Senate healthcare bill set to pass by Christmas

Reporting from Washington — 

After a dramatic month of sometimes round-the-clock negotiating and deal-making, Senate Democrats came together Saturday behind sweeping healthcare legislation, providing a powerful boost for President Obama’s top domestic policy goal.

The breakthrough came after Senate Majority Leader Harry Reid (D-Nev.) and his lieutenants engineered a delicately crafted compromise to prevent federal funding of abortions, the same issue that nearly stopped the House from passing its healthcare bill six weeks ago.

With the deal, Nebraska Sen. Ben Nelson, a strong opponent of abortion, became the 60th and crucial last member of the Democratic caucus to line up behind the healthcare legislation.

That paved the way for Reid to introduce a final package of changes to his 2,074-page bill and file the necessary procedural motions that should allow Democrats to quash an expected series of Republican filibuster attempts over the next several days. The Senate now remains on track to pass its version of the bill by Christmas.

“Today is a major step forward for the American people,” Obama said Saturday afternoon at the White House as a thick layer of snow blanketed the capital. “After a nearly century-long struggle, we are on the cusp of making healthcare reform a reality.”

Republicans continued their attacks on the legislation, criticizing proposed Medicare cuts, tax increases and a host of other issues. GOP leaders vowed to try to slow the passage of the measure, saying that Democrats were attempting to push it through too quickly.

“This bill is a legislative train wreck of historic proportions,” Minority Leader Mitch McConnell of Kentucky said at a news conference.

No Republicans are expected to back the $871-billion measure, which is projected to provide coverage to an additional 31 million people by 2019.

If the Senate bill passes, negotiations over differences with the House could drag on for months, although Democrats hope to finish work in January.

Getting a bill to Obama’s desk quickly is a top priority for many Democrats, who are eager to move past the healthcare issue and turn to jobs and other economic issues that voters now consider more important.

But Saturday’s abortion deal with Nelson marked a crucial milestone in Democrats’ drive to enact the most extensive change to the nation’s healthcare system since the creation of Medicare 44 years ago.

The core of the last-minute agreement seeks to guarantee that taxpayer money would not be used to pay for abortions, through the use of a new accounting formula.

If a woman receiving a federal subsidy for health insurance chose a policy that covered abortion, as many policies now do, she would have to send two payments to her insurer, one of which would be placed in an account reserved for abortion coverage.

That method is less restrictive than the House healthcare bill, which banned any insurers from offering abortion coverage to any American who receives insurance subsidies. That formula was devised by a group of socially conservative House Democrats.

Reid reached the Senate compromise after days of meetings involving Nelson, White House officials and other lawmakers, including Sen. Barbara Boxer (D-Calif.), a leading supporter of abortion rights.

Until late Friday night, Democratic leaders, though outwardly optimistic, had been unsure they would be able to persuade the famously independent Nelson to come over, according to sources familiar with the talks.

They had pledged to provide additional aid to his home state to offset the cost of expanding Medicaid insurance for the poor. (Most other states have had to split that cost with the federal government.)

And they promised to help shield some nonprofit insurers from a new excise tax on the industry. But for days, they could not find a way to break the abortion impasse.

Negotiations resumed in Reid’s offices just off the Senate chamber at 9:30 Friday morning.

Joining Reid and Nelson were Sen. Charles E. Schumer (D-N.Y.), who had helped broker earlier healthcare deals, and White House Deputy Chief of Staff Jim Messina and White House senior advisor Pete Rouse, both Capitol Hill veterans. Late in the afternoon, Reid called Boxer in to negotiate for the abortion rights advocates.

To allow the two sides to strategize and call outside allies in private, Nelson was set up in one room of Reid’s leadership suite; Boxer’s war room was in a conference room on the other side of the suite. Reid and Schumer shuttled between the two.

Talks broke up around 8 p.m. so that both sides could vet the abortion compromise with their allies. Nelson promised to return in half an hour.

As 8:30 and then 9 o’clock passed, Reid, Schumer and the other negotiators feared that the deal was off. But Nelson returned around 9:30, pronouncing himself ready to accept a deal in principle. He said he would not say anything publicly until he saw the language in Reid’s amended bill the next morning.

“I believe in my heart of hearts that this handles the whole question of funding abortion,” Nelson told reporters Saturday morning, saying that he did not believe the bill was perfect, but that he thought it was important to keep moving.

Boxer and other abortion rights advocates also expressed support. “We said all along that we wanted to ensure there was a firewall between private and public funds -- this compromise achieves that,” Boxer and Sen. Patty Murray of Washington state, the No. 4 Democrat in the Senate, said in a joint statement

GOP lawmakers and some antiabortion groups immediately lambasted the compromise, which Oklahoma Sen. Tom Coburn said “threw unborn babies under the bus.”

The changes were incorporated into a 383-page amendment that Reid used to accommodate the many demands of members of his diverse caucus.

Reid’s changes, the so-called manager’s amendment, would increase spending slightly but still would reduce the deficit $2 billion further than the original legislation, pushing savings to $132 billion over the next decade, according to the nonpartisan Congressional Budget Office.

The most politically explosive change is the elimination of a new government insurance plan for Americans who do not get insurance through work, a long-cherished dream of the left.

Instead of that “public option,” the modified bill would authorize the federal government to contract with two insurers, one a nonprofit, to provide consumers nationwide with alternatives to plans offered by the private market.

The insurers would be subject to an additional level of federal oversight to ensure that they offered quality, affordable coverage.

That change pleased conservative Democrats wary of a new government program.

Reid’s modified bill would tighten regulations on insurers, requiring them to commit at least 80% of their annual expenses to paying medical claims -- and at least 85% for insurers that sell plans to large companies.

At the request of Sen. Dianne Feinstein (D-Calif.), the bill would also give state and federal officials greater authority to regulate how much insurance companies raise their premiums each year, a provision that consumer advocates consider crucial because the legislation would require almost all Americans to buy health insurance.

Reid did not slash a proposed tax on high-cost “Cadillac” health plans, despite pleas from labor unions, which fear the tax would hit many of their members, who have given up wage hikes over the years in exchange for more-generous health benefits.

The bill imposes a 40% tax on every dollar of insurance premiums above $8,500 a year for individuals and $23,000 for families, with some exceptions.

Reid also further boosted the Medicare payroll tax, from 1.45% to 2.35%, on individuals who make more than $200,000 and couples who make more than $250,000.

noam.levey@latimes.com

janet.hook@latimes.com

Kim Geiger in the Washington bureau contributed to this report.