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Ways and Means Panel Approves Its Health Overhaul Provisions

By Richard Rubin, CQ Staff

July 17, 2009 -- Democrats on the House Ways and Means Committee defended their health care plan against Republican attacks, maneuvering it out of committee on a 23–18 vote.

The final vote came at 1:16 a.m. Friday, more than 16 hours after the markup started Thursday morning. All of the committee's Republicans voted against the bill (HR 3200). They were joined by three Democrats Earl Pomeroy of North Dakota, Ron Kind of Wisconsin, and John Tanner of Tennessee.

"I'm proud of what we have done. I have no clue as to what the other committees have done [or] where we go from here," said Chairman Charles B. Rangel, D-N.Y., afterward. The House Education and Labor Committee approved its portions of the bill, 26–22, Friday morning after a markup that ran through the night. Energy and Commerce resumed its markup Friday morning and is expected to take until Wednesday to complete it.

The defeated amendments from Ways and Means Republicans included attempts to eliminate a government-run insurance plan, eliminate a requirement for employers to provide coverage to workers, and prevent the government from using research on the comparative effectiveness of treatments to make coverage decisions on the basis of cost.

Republicans also tried to remove all of the tax increases, require states to limit medical malpractice lawsuits, order members of Congress to enroll in the public plan, and prevent abortions from being covered under the essential benefit package.

But all of those efforts and dozens of others failed as Democrats hung together behind the bill they spent months crafting.

"The other side is trying to make people afraid," said Jim McDermott, D-Wash., criticizing the tenor of the GOP amendments. "What we ought to be afraid of is a system of private health care in this country that has left almost 50 million people without health insurance."

Major Provisions of the Bill

The bill would expand health insurance by requiring individuals to get coverage and mandating that employers provide coverage or pay a penalty. It includes subsidies for low-income workers and creates a government-run "public option" to compete with private insurance companies as part of a health insurance exchange through which consumers could compare plans.

The bill, estimated to cost more than $1 trillion, would be paid for partly by reducing costs within existing programs such as Medicare. It also includes a $544 billion surtax on the adjusted gross income of upper-income Americans, with a top rate of 5.4 percent for individuals making $800,000 and married couples making $1 million. The surtax would affect the top 1.2 percent of taxpayers.

A chairman's amendment introduced Thursday would raise $8.2 billion over 10 years by preventing taxpayers from using tax-advantaged flexible spending arrangements, health reimbursement arrangements, and health savings accounts for purchases of over-the-counter medications.

It also includes a $4 billion provision that would allow more people to avoid paying taxes on the value of employer-provided health insurance. The provision would allow the tax exclusion for all eligible beneficiaries under a health plan, expanding it to include same-sex couples. Currently, people who receive health insurance benefits through the employers of their same-sex partners must pay taxes on the value of those benefits.

GOP Objections

Republicans pursued a range of arguments against the bill. They contended that it would reduce choices for consumers, lead to too much government involvement in health care and hurt the economy.

"It would raise taxes and force employers to cut jobs at a time when we are in the middle of the most severe recession in decades," said Wally Herger, R-Calif.

Republicans also argued that the bill would cost too much while complaining it would lead to rationing of care as a way to control costs.

Republicans also pressed Congressional Budget Office Director Douglas Elmendorf, who attended the markup, to repeat comments he had made earlier in the day to the Senate Budget Committee, where he warned that the health care legislation before Congress would not control costs enough to compensate for the increased federal expenditures from the coverage expansion.

Democrats tried to rebut the argument, citing numerous other pressures on federal spending. "It's disingenuous to just pick Medicare and not talk about the agriculture budget or the defense budget," Pete Stark, D-Calif., said.

But Elmendorf noted that Medicare and Medicaid are growing exceptionally fast, in a way that threatens the long-term fiscal outlook. He praised the House bill's demonstration cost-containment projects for those programs, but added that there is not yet enough understanding of how to change payment policies in a way that might make the system more efficient.

Under questioning from Chris Van Hollen, D-Md., Elmendorf said one way would be to give the secretary of Health and Human Services more flexibility to change payment methods.

Rejected Amendments

Republicans teed up a series of hot-button amendments for the beginning of the markup. The committee voted 15-25 along party lines to reject an amendment from Paul D. Ryan, R-Wis., that would have eliminated the public plan. Ryan argued that the plan would have unfair advantages against private competitors and employers would stop providing health coverage, pushing people into the exchange where the public plan is an option.

The committee voted 18–21 to reject an amendment from Dean Heller, R-Nev., designed to require members of Congress and their dependents to enroll in the public plan.

"If the public plan is good enough for millions of our constituents, it should be good enough for members of Congress," said Heller, whose proposal was backed by three Democrats: Shelley Berkley of Nevada, John Yarmuth of Kentucky and Artur Davis of Alabama. The Senate Health, Education, Labor and Pensions Committee had adopted a similar amendment by Tom Coburn, R-Okla., to its health care overhaul this week.

The committee defeated, 15–26 along party lines, a Herger amendment that would have prevented comparative effectiveness research from being used to make coverage decisions based on cost.

An amendment aimed at limiting non-economic damages in medical malpractice cases generated a tense debate between McDermott and Geoff Davis, R–Ky., who contended that the defensive approach to medicine forced by the fear of lawsuits contributed to unnecessary procedures being performed on his dying mother. McDermott said it was issues with end-of-life directives, not malpractice lawsuits, that prompted any unwanted procedures. The amendment was rejected, 15–26, along party lines.

The committee rejected an amendment that would have prevented abortions from being included in the essential benefit package created under the bill, except in cases of rape and incest or to save the mother's life. Under the bill, federal officials make that determination.

"If this amendment is not included, this bill would represent the most massive expansion of abortions in our country since Roe vs. Wade," said Sam Johnson, R-Texas.

The amendment was rejected, 18–23, with all Republicans joined by Pomeroy, Tanner and Bill Pascrell Jr. of New Jersey. A similar amendment from Eric Cantor, R-Va., also attracted the vote of Artur Davis, but went down 19-22.

Democratic Concerns

Some Ways and Means Democrats raised concerns about the bill. Artur Davis said he still sees geographic disparities in the bill but said he would vote for it in markup and seek changes before floor consideration. He said he wanted a "hardship exemption" for small businesses that would otherwise be subject to the employer mandate.

Pomeroy said the public plan has a "fatal flaw," because it bases its reimbursement rates on Medicare, a formula that he says would adversely affect providers in his home state. That opinion led him to vote for an amendment from Charles Boustany Jr., R-La., that would have prevented providers from being forced to participate in the public plan. He was joined by fellow Democrats Berkley, Tanner and Kind, but the proposal was defeated, 19–22.

An amendment from Peter Roskam, R-Ill., would have based payment rates on the private market, rather than on Medicare. But that proposal was defeated, 19–21, with Tanner, Pomeroy, Kind and Bob Etheridge of North Carolina voting yes.

Republicans had one small victory late Thursday. By voice vote, the committee removed a provision in the chairman's amendment that would have expanded who can file certain lawsuits on behalf of Medicare. Rangel said Democrats agreed that the issue needed further study.

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