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Senate healthcare bill poised for passage by Christmas

After a dramatic month of round-the-clock negotiating and deal-making on Capitol Hill, Senate Democrats unified today behind sweeping healthcare legislation that they can pass by Christmas, giving a powerful boost to President Obama’s drive to overhaul the nation’s healthcare system.

The breakthrough, engineered by Senate Majority Leader Harry Reid (D-Nev.) and his lieutenants, cleared a final roadblock over federal funding for abortion, the same issue that nearly stopped the House from passing a healthcare bill six weeks ago.

With the deal, Nebraska Sen. Ben Nelson, a strong opponent of abortion rights, 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 a series Republican filibusters over the next several days and pass a bill on Christmas Eve.

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“Today is a major step forward for the American people,” Obama said 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.”

No Republican is expected to back the $871-billion measure, which is projected to provide coverage to another 31 million people by 2019.

If it passes, the Senate bill will have to be reconciled with the legislation passed by the House, a process that could drag on for months, although Democrats hope to finish work in January.

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

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The core of the agreement seeks to guarantee that taxpayer money is not used to pay for abortions with a new accounting formula for women who get subsidies to buy insurance.

If a woman buys an insurance policy that covers 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 specifically for abortion coverage.

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

Reid reached the compromise after days of meetings and shuttle diplomacy 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 had been unsure they would be able to convince the famously independent Nebraskan 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, a provision that will be particularly helpful to insurance companies in Nebraska. 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 a.m. Friday morning, after a long night that had culminated in a 1:01 a.m. vote on a defense bill.

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Joining Reid and Nelson were Sen. Chuck Schumer (D-N.Y.), who has helped to broker healthcare deals, and White House Deputy Chief of Staff Jim Messina and White House senior advisor Pete Rouse, both 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 with offers and counteroffers.

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

As 8:30 p.m. and then 9 p.m. passed., Reid, Schumer and the other negotiators feared that the deal was off. But then, 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.

The exhausted negotiators took a call from Obama, who congratulated them on Reid’s speaker phone.

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

“You have to take the process that is in front of you and try to improve it, and that’s what I have attempted to do,” he said.

Abortion rights supports 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,” said Boxer and Sen. Patty Murray (D-Wash.), the No. 4 Democrat in the Senate, in a joint statement.

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GOP lawmakers and anti-abortion rights 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 multiple demands of members of his diverse caucus.

Reid’s amendment would make the bill slightly more expensive, but because new spending is offset, the modified bill would actually 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 a new government insurance plan for Americans who do not get insurance through work, a long-cherished dream of the left.

The modified bill would authorize the federal government to instead 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, although the Congressional Budget Office raised questions today about this scheme.

“Whether insurers would be interested in offering such plans is unclear, and establishing a nationwide plan comprising only nonprofit insurers might be particularly difficult,” the agency concluded in its analysis.

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 by allowing states to prohibit insurers that hike their rates too much from offering plans on new insurance exchanges.

Many consumer groups believe rate regulation offers a vital protection for consumers if they are required to buy health coverage. And Feinstein and others are pushing for even stronger regulatory language in the final legislation that is combined with the House.

Reid did not slash a proposed tax on high-cost, so-called “Cadillac” health plans, despite demands by 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% excise tax on plans worth more than $8,500 for single coverage and $23,000 for family coverage, with some exceptions.

But Reid did eliminate a proposed new excise tax on elective cosmetic surgery and replaced it with a new tax on indoor tanning services.

And he further boosted the Medicare payroll tax on individuals making more than $200,000 and couples making more than $250,000.

In a nod to calls from many healthcare experts and centrist lawmakers, Reid expanded sections of the legislation designed to restrain the rapid growth of medical spending by forcing hospitals and other medical providers to deliver care more efficiently.

Most of the changes would speed implementation of Medicare programs that reward hospitals that do more to coordinate the care their patients receive and deliver better clinical outcomes.

noam.levey@latimes.com

janet.hook@latimes.com

Kim Geiger in the Washington bureau contributed to this report.


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