December 24, 2009 -- Just as their counterparts did in the House in early November, Democrats in the Senate coalesced in the face of a unified Republican Party early Thursday to win passage of legislation overhauling the nation's health care system. This time the closing of the ranks behind President Obama’s top domestic priority was even more impressive; all 60 of the senators who caucus with the Democratic party voted to approve the measure (HR 3590).

But as House and Senate Democrats prepare for a conference to resolve differences between their bills, they face an even more unified and perhaps resurgent Republican Party. Moving into 2010, it's a party that sees public unease over the massive overhaul bill as a powerful weapon for reversing  its recent election losses.

Democrats, meanwhile, head back to their home districts facing a hostile public–or so say Republicans citing polling results.  And when Democrats come back, they must bridge deep internal differences over issues such as abortion, immigration, and tax policy to help finance an overhaul or watch their unity fracture when it's needed the most.

But Democrats have returned from hostile visits home before. Despite angry criticism at August town hall meetings, they came back to give their president historic victories on health care in both the House and the Senate. And Obama has managed to keep the party focused on the prize of passing historic legislation despite anger in the ranks at having to compromise away cherished goals like the public option in order to win.

In an interview with National Public Radio on Wednesday, Obama was already signaling the way forward. When asked how he'd bridge the divide between Democrats in the Senate who don't like the surtax on the wealthy and Democrats in the House who don't like the tax on so-called Cadillac health plans, Obama said it's likely the final package would include a bit of both.

By Drew Armstrong and Kathleen Hunter, CQ Staff

December 22, 2009 –Senate leaders struck a deal Tuesday paving the way for passage of the Democrats’ health care overhaul and a short-term increase in the national debt limit shortly thereafter on Dec. 24.

Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., reached an agreement that would set a vote on final passage of the health care bill (HR 3590) for 8 a.m. Thursday.

The same deal calls for consideration and passage of a short-term debt limit increase (HR 4314) immediately after the health care vote. No amendments to the debt limit bill will be in order this time around, but the deal would permit a substitute and eight other amendments to be offered Jan. 20, when the Senate will take up a longer-term increase to the debt ceiling (H J Res 45).

Their goal in sight, Senate Democrats powered through more procedural votes early Tuesday on their march toward passage of the health care overhaul.

By identical votes of 60-39, the Senate adopted Reid’s manager’s amendment and then voted to invoke cloture, or limit debate, on the substitute amendment underlying it.

One more cloture vote—to shut off debate on the bill as amended—stands between the battle-weary Democrats and passage of President Obama’s top domestic policy priority. After that, however, Republicans will not use all of the 30 hours available to them prior to a vote on final passage.

Republicans have fought the health care legislation every inch of the way, keeping the entire Senate, its staff, teenage pages, Capitol police and the congressional press corps on duty as families fretted and a blizzard raged.

Looking Ahead
Democratic leaders were already looking ahead to a conference with the House. Senate Finance Chairman Max Baucus, D-Mont., vowed that Congress would have a bill on President Obama’s desk by the time of his State of the Union address at the end of January.

The House passed its version of the health care legislation (HR 3962) on Nov. 7. Baucus said preconference negotiations will begin as soon as the Senate passes its bill and will continue over the holidays.

“We will get a bill passed in time for the State of the Union address,” Baucus declared.

That end-of-January deadline will be tight. The House does not reconvene for the second session of the 111th Congress until Jan. 12, and the Senate will not return until Jan. 19 once it completes work this year.

That means, in effect, that a deal will have to be struck before Congress is even back in session.

Baucus said he and Reid talked Tuesday about the informal negotiations, mostly by telephone, that will take place over the holidays to meet that deadline. “There will be a lot of work, a lot of meetings, a lot of conversations in the interim,” Baucus said. “We’ll get it done.’

He said the toughest issues to resolve would be the differences between the House and Senate over how to raise the revenue needed to pay for the bill’s broad expansion of health insurance coverage, and how to write language ensuring that no federal funds can be used to pay for abortions.

Reid, Baucus, and Democrats Christopher J. Dodd of Connecticut and Tom Harkin of Iowa are likely to be the lead Senate negotiators, Harkin said Tuesday.

