With Nelson on board, health-care bill could pass by Christmas
By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Saturday, December 19, 2009; 1:30 PM
Sen. Ben Nelson (Neb.), the final Democratic holdout on health care, announced to his colleagues Saturday morning that he would support the Senate reform bill, clearing the way for final passage by Christmas of President Obama’s top domestic policy priority.
The Senate is expected to work its way through a series of procedural motions over the next few days, with a vote on the legislation scheduled the evening of Dec. 24th. A conference with the House to produce a final bill would likely extend into January, Senate aides said.
Congressional budget analysts said the revised package, unveiled Saturday morning by Reid, would spend $871 billion over the next decade to extend coverage to more than 30 million Americans by dramatically expanding Medicaid and offering federal subsidies to those who lack affordable coverage through employers.
Those costs would be more than covered by nearly $400 billion over the next decade in new taxes and nearly $500 billion spending reductions, primarily cuts to Medicare, the federal health program for people over 65. The remainder, about $132 billion over 10 years, would go to lowering the federal deficit.
But the Congressional Budget Office found that the package could reduce budget deficits by as much as $1.3 trillion in the second decade, starting in 2019, a significant improvement in long-run savings compared with both the House bill and the measure Reid had previously crafted. In his blog, CBO director Douglas Elmendorf attributes the change to lower targets for Medicare spending after 2019.
Democratic leaders worked for days to hammer out a deal with Nelson, and finally reached a tentative agreement late Friday night with him on abortion coverage provisions that had proven the major stumbling block to winning his support. Nelson also secured favors for his home state and to benefit different factions of the health-insurance industry.
Republicans strongly rejected the revised bill as laden with risky new policies and giveaways to win votes. GOP leaders invoked a Senate rule to require the package of changes in the legislation to be read aloud on the floor, a process expected to last about five hours.
“This bill is a monstrosity, a 2,100 page monstrosity full of special deals,” said Senate Minority Leader Mitch McConnell (R-Ky.). “This is not renaming the post office. Make no mistake, this bill will reshape our nation and our lives.”
But Republicans also were running out of options in their quest to derail the bill. Locking down Nelson’s support meant Reid had cleared a path through the Senate’s complex parliamentary minefield. A 60-vote super majority means the minority’s primary source of power in the Senate, the filibuster, cannot be sustained.
Under the new abortion provisions, states can opt out of allowing plans to cover abortion in the new insurance exchanges the bill would set up, to serve individuals who lack coverage through their jobs. Plus, enrollees in plans that do cover abortion procedures would pay for the coverage with separate checks — one for abortion, one for the rest of any health-care services.
Nelson secured full federal funding for his state to expand Medicaid coverage to all individuals below 133 percent of the federal poverty level. Other states must pay a small portion of the additional cost. He won concessions for qualifying nonprofit insurers and for Medigap providers from a new insurance tax, and was able to roll back cuts to health savings accounts.
“I know this is hard for some of my colleagues to accept and I appreciate their right to disagree,” Nelson told reporters at the Capitol, of the many changes made at his behest. “But I would not have voted for this bill without these provisions.”
The revised Senate bill closely tracks with the $848 billion measure Reid drafted earlier this month, before he entered into negotiations aimed at winning the needed 60 votes. Since then, Reid has made numerous concessions to moderate Democrats in addition to Nelson and others with abortion-related concerns. Reid also scrapped efforts for a government-run insurance plan, or public option.
Instead of a public option, the final bill would allow private firms for the first time to offer national insurance policies to all Americans across state lines. Those plans would be negotiated through the Office of Personnel Management, the same agency that handles health coverage for federal workers and members of Congress.
Starting immediately, insurers would be prohibited from denying children coverage due to pre-existing conditions. A complete ban on the practice would take effect in 2014, when the legislation seeks to create a network of state-based insurance exchanges, or marketplaces, where people who lack access to affordable coverage through an insurer could apply for federal subsidies to purchase policies.
Insurers competing in the exchanges would be required to justify rate increases, and those who jacked up prices unduly could be barred from the exchange. Lifetime limits on coverage would be banned and annual limits would be “tightly restricted,” aides said, until 2014, when they, too, would be banned entirely.
Reid’s package also would give patients the right of appeal to an independent state board if an insurer denies a medical claim. And all insurance companies would be required to spend at least 80 cents of every dollar they collect in premiums on delivering care to their customers.
Under the proposal, every American would be required to obtain coverage or face annual penalties. Employers, too, could be fined if they failed to offer affordable coverage and their workers sought subsidies in the exchanges. Reid’s package would offer additional assistance to the smallest businesses, however, including six years of tax credits, starting in 2010 to help businesses with 25 or fewer workers and average wages of less than $50,000 to purchase policies. And workers who couldn’t afford employer-offered insurance but earned too much to qualify for a federal subsidy would be permitted to keep their employer’s contribution to their coverage and use the money to buy insurance on the exchanges.
Reid also strengthened cost-containment provisions, expanding the scope of an independent Medicare advisory board charged with reining in runaway Medicare costs. Under the final bill, the board also could make recommendations for Congress, the federal government and the private sector, a change demanded by seniors’ groups. And the legislation would provide grants to state governments to test ways to eliminate medical malpractice lawsuits.
The package would rely on nearly $400 billion in new taxes, according to congressional tax analysts, including a new 10 percent tax on indoor tanning salons to be paid by the customer. With the addition of the tanning tax, Reid proposes to scrap an earlier provision that would have imposed a 5-percent levy on cosmetic surgery.
In addition to the tanning tax, the Reid amendment would increase certain levies in the original bill. For example, couples making more than $250,000 a year would pay an additional 0.9 percent in Medicare payroll taxes, instead of the 0.5 percent increase Reid originally proposed. And people who failed to obtain insurance for even one month would face monthly penalties that by 2016 could add up to as much as $750 a year or 2 percent of a person’s income, whichever is greater.