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August 3, 2009

Washington Health Policy Week in Review Archive ef018853-dd30-4cba-adbd-6a1199cf7ed8

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CBO Letters Prompt More Sparring Over Health Overhaul Savings, Coverage

By Jane Norman, CQ HealthBeat Associate Editor

July 27, 2009 --Two new reports issued by the Congressional Budget Office (CBO) over the weekend renewed sparring over the health overhaul, as members of Congress returned to work on Monday and faced what could be a final week of frenzied negotiations over the legislation prior to an August recess for House members
Perhaps raising the most eyebrows was a brisk retort from White House Office of Management and Budget Director Peter Orszag to a letter from Douglas Elmendorf, head of the Congressional Budget Office (CBO). In the letter, the CBO said that an Obama administration proposal for an independent Medicare advisory board would save just $2 billion over 10 years.

"As a former CBO director, I can attest that CBO is sometimes accused of a bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today's analysis from CBO could feed that perception," Orszag said in a blog post published Saturday.

"For example, and without specifying precisely how the various modifications would work, CBO somehow concluded that the council could 'eventually achieve annual savings equal to several percent of Medicare spending. . .[which] would amount to tens of billions of dollars per year after 2019.' Such savings are welcome (and rare!), but it is also the case that (for good reason) CBO has restricted itself to qualitative, not quantitative, analyses of long-term effects from legislative proposals. In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped," he said.

In the IMAC letter, the CBO estimated savings from the creation of an independent Medicare advisory commission with broader powers than those now held by the Medicare Payment Advisory Commission (MedPAC), an influential advisory body created in the 1990s to research and recommend Medicare policy.

CBO Director Elmendorf said in the letter written Friday to House Majority Leader Steny H. Hoyer, D-Md., that CBO reviewed the Independent Medicare Advisory Council Act of 2009 submitted by the Obama administration to Congress on July 17. It calls for a five-member body made up of physicians and health experts, appointed by the president and confirmed by the Senate, The council would make annual recommendations to the president on Medicare spending and the entire package would be approved or disapproved by the president. If approved, the recommendations could be overturned by a joint resolution of Congress.

Elmendorf said that CBO estimated the council would produce savings of $2 billion between 2010 and 2019, with all of the savings coming between 2016 and 2019 if the proposal is added to the House Democrats' America's Affordable Health Choices Act of 2009 (HR 3200). Elmendorf said that chances are "high" that no savings would actually result though there is also "a chance that substantial savings might be realized."

Looking beyond the 10-year window, "CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis," Elmendorf wrote. He said that if the legislation would grant the new commission broad powers, set "ambitious but feasible" spending targets and create a fall-back mechanism for instituting Medicare savings, it could eventually produce savings equal to "several percent of total spending on Medicare."

But Elmendorf warned that also would mean significant changes in the way Medicare pays for and delivers services.

Success, he said, would require an IMAC with "the clear mandate, independence and resources to propose such changes." Elmendorf outlined a number of potential problems, including a weight in the membership of the council toward medical providers who might be reluctant to recommend wholesale change and the possibility of political influence by interest groups on the members of the council.

Orszag, however, focused on the language in the CBO letter that said savings could be realized. He pointed out that CBO "noted that this type of approach could lead to significant long-term savings in federal spending on health care and that the available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. This supports what President Obama has said all along: we can reduce waste and unnecessary spending without reducing quality of care and benefits."

He said the point of the IMAC proposal was never to produce immediate savings. "Instead, the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term," said Orszag. "In other words, in the terminology of our belt-and-suspenders approach to a fiscally responsible health reform, the IMAC is a game changer not a scoreable offset."

In a second letter from the CBO, this one to Rep. Dave Camp of Michigan, the top Republican on the House Ways and Means Committee, both parties found arguments to support their positions.

Republicans seized upon a statement in the letter that the House Democratic proposal would "generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window." House Republicans said in a statement that could mean a "massive spike" in the federal deficit beyond the 10-year window covered by budget estimates.

Said Camp in a statement: "When you find yourself in a hole, the first rule is to stop digging. But with this bill the Democrats keep digging a bigger and bigger deficit hole, and now we have CBO confirming it. If they can't stop digging, for the good of the nation they should at least get a smaller shovel."

Democrats, however, said the CBO letter bolstered their case that their bill would lead to an increase in employer-provided group insurance coverage rather than harming it as Republicans have maintained, using estimates generated by an outside consultant.

