Senate Democrats Win First Skirmish Over Patients’ Rights Bill

Sponsors of a sweeping patients’ rights bill survived their first serious test Thursday, as the Senate voted, 52 to 45, to block a Republican amendment that threatened to derail the health insurance measure.

But long-term prospects for the patients’ bill were further clouded Thursday by a new pledge from the White House--this time in writing--that President Bush is planning to veto the legislation unless it is rewritten to his liking.

The two developments served as pointed reminders to newly empowered Senate Democrats that a health care bill they made their first legislative priority faces daunting GOP obstacles.

The legislation would create an array of new protections for patients in health insurance plans, from guarantees of access to specialists to expanded rights to sue health plans over treatment denials.

The bill’s sponsors said they were caught off guard when the White House, already on record as opposing the legislation, spelled out why in a detailed, three-page statement immediately read on the Senate floor and widely circulated on Capitol Hill.

“We’re enormously disappointed in this response,” said Sen. Edward M. Kennedy (D-Mass.), one of three co-sponsors of the patients’ bill. “We hope that when we pass [the Democrat-backed bill], the president will take another look.”

The White House statement listed several complaints about the measure, charging that it fails to make litigation “the last resort,” could allow “open-ended and unpredictable lawsuits against employers” and could raise health care costs so sharply that hundreds of thousands of people might lose their coverage.

The measure’s sponsors called the letter a distortion of their bill. The White House statement “could have been written by the HMO industry itself,” Kennedy said.

In its vote Thursday, the Senate beat back an amendment offered by Sens. Tim Hutchinson (R-Ark.) and Christopher S. Bond (R-Mo.). The amendment sought to carve out expanded tax breaks for small businesses and self-employed individuals by letting them deduct the full cost of health care coverage. Under existing tax law, small businesses are allowed to deduct only 60% of health care costs.

The amendment’s sponsors said they were trying to eliminate a tax code inequity, saying that corporations are allowed to deduct all of their health care costs and that small businesses should be allowed to do the same.

The idea has broad support in the Senate. But Democrats closed ranks to vote down the amendment largely because it could have scuttled the patients’ rights legislation on a technicality--a constitutional requirement that tax measures originate in the House. If the amendment had passed and been attached to the patients’ bill, the entire package of legislation could have been shelved indefinitely by any House member who raised a so-called blue slip objection.

The 49 Democrats voting against the amendment were joined by three Republicans: Sen. Lincoln Chafee of Rhode Island; Sen Charles E. Grassley of Iowa and Sen. John McCain of Arizona, a co-sponsor of the patients’ rights bill. Three senators did not vote: Jeff Sessions (R-Ala.), Zell Miller (D-Ga.) and James M. Jeffords (I-Vt.).

Republicans are expected to continue offering amendments that would carve out new tax breaks in the health care bill. Sen. Judd Gregg (R-N.H.), who is managing the floor debate for his party, said Thursday’s setback “will not dampen our spirits.”

Gregg also praised the White House for stepping up its attack on the bill. Gregg said Bush “is making it clear that there are going to be parameters” to any patients’ rights measure that becomes law.

Administration officials are mindful that Bush’s posture risks upsetting voters who, polls indicate, want legislation that expands patients’ power in dealing with health maintenance organizations. With that in mind, Bush in the statement stressed that he “strongly supports passage of a patients’ bill of rights this year.” But he said he will veto the Senate Democrats’ version “unless significant changes are made.”

Bush’s opposition is largely focused on the bill’s provision to allow HMOs to be sued in state courts, with no limits on pain-and-suffering damages.

Bush backs an alternative bill that would restrict such lawsuits to federal courts and cap pain-and-suffering damages at $500,000.

House Republican leaders plan to offer their own version of a patients’ rights measure that is likely to contain a provision to allow, under some circumstances, suits in state court against HMOs. On Thursday, House Speaker J. Dennis Hastert (R-Ill.) said he believes administration officials could support the measure because “it might be the best boat they have going out of the harbor.”

Uncertain, however, is whether such a compromise would satisfy Democrats.