, Ms. Snowe's support was lost, when Mr. Reid, the majority leader, announced he would include a public option in the legislation he took to the Senate floor.


Before Speaker Pelosi put the House bill to a vote, she had to broker a series of compromises that ultimately brought along just enough support from conservative Democrats to win passage. The biggest changes concerned the public option plan, which would have to negotiate rates just as private insurers do, rather than offering a rate set slightly above what Medicare pays; the plan would also confront strict controls on abortion. After heavy lobbying by Catholic bishops, the measure was amended to tighten restrictions on abortion coverage in subsidized plans bought through the insurance exchanges, to insure that no federal money was used to pay for an abortion. Both changes angered Ms. Pelosi's base of liberal Democrats, but they chose to support the bill nonetheless.

Democrats say the House measure -- paid for through new fees and taxes, along with cuts in Medicare -- would extend coverage to 36 million people now without insurance while creating a government health insurance program. It would end insurance company practices like not covering pre-existing conditions or dropping people when they become ill. And despite its price tag, they pointed to an analysis by the Congressional Budget Office that said it would reduce the deficit over the next 10 years.

In a sign of potential difficulties ahead, some centrist Democrats said they voted for the legislation so they could seek improvements in it in a conference with the Senate.


By early November, the broad outlines of the bill Senator Reid would introduce on the Senate floor were clear -- it would include the public option that was part of the health committee's bill, but with an "opt out'' provision for states, and many of the taxes and fees written in to the Finance Committee's version.

A lull in the action ensued as the Congressional Budget Office "scored'' the bill and Mr. Reid tinkered with it to hold down its cost and to appeal to conservative Democrats.

Though broadly similar to the House bill, Mr. Reid's proposal differs in important ways. It would, for example, increase the Medicare payroll tax on high-income people and impose a new excise tax on high-cost "Cadillac health plans" offered by employers to their employees.

Mr. Reid's bill would not go as far as the House bill in limiting access to abortion. And while he would require most Americans to obtain health insurance, he would impose less stringent penalties on people who did not comply.

Both bills would create a voluntary federal program to provide long-term-care insurance and cash benefits to people with severe disabilities.

The official cost analysis released by the nonpartisan Congressional Budget Office showed that Mr. Reid's bill came in under the $900 billion goal suggested by Mr. Obama. But 24 million people would still be uninsured in 2019, the budget office said. About one-third of them would be illegal immigrants.

The Congressional Budget Office has said the House bill would reduce deficits by $109 billion over 10 years and cover 36 million people, but still leave 18 million uninsured in 2019.


As debate began, Mr. Reid began searching for changes that could pull together the 60 votes that would be needed to avoid a Republican filibuster. The Democratic caucus contains 60 members, including two independents, but one of those independents, Joseph I. Lieberman of Connecticut, said he would block a vote on any bill containing a public option. The support of several conservative Democrats, including Ben Nelson of Nebraska, Mary L. Landrieu of Louisiana and Blanche Lincoln of Arkansas, was also in considerable doubt.

A group of five liberal and five conservative Democratic senators, who agreed on a plan that would sidetrack, but not kill, the idea of a government-run plan. Under the agreement, people ages 55 to 64 could "buy in" to Medicare. And a federal agency, the Office of Personnel Management, would negotiate with insurance companies to offer national health benefit plans, similar to those offered to federal employees, including members of Congress. If these private plans did not meet certain goals for making affordable coverage available to all Americans, Senate Democratic aides said, then the government itself would offer a new insurance plan, somewhat like the "public option" in the bill Mr. Reid had unveiled three weeks before.

The Medicare expansion quickly died when Senator Lieberman announced his opposition, to the exasperation of liberals who pointed out that he had spoken in favor of the idea three months before.

The last Democrat to come on board was Mr. Nelson, who won a series of changes: a provision to strip the insurance industry of its anti-trust exemption was dropped; language was added to allow states to decide to block plans covering abortion from their insurance exchanges; and the bill now provides Nebraska with additional Medicaid funds.

Republicans vowed to use every parliamentary device at their disposal to slow the measure, which they said was being rammed through the Senate in an unseemly rush. But with Mr. Nelson on board, Mr. Reid's bill survived the first serious procedural hurdle by reaching the 60 vote mark needed to fend off a filibuster.


When the roll for the final vote was called at 7:05 a.m. on Dec. 24, it was a solemn moment. Senators called out "aye" or "no." Senator Robert C. Byrd, the 92-year-old Democrat from West Virginia, deviated slightly from the protocol.

"This is for my friend Ted Kennedy," Mr. Byrd said. "Aye!"

The 60-to-39 party-line vote came on the 25th straight day of debate on the legislation.

After a holiday break, House and Senate leaders began negotiations that took the place of a formal conference committee, the venue for reconciling differences between bills passed by the two chambers. President Obama took an active role in those talks, working to hammer out a compromise version of the Senate bill's excise tax on high-cost insurance plans, which had been opposed by unions. Even though tough issues like other tax measures and restrictions on abortions were yet to be hammered out, Democrats were hoping to secure final passage by the time Mr. Obama delivered his State of the Union speech on Jan. 25th.

But the victory of Scott Brown, a previously little known Republican state senator, in the Massachusetts special election to fill Mr. Kennedy's seat, upset all calculations and left Democrats scrambling for approaches that might allow them to pass some version of the bill.

source: New York Times


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