"The analysis confirms that provisions in HR 3200, such as the individual and employer responsibility requirements, retaining the tax benefit for employer-sponsored insurance, and the targeted income-related structure of affordability credits would result in dramatically increased coverage without crowding out private insurance," said a statement from Democrats on the three committees involved in approving the bill.

Specifically, they pointed out, the CBO letter states that "about 12 million people who would not be enrolled in an employment-based plan under current law would be covered by one in 2016, largely because the mandate for individuals to be insured would increase workers' demand for insurance coverage through their employer." The CBO also says that "CBO does not anticipate a substantial shift from private insurance to Medicaid. Specifically, we estimate that about 1 million people who would otherwise have employment-based insurance or individually purchased coverage would end up enrolling in Medicaid in 2016."

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Democrats Look to Recess to Regain Ground in Health Care Debate

By Bart Jansen and Edward Epstein, CQ Staff

July 30, 2009 -- Democratic leaders plan to spend the August recess defending their health care overhaul against withering Republican attacks, despite the lack of a finished product.

Democrats say the American public overwhelmingly supports an overhaul. But Republicans contend that the more voters learn, the less they like the details.

In fact, Republican leaders in both chamber expect to score even bigger gains among voters worried about losing access to their own doctors and courses of treatment.

A new round of polls this week shows a sharp decline in public approval for President Obama and for the Democratic health care proposals.

Senate Minority Leader Mitch McConnell, R-Ky., said, "The American people are making their voices heard in the debate over health care, and one of the things they're demanding is that we do something to lower costs."

McConnell added, "Some in Congress seem to be in such a rush to pass just any reform, rather than the right reform, that they're looking everywhere for the money to pay for it—even if it means sticking it to seniors with cuts to Medicare."

House Majority Leader Steny H. Hoyer, D-Md., conceded Thursday that Democrats have been losing the message war over the health bill, as Republicans hammer away at the measure's costs and claim it would lead to a "government takeover" of health care. "We're responsible for putting together a plan, and so we've been focused on that," Hoyer said. "Republicans have been somewhat free to conjure up whatever they want."

He predicted, however, that Democrats will regain lost ground over the August recess as they explain to their constituents in person how the House bill would benefit them.

"Members are going to be educating the public as to what the real facts are. ... I think we win the message," he said. "The average working American is going to very substantially advantaged by this bill."

Senate Democrats plan to promote sections of the overhaul that have been approved by the Health, Education, Labor and Pensions Committee, such as preventing insurance companies from denying coverage for pre-existing conditions.

"We had a committee that did gargantuan work," Senate Majority Leader Harry Reid, D-Nev., said.
Sen. Patty Murray, D-Wash., a member of the HELP Committee, also cited provisions supporting preventive care and providing incentives to medical students to become primary-care and family physicians.

Incomplete Grade
But neither the Senate nor the House bill is a finished product at this point.

Negotiations continue in the Senate Finance Committee between three Democrats and three Republicans, including the chairman and top GOP senator, in pursuit of a bipartisan bill that can win at least 60 votes on the floor.

Reid remains "cautiously optimistic" that the committee will complete a bill before the Senate begins its recess Aug. 7. But some of the negotiators say that is unlikely.

As the House Energy and Commerce Committee resumed its markup of a health care overhaul, Speaker Nancy Pelosi defended the deal struck with some of the panel's conservative Democrats.

Some Democratic liberals on and off the committee were balking at concessions made by House leaders and Energy and Commerce Chairman Henry A. Waxman, D-Calif., to panel Blue Dogs who were threatening to torpedo the bill.

But Pelosi defended the agreement, which allowed Waxman to resume a markup he broke off July 21, and turned aside criticism that she had given the Blue Dogs too much influence over the process.

"No, I don't think there is any disproportionate influence when members speak out in favor of their own constituents," she said.

Hoyer said that "in some respects" he believes the deal with the Blue Dogs improved the bill, despite claims by liberal critics that the compromise would water down a proposed public health insurance option and harmfully reduce subsidies for individuals to obtain health coverage.

Hoyer said, "I think the critical factor is the public option remains in the bill. It is a very good bill."

Pelosi reminded disgruntled liberals, "We're all part of the same party." 

— Alex Wayne contributed to this story

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Energy and Commerce Panel Approves Health Overhaul

By Alex Wayne, CQ Staff

July 31, 2009 -- The last of three House committees considering a health overhaul approved the bill on Friday night, setting up the legislation for a floor vote in September.