Dodd steered an early version of the bill through the Health, Education, Labor and Pensions Committee this year, while Harkin now chairs that panel, following the death of Sen. Edward M. Kennedy, D-Mass.

Harkin said he expected House negotiators to be led by Education and Labor Chairman George Miller, D-Calif.; Energy and Commerce Chairman Henry A. Waxman, D-Calif.; and Ways and Means Chairman Charles B. Rangel, D-N.Y., along with leadership players.

Harkin noted that all but Reid and Rangel were part of same House freshman class — the so-called Watergate babies elected in 1974. Charles E. Grassley of Iowa, top Republican on the Senate Finance Committee and thus a potential conferee for the GOP, was also elected in 1974.

“It’s an interesting little tidbit . . . that after all these years . . . all of us are playing a key role in this,” Harkin said.

The Path to Passage
But before they can worry about conference, Democrats first must get their bill through the Senate. And they face more delays and more roll call votes before they reach that goal.

First, they will have to dispose of a constitutional point of order that John Ensign, R-Nev., lodged Tuesday against the bill’s requirement that individuals who lack employer-provided health insurance buy it themselves—or pay a penalty.

Ensign said Congress exceeded its constitutional powers in seeking to impose this mandate and also violated the Fifth Amendment’s prohibition on the taking of private property without compensation.

A vote on his challenge will occur Wednesday. The Senate still must adopt the substitute amendment on which debate was limited Tuesday. And it is also scheduled to vote Wednesday on the third and final motion to invoke cloture and limit debate on the bill as amended, before the vote on final passage Thursday morning.

Maintaining Unity
The manager’s amendment that Reid painstakingly constructed late last week to nail down the final Democratic votes and reach the 60 necessary to invoke cloture left many liberals disappointed.

But even though the amendment, unlike the motion to limit debate, could have been adopted by a simple majority, all 60 members of the Democratic caucus supported it.

Sen. John D. Rockefeller IV, D-W.Va., who was among the liberals disappointed that the final bill does not include a public plan among the insurance options on a new exchange, said he was not surprised at the Democratic solidarity.

He said he hoped the final version that emerges from a House-Senate conference next month would likewise command 60 votes from Democrats.

“It depends on the way the conferencing is done,” he said.

Harkin, another advocate of a public option, was already looking beyond the current legislation to future bills in future Congresses.

“One of the additions is going to be a public option, in the future,” he said. “This is a starter home, not a finished mansion.”

Kate Davidson contributed to this story.

By Jane Norman, CQ HealthBeat Associate Editor

December 23, 2009 –Could California Gov. Arnold Schwarzenegger be ready to bail on the health care overhaul?

Schwarzenegger, who’s gained widespread attention as a Republican willing to support President Obama’s efforts to overhaul the nation’s health care system, has written congressional leaders saying the bill’s Medicaid expansion would cost his state an additional $3 billion to $4 billion annually that it cannot afford. He has also made numerous remarks in the California media in recent days warning of the bill’s cost to the state.

His letter comes after Senate Democratic leaders gave an assurance to Democratic Sen. Ben Nelson of Nebraska that all the costs of Medicaid expansion in his home state will be covered. Under the Senate bill, the other 49 states will initially have their Medicaid expansion costs picked up by the federal government also, but only through 2016. After that, they’ll have to pay about 10 percent of the costs of the expansion.

The promise was made to win Nelson’s crucial vote so the health care bill (HR 3590) could pass in the Senate, but it has hardly gone unnoticed by other recession-struck states struggling with gaping holes in their budgets.

To help reduce the ranks of the uninsured, the measures in both the House and Senate will expand Medicaid coverage to new populations including childless adults, adding an estimated 2 million new enrollees in California. It’s known as MediCal there.

Schwarzenegger said he has “great appreciation” for Democratic leaders’ drive to pass legislation. “In fact, I am one of the only Republican elected officials in the country to publicly support the president’s health care reform efforts,” he wrote in the Dec. 22 letter to House Speaker Nancy Pelosi, D-Calif., and members of the state’s congressional delegation.

