Dec. 9 (Bloomberg) -- Senate Democrats tentatively agreed
to abandon plans to set up a full government-run insurance
program in a bid to remove one of the biggest obstacles to
health legislation, a person familiar with negotiations said.
The lawmakers instead backed a proposal to establish a
program modeled on the U.S. government employee-insurance system
that would have private companies provide coverage under federal
oversight to millions of uninsured Americans, the person said.
They also want to expand eligibility for the federal Medicare
program for the elderly.
The deal was negotiated by 10 Senate Democrats seeking an
alternative to the government-run program. While most Democrats
support the so-called public option, the idea has drawn fire
from party members in the Senate and all Republicans. It needs
backing by 60 senators to get into the final bill.
Senate Majority Leader Harry Reid said Democrats reached
“a broad agreement” on the issue, yet offered no details.
“We have confronted many hurdles, and tonight I believe we
have overcome yet another one,” Reid, a Nevada Democrat, said
in a statement last night.
Reid is pushing the Senate to pass health-care legislation
before the end of the month, paving the way for a House-Senate
compromise early next year. The 10-year, $848 billion Senate
bill, designed to cover 31 million uninsured Americans and curb
medical expenses, would make the biggest changes to the nation’s
health-care system in four decades.
‘Several’ Alternatives
The dispute over the government-run insurance plan
threatened to derail any agreement, with Republicans and
centrist Democrats saying it would provide unfair competition to
insurers such as Hartford, Connecticut-based Aetna Inc. and
Indianapolis-based WellPoint Inc.
Reid, seeking to break an impasse on the bill, encouraged
the group of Senate Democrats to meet behind closed doors and
come up with an alternative to his original plan to set up a
government program that would allow states to opt out.
While he said last night the “consensus” is for a public
option, Jim Manley, his spokesman, said the proposal by the
senators to allow the federal Office of Personnel Management to
administer insurance plans could be construed as a public
option.
Alternative Plans
Reid sent several alternative proposals to the
Congressional Budget Office, which must offer a cost estimate
for the legislation, Manley said.
One was the senators’ plan to allow the federal agency to
oversee the insurers, he said. Another calls for the public
option to be started up only if private insurers failed to keep
costs down. That idea is being pushed by Maine Senator Olympia
Snowe, one of the few Republicans being courted by Democrats to
support the legislation.
The White House applauded what it called “great progress”
by the senators. “We’re pleased that they’re working together
to find common ground toward options that increase choice and
competition,” Communications Director Dan Pfeiffer said in a
statement.
The plan agreed to last night would let private companies
sell insurance to businesses throughout the U.S. It would lower
the eligibility age for the Medicare plan to 55 from 65.
Long Way to Go
Lawmakers have cautioned that there is a long way to go
even if an accord holds.
For one thing, the analysis by the nonpartisan budget
office may set back Reid’s timetable. For another, Senator Joe
Lieberman, a Connecticut independent who caucuses with the
Democrats, has said he is skeptical about creating an
alternative to the public option based on coverage offered to
federal employees.
“There’s a danger that people will try to add more to the
bill than it can reasonably carry,” Lieberman said, citing the
costs involved.
And the steering committee for the Health Care for America
Now coalition, which includes the NAACP, United Auto Workers and
the AFL-CIO, among other groups, yesterday said a public option
has to be part of the insurance exchanges the health legislation
would create.
“Using nonprofits to replace a public option won’t work,”
the steering committee said. “In fact, with half of people in
private insurance currently enrolled in nonprofit plans, they
are part of the problem.”
Expanding Medicaid
Like the $1 trillion measure passed by the House on Nov. 7,
the Senate’s health-care legislation would require Americans to
get health coverage or pay a penalty. It would expand Medicaid,
set up new online purchasing exchanges to get insurance and
provide subsidies for those who need help buying policies.
The agreement follows a vote earlier last night in which
the Senate refused to add stricter limits on abortion funding to
health-care legislation.
The lawmakers voted 54-45 to reject an amendment by
Nebraska Democrat Ben Nelson, jeopardizing his support for the
overall legislation. Nelson said his proposal would preserve the
ban on federal funding of abortion; opponents argued it would
discourage insurance companies from covering the procedure.
The loss means Reid may have to find a compromise to gain
Nelson’s backing for the broader measure.
“This is not the right place for this debate,” Reid said
before lawmakers voted to take the amendment from consideration
on the Senate floor. “We have to get on with the larger issue
at hand,” the health-care plan, he said.
To contact the reporters on this story:
Laura Litvan in Washington at
llitvan@bloomberg.net ;
Nicole Gaouette in Washington at
ngaouette@bloomberg.net
