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Senate Finance Wraps Up Work on Health Care Bill; Final Vote Next Week

By Geof Koss, CQ Staff

October 2, 2009 -- The Senate Finance Committee wrapped up its debate on amendments to its health care overhaul early Friday, after adopting a bipartisan plan that would ease penalties for lower-income Americans who cannot afford to comply with the bill's mandates.

The committee now has finished debating the more than one hundred amendments offered to the bill. A final vote is possible next week, after the Congressional Budget Office scores the measure.

However, Finance Chairman Max Baucus, D-Mont., raised the possibility of having to reconvene to make tweaks if the bill "doesn't score well" at CBO.

"We'll come back and will have to make some adjustments," he said.

But he promised senators "a reasonable amount of time" to review the bill before the final vote.

The panel voted 22–1 late Thursday to accept an amendment by Charles E. Schumer, D-N.Y., and Olympia J. Snowe, R-Maine, that would provide penalty exemptions for taxpayers who cannot find health care coverage at 8 percent of their adjusted gross incomes. The hardship waiver in the chairman's mark was 10 percent, a level Schumer called "too high."

Schumer said the plan would prompt insurance companies to offer lower premiums. "This is the major amendment on affordability," he said.

It also would eliminate a penalty imposed in the first year the insurance exchange takes effect on any person who is not eligible for a waiver and does not purchase health care. In the second year of the exchange, 50 percent of the penalty would be imposed. The full penalty would go into effect in the third year of the law.

Snowe said she would press to further ease the fines on the Senate floor. "I would prefer to have no penalties, frankly," she said. Sen. Jon Kyl, R-Ariz., was the lone vote in opposition to the amendment.

The committee approved, 13–10, an amendment by John D. Rockefeller IV, D-W.Va., clarifying that the Medicare commission in the chairman's mark cannot propose certain changes to beneficiary premiums. Certain recommendations under Medicare Part C and Part D would be permitted. It also would refine several amendments that were adopted to the bill earlier.

The committee voted 14–8 to adopt an amendment by Blanche Lincoln, D-Ark., to limit deductions for executive compensation for health insurance providers to $500,000 if at least 25 percent of the firm's gross income is derived from the bill's mandates. Lincoln said it would be unfair for taxpayers to subsidize excessive payments. "This is a tax windfall for health insurance executive pay," she said.

But Kyl called it an "astoundingly bad precedent" for Congress to dictate limits on executive compensation for the private sector.

The committee also waded into the immigration debate, rejecting on a 10–13 vote a Kyl amendment that would clarify that legal immigrants must reside in the United States for five years to be eligible for tax credit in the bill.

Kyl noted that current law bars legal immigrants from Medicaid benefits for the same period.

"It would be inconsistent to deny people Medicaid and then allow them the benefits under this bill," he said.

But opponents said it was unfair to impose a coverage mandate on legal, permanent U.S. residents and then deny them the federal subsidy. Robert Menendez, D-N.J., noted that legal immigrants who serve in the military and pay taxes would be disqualified from the tax credit. "That clearly is a Catch-22," he said.

The committee rejected on a 9–14 vote another Kyl amendment that would have eliminated the health insurance providers' fee, which Republicans insisted would be passed on to consumers through higher premiums.

"They're going to be paid by lower- and middle-income Americans," said Charles E. Grassley of Iowa, the panel's ranking Republican.

A second Kyl amendment that would have eliminated the $2,500 cap on flexible spending accounts failed 10–13, as did the Arizonan's effort to eliminate fees on medical devices.

Earlier Thursday, senators by a 12–11 vote adopted an amendment by Maria Cantwell, D-Wash., that would allow states to opt in to a new federal health care plan for individuals between 133 and 200 percent of the federal poverty level who are not covered by Medicare. Under the program, 85 percent of the individual tax credit for eligible participants would be distributed to the states, which are authorized to negotiate rates with insurers.

Cantwell said the plan puts states "in the driver's seat" to negotiate lower insurance rates for their residents.

But Republicans said it was unclear how the plan would work in different regions, and expressed concerns that it would force low-income residents in participating states into the program.

"I just think there's a lot of questions," said John Cornyn, R-Texas.

Emily Ethridge contributed to this story.

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