But he said when he was asked for his support for the overhaul, he was assured that there would not be increased costs for California or unfunded mandates. Under all scenarios, Schwarzenegger said it appears that California will be expected to come up with $3 billion to $4 billion a year.

“This crushing new burden will be added to a safety net that is already shredding under billions of dollars in unfunded federal mandates that we are struggling to meet,” Schwarzenegger wrote.

“Medicaid is a partnership program between the federal government and the states. As the partner responsible for implementing this program, I am telling you that our Medicaid program is already at the breaking point, and if federal health care reform is passed without addressing the underlying faults in the system, health care reform will fail.”

He said he still supports attempts to bring change to health care. “However, if Congress fails to address the existing unfunded mandates and adds yet another layer, federal health care reform could collapse the very safety net system it seeks to expand,” he said. California is locked into eligibility standards and benefit levels far more costly than those in other states, Schwarzenegger said.

California, for example, now covers parents at up to 106 percent of the federal poverty level while other states’ coverage is less generous, and federal rules prevent the state from rolling back that standard when faced with lower revenues, he said.

According to the Los Angeles Times, Schwarzenegger also is seeking roughly $8 billion in federal assistance to help the state out of its precarious financial situation, which includes a budget deficit exceeding $20 billion.

Meanwhile, the issue of Nebraska’s full federal funding of the Medicaid expansion is heating up. Attorneys general in at least ten states held a conference call Tuesday to consider a legal challenge to the provision, the New York Times reported.

By Alex Wayne, CQ Staff

December 23, 2009 – Senate Democrats are poised to accomplish something this week that Congress seldom attempts: passing partisan legislation in the face of what appears to be substantial public opposition.

That makes it incumbent on Democratic leaders to convince Americans that the health care overhaul bill (HR 3590) is good for them. With recent polls showing substantial public anxiety over the health plan, and with President Obama largely staying above the fray, rank-and-file lawmakers already are busily scripting narratives portraying the public as net winners in a reconfigured medical marketplace.

“I’ve always believed that once it was enacted and once it was moving, and people saw it implemented or parts of it implemented, there’d be a lot more support for it,” said Sen. Bob Casey, D-Pa., who acknowledged concern about the public mood. “But we not only have to talk about it, we have to make it work.”

Casey said he may hold town hall meetings over the Senate’s three-week holiday break to talk about the bill and how it would benefit his constituents. The $871 billion legislation would expand health insurance coverage for more than 31 million Americans who would otherwise lack it, according to the Congressional Budget Office, and would also decrease the budget deficit over time.

Democratic leaders say opposition to the bill is overstated. A Dec. 21 memo from pollster Mark Mellman to Democratic senators noted that polls by media organizations tend to ask a generic question—whether voters support or oppose health care proposals under discussion in Congress, for example—without providing context or the specifics of the proposal.

“Focus group research makes clear that voters know little about the substance of the plan—all they know is that some on both the left and the right don’t like it and that it is the subject of intense controversy,” Mellman wrote. “In essence then, these questions ask people whether they favor or oppose—a controversial plan that is in constant flux. Understood that way, it is surprising we find any support.”

Mellman, whose memo was commissioned by Senate Democratic leaders, also argued that the polls count among bill opponents people who would like Congress to “go further,” for example by creating a single-payer health system.

“The individual elements of health reform are popular, and so is the bill when described in detail,” he wrote.

A spokesman for Majority Leader Harry Reid, D-Nev., said that based on the memo, Democratic leaders are urging their caucus to talk about the “specific provisions” and “immediate benefits” of the bill with their constituents.

“Starting next year, there are going to be at least a dozen immediate benefits that people will see, and that’s what we’re going to focus on,” said the spokesman, Rodell Mollineau. It will be an “ongoing campaign,” he added.

Republicans have a different take, and are looking forward to amplifying their opposition when the Senate leaves for the holidays.

“What we’re trying to do is do everything we can to let the American people know what’s in the bill, what it costs and how it affects them,” said Sen. Lamar Alexander, R-Tenn. “They’ve still got time to stop it.”

The Republican story line portrays the bill as the product of a secretive effort carried out behind closed doors by Democratic leaders, who could only secure the needed votes by granting valuable perks to holdout members of their caucus. When it came time to pass the bill, Republicans note, Democrats scheduled votes during a snowstorm and in the middle of the night.