The Energy and Commerce Committee approved the bill 31–28. All of the committee's Republicans opposed the measure, and they were joined by five Democrats, mostly members of the moderate Blue Dog Coalition who say the bill would not do enough to contain the growth of health costs.

Four other Blue Dogs supported the measure, giving Democrats the margin they needed to advance it from the committee. But the Blue Dogs' support came only after two weeks of negotiations with the committee's chairman, Henry A. Waxman, D-Calif. Democrats on the committee did not strike a final deal until early Friday morning.

The Democrats who opposed the measure were Rick Boucher of Virginia, Bart Stupak of Michigan, Jim Matheson of Utah, Charlie Melancon of Louisiana, and John Barrow of Georgia. The latter three are Blue Dogs. Stupak opposes abortion and believes that the measure will lead to increased numbers of the procedure.

Under the agreement, the Blue Dogs won an amendment that would require a government-run insurance plan the bill would create, what Democrats call a "public option," to negotiate payment rates with health providers, rather than paying rates set at those of Medicare, plus 5 percent.

The Blue Dogs have complained that Medicare does not pay doctors and hospitals well enough in their mostly rural districts, driving providers to more urban areas.

The amendment also would cut the cost of the $1 trillion bill by trimming subsidies that would be provided to low-income people to help them buy insurance through a new, regulated marketplace called an "exchange."

Liberals on the panel who say the public plan is watered down by the Blue Dogs' amendment and that the cuts in subsidies will hurt the poor demanded two amendments of their own. One was a relatively noncontroversial collection of minor savings proposals, such as requiring the Centers for Medicare and Medicaid to simplify its administrative procedures through such steps as requiring claims for the programs to be submitted electronically.

But the second amendment would authorize the government to negotiate prices in Medicare's prescription drug program, something long opposed by drug companies and insurers who administer the program.

The drug companies and insurers say they already negotiate the drug prices seniors pay in Medicare. The negotiations are not public, however, and many Democrats have long suspected that insurers are not getting the best prices possible.

The second liberal amendment also would require that insurers offering plans through the exchange obtain permission from the government before they increase premiums greater than the rate of medical inflation.

The two liberal amendments specify that whatever savings they are able to produce would be dedicated to mitigating the cuts in subsidies for low-income people required under the Blue Dogs' amendment.

The Blue Dogs' amendment was adopted 33–26. The first of the liberals' amendments was adopted 32–26; the second was adopted 32–23.

Republicans ridiculed the Blue Dogs for negotiating what they said were relatively minor changes in the bill.

"You let the Blue Dogs in," Mike Rogers, R-Mich., said to Waxman, "and they got to choose the color of the lipstick on the pig. That's all you got."

Prescription drugs were the focus of several amendments Friday.

The committee adopted an amendment by Anna G. Eshoo, D-Calif., that would authorize the Food and Drug Administration to approve generic versions of costly biologic drugs derived from human proteins. Ordinary chemical pharmaceuticals have faced generic competition for more than two decades.

Eshoo's amendment, which Waxman opposed, would grant biologics manufacturers 12 years of exclusive use of their date before generic manufacturers could begin developing competitors.

Her amendment is identical to a Senate biologics amendment adopted on a bipartisan 16–7 vote earlier this month by the Health, Education, Labor and Pensions Committee. The industry wanted a 14-year period of market protection, while liberals such as Waxman wanted no more than seven years.

Waxman and Nathan Deal, R-Ga., argued that they did not think Eshoo's amendment would be effective at lowering the price of biologics or increasing innovation in the industry. Waxman, knowing that he would lose a vote, called for a voice vote on Eshoo's amendment and announced that it had succeeded. But Eshoo called for a recorded vote, prompting him to snap at her, "You promised me you wouldn't do that!"

The vote was 47–11.

The committee adopted by voice vote an amendment by Bobby Rush, D-Ill., that would prohibit brand name drug companies from settling patent litigation with generic competitors by paying them to delay marketing their products.

Democrats nearly lost one amendment vote when many Blue Dogs defected. The amendment, by Phil Gingrey, R-Ga., Roy Blunt, R-Mo., and Lee Terry, R-Neb., would have allowed anyone not enrolled in a group health plan, such as those offered by employers, to enroll in a health plan identical to those offered to federal employees.

