Senate Bill Sets Lines for Health Showdown

By GREG HITT, JANET ADAMY and JONATHAN WEISMAN
 

The major new health-care overhaul bill that landed in the Senate on Wednesday sets the lines for a fall showdown over taxes, spending and coverage for millions of uninsured Americans.

 

The biggest beneficiaries of the Baucus bill would be people who lack insurance now, especially older people who have trouble buying coverage on their own. The Baucus plan would require insurers to accept all comers, even those who are already sick, and establish subsidies for lower- and middle-income Americans to buy insurance.

 

For Americans who already have coverage through their employers or Medicare -- by far the majority -- not much would change immediately in most cases. The biggest losers would include those who have especially generous health plans, which would be subject to a new tax aimed at insurers but that could be passed onto consumers.

 

The bill proposes to create a network of nonprofit cooperatives to compete with private insurers, not the government-run health plan liberals want and President Barack Obama has endorsed.

 

The price, put at $774 billion over 10 years by the Congressional Budget Office, and new taxes on health-care companies aroused opposition. Republicans denounced the bill as a big-government boondoggle, and it drew fire from the left as well. Labor unions slammed it as too harsh on middle-income Americans, who would have to pay up to $3,800 in penalties if they failed to buy insurance.

 

The White House responded coolly. "I don't think this is a mirror of what the president was talking about," White House spokesman Robert Gibbs said, stressing that Mr. Obama's primary focus is affordability of insurance.

 

Senate Minority Leader Mitch McConnell (R., Ky.) said the bill would impose new tax burdens on families and small businesses. "Only in Washington would anyone think that makes sense," he said.

 

Many businesses were warmer to the bill. The bill wouldn't require employers to provide insurance, a break with the more aggressive House bill. But it would require businesses that have more than 50 workers and don't offer insurance to reimburse government for part of the cost of any federal subsidies the workers receive -- up to $400 per worker.

 

Dan Danner, president of the National Federation of Independent Business, said the bill "makes significant steps" toward making it cheaper and easier for small businesses to buy insurance.

 

The unveiling of the bill will set in motion a busy fall in Congress. Lawmakers in both houses had put decisions on hold while Finance Committee negotiators were deliberating over the particulars of the Baucus proposal.

 

In the House, three committees had already passed versions of a health bill; House leaders must now decide how to combine these into a single bill for a floor vote. Passage of the overhaul faces tougher hurdles in the Senate, where Democrats control 59 votes, one short of the 60 needed to overcome a filibuster. Senate Democratic leaders must decide whether to seek 60 votes by uniting Democrats and peeling away one or two Republicans or use a parliamentary tactic that would necessitate only 51 votes -- but which would split the bill in two.

 

Democrats say the president's speech last week to a joint session of Congress reversed the momentum after a contentious summer and pushed the long-delayed Baucus bill closer to the finish line. "The president's speech put us on offense," said Rep. Jan Schakowsky (D., Ill.), an Obama ally on the House Energy and Commerce Committee. "The train is moving."

 

Sen. Baucus said on Wednesday that his legislation "is a balanced bill," adding: "It can pass the Senate."

 

Nevertheless, the Republican reaction to the Baucus bill showed the senator had failed so far in his main objective from the beginning -- to gain significant bipartisan support. None of the three Republicans with whom he has negotiated endorsed his bill, although one of them, Sen. Olympia Snowe (R., Maine), showed willingness to consider it.

 

The "chairman's legislation moves in the right direction, away from a government-run system," Ms. Snowe said. But she stressed "a number of issues still need to be addressed." She pointed to affordability of insurance, among other things.

 

The U.S. Chamber of Commerce, which represents three million businesses, said it was concerned that the new taxes on industry were too extensive and that new subsidies to help people buy insurance would ultimately cost taxpayers. "Overall, the bill still needs tremendous improvement," said Bruce Josten, an executive vice president for the group.

 

Liberals said the penalties in the Baucus bill on Americans who refuse to buy health insurance represent an unfair burden on people who make too much to qualify for help complying with the mandate to buy insurance,

 

Sens. John D. Rockefeller IV (D., W.V.) and Ron Wyden (D., Ore.) went to the White House Wednesday for private consultations with the president and expressed concern about the issue. "I'm going to do everything I can to fix the bill," Mr. Wyden said.

 

Mr. Baucus put the size of the bill at $856 billion over 10 years, while the Congressional Budget Office, which canceled out some new spending with payment cuts in Medicare and Medicaid, put the price tag at $774 billion.

 

The measure would broaden eligibility for Medicaid, the existing government health program for the poor, and it would create a new national insurance exchange, where individuals and small businesses could comparison-shop for policies.

 

Individuals and families would face penalties ranging from $750 to $3,800 for not buying insurance. People at the lower end of the income ladder would receive federal tax subsidies to defray the cost.

 

Insurers would be barred from imposing annual or lifetime limits on coverage, or dropping customers if they get sick.

 

To pay for the new subsidies and other spending, the Baucus bill proposes to restrict the rate of growth in certain Medicare spending. The bill would trim payments to private insurers who cover some people over 65 in so-called Medicare Advantage programs. It would also reduce the rate of growth in Medicare reimbursements for some services such as home-health care and medical imaging. The payment changes don't directly hit older people, but could have an indirect effect over time.

 

The bill also includes new taxes. The biggest measure would raise $215 billion over 10 years with a 35% excise tax on "gold-plated" insurance plans. The levy, which targets insurers, would tax the value of plans above $8,000 for individuals and $21,000 for families.

 

Insurers, drug makers, medical-device makers and clinical laboratories would all pay new annual fees based on market share. The Joint Committee on Taxation estimated those would bring in $93 billion over a decade.

 

Health-care providers reacted cautiously to the proposal. Insurers and hospitals have fought against a new government-run health insurance plan and like the Baucus bill because it doesn't include one. But insurers oppose the tax on generous plans, saying they will have to pass the costs on to consumers.