Of course, Republicans exercised their rights under Senate rules and refused to allow votes to be scheduled at more convenient times of the day. But the rest of the narrative—while not so different from the way most major legislation is written—is largely true.

Republicans also are trying to influence public opinion by focusing on how Democrats propose paying for the bill: through a combination of nearly a half-trillion dollars in Medicare spending reductions over the next decade and tax increases on health insurers, drug companies, medical device manufacturers, wealthy Americans and people with high-cost health insurance policies.

In such an environment, Democrats will try to inoculate themselves by tapping public frustration over health coverage denials and other problems in the existing system.

“The most important thing for Democrats is, once the thing passes, insurance reform will be the cornerstone of it. That’s got to go into effect very quickly,” said Bill Schneider, a political analyst with the centrist think tank Third Way. “Democrats have got to keep selling it, even harder, after it passes, because this law — once it becomes law — is going to need an awful lot of protection.”

Some Democrats concede that the results might not be apparent before voters go to the polls, but add that they have to look beyond immediate political repercussions.

“When [the bill] goes into effect, when people have health coverage, when they can get health coverage they can afford and when their kids don’t have to die in their arms of cancer because they can actually bring them to a doctor, the polls will start to change,” said centrist Mary L. Landrieu, D-La, who withheld her support for the bill until relatively late in the debate.

“It may not happen in time for 2010, but we can’t worry about elections right now. We have to worry about leading the country in the right direction.”

By John Reichard, CQ HealthBeat Editor

December 22, 2009 – Tales of crankiness abound on Capitol Hill as Christmas Eve approaches and the Senate remains in session, but Senate staffer David Reynolds was practically giddy with good cheer when reached by telephone Tuesday morning. That’s because the Senate appears to be on the verge of voting to approve a dramatic expansion of community health centers—which could bring badly needed health services to thousands of medically underserved communities across the United States over the next several years.

Asked about the coming vote, Reynolds, the senior health policy adviser to Sen. Bernard Sanders, I-Vt., chuckled in disbelief. “ Oh, we’re very excited,” he said. “I started the first health center in Vermont 35 years ago and never in my wildest dreams imagined we’d be talking about covering 45 million Americans.”

A provision secured by Reynolds’ boss in the Senate health care overhaul bill (HR 3590) would add $10 billion in funding to community health centers, apart from the expanded insurance coverage the legislation would provide. The House-passed bill (HR 3962) allots $14 billion, so any House-Senate conference is likely to bring sharply expanded funding thanks to late negotiations by Senate Majority Leader Harry Reid, D-Nev., to win a “yes” vote from Sanders on the overhaul.

Forty-five million—or thereabouts—is the figure people typically use when they talk about the number of uninsured in the United States. But Reynolds was talking about something else when he used the 45 million figure—the number of people who would get care at community health centers under the legislation.

About 20 million Americans are treated at the centers now, Reynolds said, and the overhaul would add another 25 million, bringing the total to 45 million. Reynolds also said 60 million Americans live in medically underserved areas such as rural America and the inner cities, so the overhaul could do much to fill unmet need for primary care.

Because many Americans live in parts of the country where health care is scarce, expanded insurance coverage alone won’t get the job done, he noted. The centers currently treat both the uninsured and the insured but there aren’t enough of them. Expansion of community health centers works hand in glove with expanded insurance to ensure access to actual care, Reynolds said.

Reynolds also emphasized that the centers are a good value.

In areas that have centers, health care spending per year on people who use centers is $1,000 per year less than for people who don’t because “it gives them an access point” to get care promptly and avoid the need for costlier care later, he said.

Reynolds pointed to a George Washington University study that says spending $14 billion on community health centers and the National Health Service Corps over the next five years would save $23 billion in Medicaid costs alone. “So it’s, what’s not to like, you know?” he said.

The corps, which pays many of the medical education costs for doctors, dentists and nurses who agree to practice for a period of time in underserved regions, accounts for about half of the staff delivering treatment in community health centers.