As the roll call vote began on the amendment, Eshoo and Bart Stupak, D-Mich., both voted yes. That prompted Waxman to hustle down to their end of the dais and speak with them. Four other Democrats voted for the amendment, and several passed their votes, waiting until after the rest of the committee voted to state their positions.

Republicans heckled Anthony Weiner, D-N.Y., for voting against the amendment a day after he made remarks suggesting he would support such a proposal.

Eshoo changed her vote to no, and the amendment fell 28–31.

Weiner later offered an amendment that would have replaced the bill's coverage provisions with a single-payer health system, modeled on Medicare, that would cover every American. Several Democrats spoke in favor of the amendment, arguing it would be simpler than the House bill and that it would save the nation money.

But Weiner agreed to withdraw the amendment after Waxman told him that Speaker Nancy Pelosi, D-Calif., had promised him that supporters would be able to offer the measure as an amendment on the House floor.

Waxman and the committee's senior Republican, Joe L. Barton of Texas, agreed not to consider an estimated 45 to 50 amendments that Waxman described as minor. Instead, those amendments that are agreeable to both parties will be bundled into a separate bill that the committee will mark up in September, Waxman said.

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No Senate Finance Deal Yet But Chairman Touts Latest CBO View of Health Bill

By Jane Norman and John Reichard, CQ HealthBeat

July 29, 2009 -- Senate Finance Chairman Max Baucus, D-Mont., said Wednesday a preliminary report from the Congressional Budget Office (CBO) shows that his draft health overhaul bill would cost less than $900 billion over 10 years, cover 95 percent of Americans by 2015, and be fully offset.

It was an assessment he called "encouraging," but other committee members cautioned that no deal is at hand on the complex overhaul. And Senate Minority Whip Jon Kyl, R-Ariz., a member of the Finance panel, flatly predicted that no formal markup would occur until after the August recess.

"There's not going to be a deal before September," Kyl said. "Look, I'm on the committee, and they're not sharing with me. But this is Wednesday, the week before we leave, and if you don't have something pretty nailed down by now, you're not going to have a product available for a markup, especially with what Max said this morning."

Nonetheless, both President Obama and Senate Majority Leader Harry Reid, D-Nev., issued statements Wednesday afternoon praising the committee's progress, along with movement in the House, where the Energy and Commerce Committee chairman struck a deal with some fiscally conservative Democrats though a markup was again postponed.

"I want to thank the members of both the Senate and House of Representatives for continuing their work on health reform to provide more stability and security for Americans who have insurance, and quality, affordable coverage for those who don't," said Obama. "I'm especially grateful that so many members, including some Blue Dogs on the Energy and Commerce Committee, are working so hard to find common ground. Those efforts are extraordinarily constructive in strengthening this legislation and bringing down its cost."

Reid said, "we are another step closer to producing a bill that lowers costs, preserves choice and improves the overall quality of health care."

Baucus spoke Wednesday morning after emerging from the latest round of negotiations involving five Finance Committee members—three Democrats and two Republicans. Sen. Michael B. Enzi, R-Wyo., has been part of the negotiations but did not take part in that meeting.

The group has been working for weeks to produce a bipartisan bill that would expand coverage to millions of uninsured Americans without adding to the budget deficit over 10 years or driving up health care costs beyond that time frame.

The bill put together thus far by the group would reduce the deficit in the tenth year by several billion dollars, Baucus said. He acknowledged that CBO's report "does not include resolution of several key issues."

That appeared to be an understatement.

Enzi said no deal is imminent. "We still have several areas where we haven't been able to come to a consensus. No deal is at hand and substantive issues, big and small, remain," Enzi said.

"Nothing is going to be resolved until everything is resolved because there are so many interrelated parts to it," he said.

Sen. Charles E. Grassley, R-Iowa, another negotiator, said that headlines stating that a deal is imminent are "very inaccurate" and much remains to be decided. "We're making some progress by inches," he said.

"You could have a hundred or 200 or 300 subsets of Medicare reform, and we've probably got 95 percent of them decided," Grassley said in a conference call with Iowa reporters. "So I say we're on the edge of having an agreement. But I mean, I'm saying out of the total number of things you've got to make decisions on, but the 5 percent that are left are very difficult."

He also said both he and Baucus have to discuss any proposal with their respective caucuses prior to public announcement of an agreement.

