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House Democrats Conference by Phone to Plan for Health Care Negotiations

By Drew Armstrong, CQ Staff

January 7, 2009 --House Speaker Nancy Pelosi told rank-and-file members on Thursday that congressional negotiators do not plan to accept the Senate's health care overhaul in its entirety, and that she will fight for key provisions that are in a House overhaul plan.

"What they said is, they were standing up for the House position," Rep. Diana DeGette, D-Colo., said after a telephone caucus meeting of House Democrats to discuss the state of negotiations between the House and Senate on their health care bills (HR 3962, HR 3590).

House Democratic leaders said they spoke to roughly 175 members during a mass conference call, which lasted over an hour. According to multiple lawmakers on the call, the session was a chance for members to ask questions about the state of negotiations with the Senate and the White House, and also to voice concerns about specific parts of the bill.

During the call, almost every major area of disagreement with the Senate came up for discussion: a proposed tax on high-cost "Cadillac" insurance plans in the Senate bill, restrictions on abortion services, the timetable under which changes in the health insurance market would take effect and whether to include the government-run "public option" that is in the House bill.

House Education and Labor Chairman George Miller, D-Calif., said much of the time was devoted to a question-and-answer session. "Members were asking us about the specifics of the bill, things they were interested in, things their constituents have asked them about," said Miller. "Obviously, no decisions have been made on any of this."

Negotiations will continue when the House returns from its recess, on Jan. 12.

According to a Democratic aide on the call, one area of specific concern from several members is how the tax on high-cost insurance plans would affect individuals in their districts. According to the aide, several members complained their constituents would be adversely affected, because their local insurance markets feature unusually high premiums. The lawmakers noted that even individuals who do not have the type of "Cadillac" plans that the tax is meant to target could still wind up penalized under the Senate's overhaul plan.

House Democrats are scheduled to meet again, this time in person, on Jan. 12, when they will hear more from leaders and begin working through the many issues that divide the two chambers.

One area where House negotiators hope to prevail is in the use of a national "exchange" to sell private insurance to uninsured people, instead of the state-by-state system envisioned in the Senate bill.

"That's a major bone of contention for myself and for a lot of House members, that we want a national exchange," said Frank Pallone Jr., D-N.J., chairman of the House Energy and Commerce Committee's Health Subcommittee. Pallone expressed concern that a state-based system would leave many regulatory gaps and allow some states to avoid creating robust marketplaces, leaving consumers vulnerable to high coverage costs.

Some members also are pressing negotiators to maintain the House health bill's position and make the overhaul's major changes go into effect in 2013, a year earlier in the Senate. Aides said there is concern from leadership that doing so would increase the cost of the bill substantially beyond the president's $900 billion target.

In spite of the House leaders' assurances that they will not simply accept the Senate bill, Pelosi and other top Democrats have already indicated several areas where they likely will end up making serious concessions to the Senate. These include eliminating the public plan and including some aspect of the Senate tax on high-cost plans in order to raise revenue and pay for the overhaul.

"I think the House is concerned about that, and the leadership is concerned about it," DeGette said of the tax on high-cost plans. "But they feel people need to let the White House know about their concerns."

Obama supports the Senate position on taxing high-cost plans and reiterated his position this week.

The House and Senate have yet to figure out how to bridge the gap between how the two bills raise revenue. Democratic leaders and top committee members say they are looking at raising the threshold at which plans would be hit by the tax, or altering the rate at which the threshold is allowed to grow.

Currently, plans costing $8,500 or more for individuals, or $23,000 or more for a family, would be subject to the tax. That rate is allowed to grow at inflation plus 1 percent.

Pallone said that there was discussion about changing the Senate tax and replacing some of the $148.9 billion in revenue it's expected to raise over a decade with the House health care bill's surtax on people making more than $500,000.

Pallone said the Senate tax proposal could be "pared down and replaced with some of those House pay-fors. . . . It's one of the major sticking points, but there are other issues."

The Senate, so far, appears to be holding fast to its position that the tax must be retained in any final agreement. Sen. John Kerry, D-Mass., has been a proponent of a higher threshold, but made clear in an op-ed Thursday that he opposes eliminating it during House-Senate negotiations.

"Let's fix it, not nix it," Kerry said in a column on the liberal blog The Huffington Post.

Alex Wayne contributed to this story.

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