Showdowns set on two key issues in healthcare debate

Congressional Democrats this week will push toward showdowns on two of the toughest issues in the healthcare debate: whether to create a government alternative to private insurance, and how to pay the approximately $1-trillion cost of the overhaul.

Neither issue will be settled until after the House and Senate have voted on complete bills and start negotiating the final legislation. But this week’s intensive effort will provide the starkest display yet of the political fault lines the party faces as lawmakers search for a path to agreement. And it could help define what any compromise would look like.

In the Senate, members of the finance committee will for the first time formally debate the public plan, which would compete with private insurers to help ensure affordable coverage for all.

In the House, Democratic leaders are aiming to forge a consensus within their party over how to pay for the massive initiative -- by taxing the wealthy, taxing insurance companies that offer high-end plans, or both.

Political forces outside Washington are intensifying. On the eve of the Senate panel’s vote, liberal groups on Monday aired TV ads criticizing key finance committee members for opposing a public option.

In the home state of Chairman Max Baucus (D-Mont.) -- whose bill before the committee does not include a public plan -- an ad by the Progressive Change Campaign Committee and Democracy for America featured a father facing large medical debts because his insurance did not cover his heart-disease treatment.

“Sen. Baucus . . . whose side are you on?” the man asks.

A similar ad has run in Maine, the home state of Sen. Olympia J. Snowe, the only Republican member of the finance committee who is even considering supporting the bill.

Democratic leaders are scrambling to ready legislation for debate on both the House and Senate floors by mid-October. The Senate has always been considered a tougher venue for healthcare legislation because it usually takes a 60-vote majority to avoid a filibuster and pass controversial legislation.

The Democrats’ grip on the Senate was tightened Friday when Paul G. Kirk Jr. was sworn in as Massachusetts’ junior senator, an interim replacement for the late Sen. Edward M. Kennedy. But not all Democrats in the chamber support the public option.

The party’s divisions will be in full view today in the finance committee, which Sen. Charles E. Schumer (D-N.Y.) has called the “least friendly battlefield” for the public option that is backed by liberal lawmakers.

That is because the committee includes a solid bloc of centrist Democrats such as Blanche Lincoln of Arkansas, who is facing a potentially tough fight for reelection in her conservative home state in 2010.

Budget Committee Chairman Kent Conrad (D-N.D.), who also represents a Republican-dominated state, has said: “I don’t think a government-run plan best fits this culture.

“A plan that’s not government-run has the best chance of succeeding in being passed into law.”

Public option amendments by Schumer and Sen. John D. Rockefeller IV (D-W.Va.) are expected to be blocked by a coalition of those centrists and all the panel’s Republicans.

But in the process, proponents hope that the issue will get more attention from a public that seems inclined to support a government alternative. A recent New York Times/CBS News poll found that nearly two-thirds of those surveyed supported the creation of a public insurance plan.

The case for a government option is based on concern that the overhaul bill requires almost every American to have insurance but includes no direct controls over the premiums private companies can charge.

The result, some fear, is that families of modest means will be required to buy policies they cannot afford. A government option, the argument goes, will guarantee at least one affordable policy and put competitive pressure on private companies to control prices.

But critics say the public option will drive most private insurers out of business because it will always be able to under-price them -- the first step on the path to government domination, if not total control, of the health insurance market.

In the House, Democratic leaders are tiptoeing through another political minefield as they prepare for floor debate on their version of the healthcare bill, which would cost more than $1 trillion over 10 years as approved by three committees.

As the leadership last week worked behind closed doors to refine the bill, they aimed to meet two of President Obama’s goals: Stay within a $900-billion spending target, and offset the cost with tax increases or spending cuts so it does not increase the deficit.

The bill by the Ways and Means Committee would raise revenue for the program by imposing a surtax on upper-income taxpayers: individuals with more than $250,000 annual income and couples earning $350,000 a year or more.

Amid complaints that the tax would hit too many people who -- especially in high-cost states like California -- are not really rich, House Speaker Nancy Pelosi (D-San Francisco) has said she wants the income threshold to be raised to $500,000 for individuals and $1 million for couples. But that would reduce the revenue the tax would raise.

Pelosi said last week that she was considering another option, taxing insurance companies that offer expensive health policies known as “Cadillac” plans. That idea is included in Baucus’ version of the bill but is opposed by Democratic Party stalwarts such as the labor movement.

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janet.hook@latimes.com

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Contentious debate awaits

What’s coming up on the healthcare overhaul:

* The Senate Finance Committee this week will try to finish work on the bill, with key votes today on whether to include a government health insurance option to compete with private plans.

* Senate Democratic leaders will try to combine the finance panel’s bill with a more liberal version approved by the Senate health committee before opening debate on the Senate floor.

* House Democratic leaders, in meetings that resume today, are aiming to combine three versions of their healthcare legislation and release a single bill by the end of the week.

* The House and Senate bills will have to be analyzed by the nonpartisan Congressional Budget Office to assess their cost and impact before floor debate can begin. The analysis could take 10 days or more to prepare.

* Leaders in both chambers hope to begin floor debate by mid- to late October, then complete action on a final compromise bill by the end of the year.

Source: Los Angeles Times