Sen. Kent Conrad, D-N.D., another negotiator, said: "We certainly made a lot of progress but there's a lot more to be done. It's very hard to judge how close because you get into things and then you send [for] CBO scoring, and you don't know when you're going to get it back. The timetable's really not in our control."

Conrad said the latest CBO estimate did not reflect a final agreement, but that lawmakers were getting close. "The range of options has been narrowed substantially. But there are still things outstanding," he said.

The total size of the package is not expected to vary widely from the estimate, if and when Baucus's group settles on a final agreement. "In terms of the dollar amount, [it] probably won't change much," Conrad said.

Conrad also spoke of the potential of consumer-run cooperatives to compete with private plans on an insurance exchange where consumers could compare and choose among a variety of options. This would be an alternative to a government-run public plan that many Democrats, including President Obama, strongly advocate.

"This [the coop approach] is a model the actuaries have told us would be very effective in a reformed market with 40 million new entrants," Conrad said. "They believe very quickly this kind of operation would have 12 million members. It would be the third largest insurer in the country."

Jeff Bingaman, D-N.M., said the talks will continue. He wouldn't predict whether a deal would be reached before the Senate leaves Aug. 7 for its summer recess.

"I think we're making progress when we meet," Bingaman said. "How it concludes, I can't tell you."

Another Finance Committee Democrat who is not a participant in the talks, John Kerry of Massachusetts, said he remains optimistic about reaching a deal.

"We need to get something to the floor out of our committee," Kerry said. "We'll keep working at it."

Grassley said, "we're trying to work through these things. And it takes time. And, you know, I don't want the press in on our meetings, but I'll tell you, my job would be a lot easier if we had press reporting on how much detail we're going into and how many sides to an argument and how many points brought up and how many counterpoints are brought up and how even members thinking things through change their mind before the debate is over."

Democratic Sen. Blanche Lincoln of Arkansas, a member of Finance, said, "I've always felt this is very possible" to come to an agreement on the overhaul and one that would be workable for small businesses. She and other Democratic senators appeared at a press event touting the benefits of the Democratic approach for small businesses.

"There are tremendous inefficiencies in our health care delivery system right now. We have to do something about those inefficiencies before we start throwing these taxing threats around," she said. "I think it can happen and I think we're very close to coming up with good solutions for that. And I think the American people want it. . .small businesses desperately want to provide health insurance."

She added, "we want to make sure that it's paid for, we want to make sure we are eliminating the inefficiencies that are long term as well."

Democratic Sen. Mary L. Landrieu of Louisiana, though, said anything like the surtax levied in the House proposal to raise revenue for the bill would be "very tough" in the Senate and "we have to be as light on the mandate to business as possible, as flexible as possible."

The bipartisan group met again Wednesday afternoon and Conrad emerged to say that the latest round of discussions was devoted to Medicare payment reforms, which he said CBO told senators were a key element for long-term change in controlling health costs.

"I think you'll find real enthusiasm for what's been put together," said Conrad. Examples include hospital value-based purchasing, primary care bonus payments, comparative effectiveness studies and a Centers for Medicare and Medicaid innovation center. However, he said "no" when asked if CBO had scored savings for those measures at more than $50 billion, though he said savings are greater after the first decade.

"It is hard to asses how close we are," said Conrad. "We made very steady progress but there are things outstanding." He said that affordability and Medicaid expansion are two items, "so that the governors are comfortable with what we are doing."

Sen. Charles E. Schumer, D-N.Y., appeared pleased with the meeting. "This was the best discussion we've had about cost cutting that I have been through. It was very encouraging," he said.

Bart Jansen, Kathleen Hunter and Richard Rubin contributed to this story.

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Prolonged Senate Health Talks Worry Some Democrats

By Bart Jansen, CQ Staff

July 29, 2009 -- Liberal Democratic senators are growing concerned about compromises that Finance Chairman Max Baucus is negotiating behind closed doors in an attempt to craft a bipartisan health care bill.

Negotiators from both parties—even a Republican who dropped out—have praised Baucus, D-Mont., for his attempt to draft bipartisan legislation.

But Democrats on the Health, Education, Labor and Pensions (HELP) Committee, which produced a partisan bill that must be merged with one from the Finance Committee, are becoming impatient with the lengthy talks that have already prevented floor debate before the August recess.

