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Senate Finance Committee Approves Health Care Bill

By Alex Wayne and Kate Davidson, CQ Staff

October 13, 2009 – Republican Olympia J. Snowe of Maine gave critical momentum to a Senate health care overhaul bill Tuesday as she joined panel Democrats in voting for the Senate Finance Committee's complex health care overhaul.

The vote was 14–9, with Snowe joining all 13 committee Democrats in support of the measure, which would cost an estimated $829 billion over 10 years.

The committee's approval had not been in serious doubt, but Snowe had been closely watched as an indicator of nominal bipartisan support for the Finance measure.

The legislation now moves to the office of Senate Majority Leader Harry Reid, D-Nev., who will negotiate with other Democrats and perhaps Snowe to combine the Finance measure with a bill approved in the summer by the Health, Education, Labor and Pensions (HELP) Committee.

Finance Chairman Max Baucus, D-Mont, said his committee's bill is "a balanced package" that deserves support from both parties. His bill, the product of months of negotiations that involved Snowe and two other Republicans who finally walked away from the package, is markedly less liberal than the HELP measure. Most strikingly, it would not create a new government-run insurance plan to compete with private insurers.
Snowe said that the Finance bill was a better choice than not acting on an overhaul at all.

"When history calls, history calls," Snowe said, "and I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issue of our time."

But she said her support for the bill on Tuesday did not mean she would continue to support the legislation after it was merged with the HELP version—and ultimately, with a House measure (HR 3200) that has yet to be finalized.

"My vote today is my vote today," she said. "It doesn't forecast what my vote will be tomorrow."

The Finance bill would expand Medicaid and create new health insurance exchanges, or marketplaces, offering tightly regulated and subsidized private plans to the 45 million Americans estimated to be without insurance. About 94 percent of the legal population would have coverage under the bill, according to the Congressional Budget Office, compared with about 83 percent today.

Additionally, the bill would impose new restrictions on health insurers' business practices, preventing them from denying people coverage for pre-existing medical conditions or dropping customers once they fall ill. All Americans would be required to obtain insurance.

"Our actions here will determine whether we extend better health care to more Americans," Baucus said before the vote. "Now is the time to get this done."

The bill would be paid for largely by reducing the growth of spending in Medicare, the health entitlement for the elderly, and by levying new taxes on high-cost insurance plans and various sectors of the health care industry, including insurers, drug companies and manufacturers of medical devices.

Republicans warned that the bill would increase taxes on middle-income families, reduce Medicare coverage, raise insurance premiums and lead to health care rationing.

Republicans Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, who had joined Snowe in the months-long quest for a bipartisan bill, said they could not support the final result.

And Grassley, the Finance Committee's ranking Republican, said the bill became more partisan during the course of a two-week markup.

"This bill is already moving on a slippery slope to more and more government-controlled health care," he said.

Another closely watched senator, Democrat Blanche Lincoln of Arkansas, indicated she would vote for the bill.

The legislation, she said, "I do believe builds on what works in health care, makes it better, and . . . I think makes greater efficiencies."

Lincoln is the only Democrat on the Finance Committee who faces a tough re-election contest in 2010. She previously voted against amendments that would have added a public insurance plan to the bill.

Insurance Industry Report
Democrats spent time Tuesday countering an attack on the bill by the insurance industry. On Sunday, the insurers' trade association, America's Health Insurance Plans (AHIP), released a report which found that insurance costs would rise faster under the legislation than if Congress did not act.

Democrats said the report, by the accounting firm PricewaterhouseCoopers, was significantly flawed. "The insurance industry should be ashamed of this report," said Sen. John Kerry, D-Mass., adding that its conclusions were "not valid."

PricewaterhouseCoopers itself acknowledges in the report that its study was limited. AHIP instructed the firm to examine only four issues related the Finance bill—penalties for people who don't obtain health insurance, excise taxes on high-premium insurance plans, cost-shifting from government insurance plans to private payers, and fees that Democrats would assess on different health industry sectors—without considering the impact of other provisions aimed at reducing health costs or subsidizing families' insurance premiums.

"We have not estimated the impact of the new subsidies on the net insurance cost to households," PricewaterhouseCoopers said in its report." Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."

But with those caveats, the accounting firm estimated that the bill would cause average insurance premiums for family coverage to double, to about $26,000 a year, by 2019. Absent the bill, premiums would rise to about $21,900, the firm said.

Premiums for individual coverage and insurance costs for businesses would similarly increase at a faster rate under the bill, the firm said.

A spokesman for AHIP said of the Finance bill, "The current legislation is unworkable and will make health care coverage less affordable for families and employers. That is the opposite of what health care reform is supposed to accomplish."

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