“We’re talking about covering 30 million people with insurance for a trillion dollars over 10 years,” Reynolds noted. “Look what we’re going to do with $14 billion over five years for 25 million Americans who are going to have access to primary health care that they don’t currently have.”

It’s an apples-and-oranges comparison because the centers don’t provide hospital care. But Reynolds emphasized that the centers reduce the need for costly hospital care. They are “required to have 24-7 response capability” and that “reduces emergency room use,” he added.

A self-avowed socialist, Sanders may seem like a wild-eyed radical to some, but community health centers got strong support from Republicans in the Bush years as well as from Democrats. Reynolds, who wrote his dissertation on the broad political support the centers enjoy, noted that liberals like them because they “empower communities” and conservatives like them because they acknowledge that there are areas where market forces don’t work and that the centers plug the gap.

President George W. Bush did much to bring federal appropriations up to their current level of $2.2 billion a year. The overhaul legislation would layer on a guaranteed stream of funding over five years of up to $14 billion. Sanders, of course, would prefer that number, which was negotiated in the House by Democratic Whip James E. Clyburn of South Carolina.

Reynolds said the added funding would bring either a center or satellite clinic to 10,000 more communities across the United States, up from 7,500 now. The money in the House bill is for operating expenses, but the Senate language provides $1.5 billion for construction costs. In many instances, however, communities are able to convert existing space into centers or doctors get grants to convert their offices into community health centers, Reynolds said.

Of the $14 billion in the House bill, $1.75 billion over five years would go to expand the National Health Service Corps, more than doubling its current yearly budget, he said.

By Jane Norman, CQ HealthBeat Associate Editor

December 21, 2009 –The American Medical Association (AMA) threw its weight behind the Senate health care overhaul bill Monday after changes were made to appease physicians, bringing aboard a group whose support was viewed as influential to passage of the House health care measure.

Cecil Wilson, president-elect of the AMA, appeared at an early-afternoon press conference with Democratic leaders to say that his group has been in “close communication” with leaders during the past few weeks. He said the AMA was happy that the bill (HR 3590), thanks to a manager’s amendment, now increases bonus payments to primary care physicians and general surgeons in medically underserved areas while not cutting payments to non-primary care physicians. In addition the amendment eliminates a tax on physician services for cosmetic surgery.

“We will work to resolve issues of concern to physicians such as the creation of a Medicare payment board, quality improvement and Medicare data release initiatives,” said Wilson, an internist from Florida. While a permanent fix for cuts in the Medicare physician payment system is not part of the deal with Senate Democratic leaders, “we will continue to work closely with them to get that solution,” he said. A two-month patch to avoid cuts in doctor payments is part of a defense appropriations bill (HR 3326) signed into law by President Obama on Saturday.

Another big plus for doctors was the Senate’s decision to drop a proposal to allow people age 55 to 64 to buy in to the Medicare program, which pays lower rates than private insurance. Wilson said afterward that physicians made their unhappiness with that idea very clear.

Wilson also said that the AMA was also pleased that an enrollment fee was eliminated from the Senate bill that would have required physicians to pay for participating in the Medicare and Medicaid programs. He said the fee initially was set at $300 per physician, then was lowered to $200 and then was eliminated. “The ostensible reason for that fee was to help cover some of the expenses for fraud and abuse kinds of activity,” he said. “What we would say is that is something society ought to bear, that it’s inappropriate to put a fee on physician payments, in essence.”

The AMA is committed to change and realizes no bill is perfect, he said. “What we also said is we’re not going to stand on the street corner and yell it,” said Wilson. “What that leads us to is a process which says at the end of the day, when we are approaching conference committee and what the results will be from that, we will look at the whole package.”

A major issue is the viability of the Medicare program and adequate payments for doctors under the payment formula, he said. The AMA has had assurances from Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., that “it is important to them as well,” Wilson said. Earlier this year senators defeated another bill (S 1776) that would have prevented future cuts in doctor fees, with some Democrats saying they could not support it because it would have added $247 billion to the deficit over the course of a decade.

The House on Nov. 19 approved HR 3961, which create a new Medicare payment formula for physician services. It would block a 21 percent cut scheduled to take effect in January 2010, and increase the payment rate based on the Medicare economic index.