Sen. Sheldon Whitehouse, D-R.I., who served on HELP as the panel drafted its version, said senators would be more comfortable with the Finance negotiations if there were a clearer sense of the results. He said Baucus has enjoyed "substantial trust," but that the secret talks involving three Democrats and three Republicans make it tough to counter GOP assaults.

"It has been difficult for Democrats outside the three inside this secret negotiation to respond to Republican attacks because we frankly don't have information about what it is that we would be defending," Whitehouse said. "I think it would be very, very difficult to leave for the August recess without the Finance Committee even having laid down a bill."

Some Democrats are also concerned that the talks could yield a bill they can't support, either because it lacks a government-run insurance option for consumers or because it includes a tax on some employer-provided health benefits.

"Coming up with a piece of legislation that is watered down politically doesn't make a whole lot sense," said Sen. Bernard Sanders, a Vermont independent who serves on the HELP Committee. "A bipartisan bill, which might only mean that we come back five years from now, doesn't make a whole lot of sense."

The debate is far from over. President Obama, who had wanted each chamber to approve versions of the legislation before August, has said he's willing to wait in order to get good legislation with broad support.

Majority Leader Harry Reid, D-Nev., hopes to merge the HELP and Finance bills during August for a September floor debate.

Baucus vowed Tuesday that his committee would develop a bill that will provide health care for all Americans, reduce costs and reform the insurance industry – with the support of at least 60 senators needed to prevent a filibuster.

"We are going to find a solution," said Baucus, who is known for working closely with Sen. Charles E. Grassley of Iowa, the ranking Republican on the committee. "We're all on the same page."

Public Plan, Employer Mandate
Others are skeptical. Many Democrats strongly support a public plan option and a requirement that employers provide subsidized health insurance to their workers. Republicans are just as vehemently opposed to both.

Sen. Orrin G. Hatch, a Utah Republican who has joined Democrats in other health efforts, left the Finance talks last week. Even though he praised Baucus' efforts, Hatch expects a public option and an employer mandate to be in the legislation that ultimately goes to the Senate floor.

"His problem is he's stuck with his own side. They will not give him much leeway to really work out a path for our monumental problems," Hatch said. "I commend Sen. Baucus because he has really worked hard to bring both sides together. But he is extremely limited as to how far he can go to accommodate our positions."

The public plan option, which would compete with private insurance plans in an exchange where consumers could compare and choose among the offerings, remains a lightning rod. Sanders cites national polls showing strong public support for such a plan.

"What the American people want is a Medicare-type public option in 50 states in this country, which will give them the choice against private insurance companies. That's what the people want," Sanders said. "I don't think the co-op in any way is going to do that."

The Finance negotiators insist no decisions have been made, but they have been eyeing an alternative option—regional non-profit cooperatives that would compete against private plans to keep costs down.

Sen. Kent Conrad, D-N.D., said the co-ops that negotiators are considering would cover 12 million people nationwide and become the third-largest insurance entity in the country. Conrad also supports taxing costly private-insurance programs.

"The question is what will be the decision of the group," Conrad said of the Baucus talks. "Colleagues will have the opportunity to amend."

Another negotiator, Sen. Olympia J. Snowe, R-Maine, also noted that Finance Committee members could offer amendments, such as for a public option, even though co-ops are "the major option on the table."

She said Baucus could have stuck with a partisan bill, but that it would have been less likely to pass the Senate.

"He understands the minefields involved," Snowe said. "He's doing a lot of the heavy lifting up front, frankly. It makes it sustainable for the long haul."

Wait and See
Another pivotal Democratic senator who is not in the Finance committee negotiations, moderate Ben Nelson of Nebraska, said had a warning for his more liberal colleagues.

"If something is going to pass the Senate, it's going to have to have Republican support," Nelson said. "I know how you have to balance that out. But on the other hand, those on the Democratic side who might not like the final product are faced with not having a product at all."

Democratic Finance members who are not part of the talks say that a bipartisan agreement is within reach and that they are patient enough to wait for it.

"I continue to believe that there is bipartisan support for real reform," said Sen. Ron Wyden, D-Ore., who introduced his own bill with cosponsors among the Republican leadership. "The president has made it clear that his first choice is a bipartisan bill. If you go to his Web site, he zeroes in on three things: containing costs, promoting choice and enhancing quality. Those are things we all could do."

Sen. Blanche Lincoln, D-Ark., said Baucus tried hard to keep Finance members informed with a meeting Tuesday and another Wednesday.

