Reid introduces health care reform deal

By Lisa Mascaro

Published Saturday, Dec. 19, 2009 | 10:02 a.m.

Updated Saturday, Dec. 19, 2009 | 3:59 p.m.

WASHINGTON — Senate Majority Leader Harry Reid introduced a final compromise version of health care reform on Saturday, believing he has the 60 votes needed to start several days of round-the-clock votes that could lead to passage by Christmas.

The new bill, priced at $871 billion over the next decade, reworked language on abortion and added home-state sweeteners to bring on board hold-out Sen. Ben Nelson of Nebraska, who announced his support.

The first in a series of votes could begin as early as 1 a.m. on Monday.

The White House heralded the legislative breakthrough after long and painstaking negotiations on President Barack Obama’s top domestic priority.

“It now appears that the American people will have the vote they deserve on genuine reform that offers security to those who have health insurance and affordable options to those for do not,” Obama said in remarks from the White House.

“Today is a major step forward for the American people. After a nearly century-long struggle we are on the cusp of making health care reform a reality in the United States of America.”

Securing the Nebraksa senator, perhaps the most conservative Democrat in the Senate, came after Reid, Nelson and others holed up until late Friday — in what was described as a long, tough day of deliberations.

When asked Saturday morning if he had the 60 votes necessary to proceed, Reid simply said: "Seems that way."

Republicans, however, oppose the bill en masse, and have signaled they would continue to employ the procedural tools at their disposal to halt the process.

Sen. Mitch McConnell of Kentucky, the Republican leader, called the latest compromise a "legislative train wreck" cobbled together behind closed doors.

Republicans on Saturday demanded a full reading of Reid’s amendment of changes to the earlier 2,074-page bill. Senate clerks spent more than seven hours reading through the 383 new pages as the first blizzard of the winter continued dumping snow on the capital.

"This bill is a monstrosity, a 2,100-page monstrosity," McConnell said.

But Reid, flanked by the chairmen of key health care related committees, said those who are trying to stop the legislation "have a lack of understanding of the problems in America today."

"I say to those people who want this thing stopped, they need to read our mail for a while," Reid said, referring to the letters that come to senators' offices with stories of hardships over health care costs.

"This bill will do so many good things for so many people."

Early analysis from Democrats show the latest compromise is similar to previous versions. It would reduce the federal deficit by $132 billion during the next 10 years and cover 31 million Americans who are now uninsured, ensuring health care coverage for 94 percent of the country. The price tag of the latest version is $23 billion more over the decade than the Senate’s earlier $848 billion bill.

Gone is the once-hoped-for public option plan, which liberal supporters believed would provide a necessary alternative to private insurers.

In its place is a new health care exchange that would allow the uninsured to buy policies from a menu of private insurers in a system overseen by the federal government — much the way members of Congress buy their health care.

The bill includes insurance company reforms, including a ban on denying coverage for pre-existing conditions and, eventually, on coverage caps. For children, the ban on denying coverage for pre-existing conditions begins immediately.

All Americans would be required to buy coverage by 2014, but subsidies would be offered to many low- and middle-income families. The new bill would expand tax credits for businesses to provide insurance to employers.

Those who refuse to buy insurance would face penalties, starting at $95 a year and growing annually, or up to 2 percent of income by 2016. Families that decline coverage would face maximum penalties of $2,250 a year.

Even though Obama initially opposed mandatory coverage as a candidate during the presidential campaign, analysts believe requiring all Americans to have insurance would broaden the risk pool and bring down overall insurance costs.

To pay for subsidies, the bill includes earlier proposals to tax high-wage earners, but it proposes doing so at a higher rate than the bill initially set. The new version nearly doubles the tax from 0.5 percent to 0.9 percent on those making more than $200,000 a year or $250,000 for families. It also taxes those who receive so-called “Cadillac” health care plans from employers.

Tanning salon patrons would also be hit with a new 10 percent tax on patrons, but the new bill drops an earlier proposed tax on cosmetic surgeries after plastic surgeons balked.

Nelson, the Nebraska senator, had opposed using any federal funds for abortion coverage. The bill already said no federal funds could be used to pay for abortion services, as has been longstanding law, except in cases of rape, incest or the threat of the death of the mother.

The House version of the bill strengthened that language, saying even individuals who use their own money to buy insurance off the new exchange could not spend their private dollars on abortion coverage.

The Senate compromise does not go that far, but would strengthen the firewall so that private and public funds are not co-mingled.

Reid and other senators had been holed up for hours this week crafting alternative language that could be acceptable to all Democratic senators.

But the Nebraska senator also was concerned about the bill's proposed expansion of Medicaid, the state-run federal insurance program for low-income families and children, worried it would saddle states with a bigger government program.

The Medicaid expansion has been a longstanding issue, raising concerns among the nation's governors, including in cash-strapped Nevada.

The bill had already promised full 100 percent federal funding to the states for the first three years of the expanded Medicaid program.

But Reid cut a deal that provides Nebraska with 100 percent funding indefinitely into the future — an arrangement that will surely draw fire in the majority leader’s home state of Nevada where Republicans have criticized Reid for not doing enough to help the state hard hit by recession.

Several weeks earlier, Reid also secured a deal for Louisiana Sen. Mary Landrieu, who had also been a holdout, that provides her hurricane-damaged state extra Medicaid funding.

The state of Vermont also received Medicaid enhancements, which Republicans immediately criticized as another sweetener. Sen. Bernard Sanders of Vermont, the Independent Democrat, had been among those greatly disappointed by the loss of the public option plan.

But the Medicaid enhancement for Vermont, and also Massachusetts, allows those states to receive additional federal support even though they have already greatly expanded their Medicaid programs from their state coffers. Negotiators felt that denying them federal support was punitive for the states’ past efforts to cover so many residents.

The health insurance lobby continued to fight the legislation, saying the new taxes on insurers will result in higher premium costs.

“While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control,” said Karen Ignagni, the president of America’s Health Insurance Plans, the industry lobby group.

“This bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today.”

Reid and Democrats have been holed up for days working long hours well into the night on the final language. With Republicans expecting to hold firm in their opposition, Reid must secure the votes of all 60 senators who caucus with the Democrats for passage.

Democrats were clearly pleased to have struck an agreement that appears to be able to set the bill on the course for passage.

Reid was greeted with a rousing applause as he convened a closed-door meeting of the caucus early Saturday following a 7 a.m. vote that morning.

"We have the goal in sight," said Sen. Tom Harkin of Iowa, the chairman of the Health committee.

Progressives remain disappointed by the bill, believing that without a public option alternative, the legislation would simply serve up 30 million new customers to the insurance companies, with no alternative to force competition and drive down premium costs.

Harkin, a leading progressive who fought for the public option, suggested the bill was a start.

“What we are building here, it’s not a mansion. It’s a starter home,” Harkin said. “But it’s got a great foundation.”

The bill would still need to be merged with the House-passed version, and the two have stark differences.

But making substantial changes could be dicey: Nelson of Nebraska said his support could be lost if major changes occurred in merging a potential Senate bill with the House.

“We don’t want a wholesale substitutive or material changes, because my support is condition,” Nelson said.

A blizzard covered the capital in heavy snow overnight, essentially shutting down the city. Snow continued falling throughout the day blanketing the streets in the season’s first major storm.