"I'm not bashful. I'll weigh in continually on the things that I think are important to me and the people of Arkansas," Lincoln said. "I think a bipartisan bill is going to be the best way to go."

Other Democrats are growing restless. Sen. Christopher J. Dodd, who shepherded the HELP legislation to approval on a party-line vote July 15 after taking over for the ailing chairman, Edward M. Kennedy, compared the health debate to civil-rights battles of the 1960s.

"Some of the most important battles ever waged in this institution were not bipartisan. They were very partisan, they were very tough and hard-fought," Dodd said recently. "No one remembers how hard they were fought. They just remember getting a job done. That's what's at stake here: getting a job done."

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Senate Finance Committee Democrats Eye Spending Controls

By John Reichard, CQ HealthBeat Editor

July 28, 2009 -- Senate Finance Committee negotiators spent much of their time Monday discussing ways to cut the growth in national health care spending and narrow the gap in revenues they need to cover most of the uninsured—but didn't sound close to an agreement on a health overhaul package.

Committee Chairman Max Baucus, D-Mont., said that much of a morning meeting of committee Democrats focused on giving authority to an independent agency to determine Medicare payment rates while still retaining some congressional authority to intervene. Baucus said the sense among his fellow Democrats was that "the more authority given to an independent agency, the better," while "still allowing congressional involvement in some sense so we're not delegating all of that to an independent agency."

Baucus noted that another idea that's "gaining a lot more currency is imposing of fees on the insurance industry to the degree to which they have high-value policies." The idea of taxing insurers for such policies is gaining support "partly because it raises some revenue," but also because "it does bend the growth curve."

Finance Committee Democrat John Kerry of Massachusetts also sounded upbeat about prospects for such a tax, which he has proposed to fellow panel members. "There's a consensus building now that it's fair to ask the plans in America to contribute something so that we begin to drive the costs down," Kerry told reporters.

Michigan Democrat Debbie Stabenow said Kerry is looking at taxing insurers on the amount of premiums they charge above $25,000 per enrollee. Stabenow said taxation at that level would raise $90 billion over ten years. The idea is to prod insurers to offer lower-cost plans less likely to fuel spending growth.

The premium tax on employers may mean that employees are off the hook tax-wise on their health care benefits. Kerry indicated that the idea of taxing workers on a portion of the health insurance premiums that employers pay on their behalf is off the table.

Oregon Democrat Ron Wyden, whose Healthy Americans Act would end the exclusion of employer-paid premiums from taxable employee income, called the Kerry proposal "an attractive idea. It's not all that different from what we have in the Healthy Americans Act with respect to creating incentives, making sure that you're not subsidizing the deluxe Cadillac packages."

Baucus said that while 84 percent of the cost of the package he is developing would pay for coverage of lower-income uninsured Americans, people with coverage now would also benefit by paying lower premiums. Baucus said that according to the Congressional Budget Office, premiums for individual policies would fall 7 to 8 percent under the package he is crafting. Americans who buy insurance in the small group market will see their premiums go down by a lesser amount—"but at least they'll go down," Baucus said.

Democratic lawmakers emerging from the morning meeting fielded a number of questions from reporters that assumed the committee, in order to woo moderates and some Republicans, is moving toward dropping the idea of offering a government-run insurance plan in favor of only offering consumer-run health insurance cooperatives as an alternative to private coverage.

Democrat Kent Conrad of North Dakota wouldn't confirm that the government-run option was off the table but said the co-op idea is alive and well. Asked whether the public option is now looking less likely, Conrad said, "I always hesitate to say any conclusion because we have this rule, 'nothing is agreed to until everything is,' but certainly the co-operative is a live option."

Participants in the morning meeting also wouldn't confirm that a mandate that employers pay for coverage is off the table. Kerry said no decision has been made on whether to include such an employer mandate or to instead take a "free rider" approach that would require employers to pay subsidy and Medicaid costs if they don't offer health coverage to their lower-wage workers.

Baucus said he is talking to President Obama every day about the progress he is making in the negotiations but shied away from predicting when he would offer a proposal to be marked up. Kerry was willing to make a prediction on timing, but still hedged his bets.

"I feel relatively confident that we're going to be able to come together around some kind of a bill before we leave here," Kerry said, referring to the Senate's August recess that begins Aug. 8. "Ultimately whether we get through the markup or don't I can't tell you today, but I'm confident we're going to have a concept on which we will agree," he said.

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