Healthcare plan meets resistance

Congressional Democrats’ bid to overhaul the nation’s healthcare system got off to a rocky start Tuesday when Sen. Edward M. Kennedy (D-Mass.) introduced his long-awaited plan -- only to face furious criticism from even moderate Republicans.

Kennedy, whose fight to reshape the healthcare system spans more than 40 years, would require all Americans to get medical insurance, establish complex new insurance exchanges to facilitate near-universal coverage, and dramatically step up government oversight of the insurance industry.

Among other things, private insurers would be required to cover people with preexisting conditions, co-payments for preventive care would be limited, and doctors and hospitals that provided high-quality care would be rewarded.

Those goals are broadly shared by lawmakers from both parties.

But reaction to the 615-page bill -- written with little GOP involvement -- was an ominous preview of the potential for a return to the kind of partisan conflict that sank previous efforts to reshape the troubled medical system.

“There is a lot of concern in the Republican caucus, concern that I share, that the administration is trying to rush the bill through,” said Maine Sen. Susan Collins, a moderate Republican who helped broker a key compromise on President Obama’s massive stimulus bill earlier this year.

“That is a mistake,” she said. “There is a lot of goodwill. There is a lot of interest in working cooperatively with the administration, but if the bill is jammed through the Senate, that goodwill will dissipate very quickly.”

The Kennedy bill was the first -- and probably one of the most liberal -- of three versions of reform that Democrats plan to introduce in coming weeks, setting the stage for a historic debate this summer.

In an effort to avoid antagonizing moderates, Kennedy left out two exceptionally contentious features that had been contained in a draft of his plan circulated late last week.

One would have created a new government insurance program that would be offered as an option competing with private insurance plans. The other would place new coverage requirements on businesses.

Even with those two provisions omitted, however, the response of Republicans was sharply negative.

Wyoming Sen. Michael B. Enzi, the senior Republican on the Senate Health, Education, Labor and Pensions committee, which is chaired by Kennedy, charged Democrats with simply shutting out the minority in a drive to pump up government control of the healthcare industry.

“I have never been treated this way before,” said Enzi, who has worked closely with Kennedy on other legislation.

Enzi and 15 other GOP senators sent a letter to senior Democrats on Tuesday asking for more time to consider legislation and evaluate its costs.

Sen. Christopher J. Dodd (D-Conn.), who is leading work on the bill as Kennedy battles a malignant brain tumor, said Tuesday that Democrats were not excluding Republicans, who will meet with Democrats to discuss the bill today.

“I want my Republican colleagues to know, I want their ideas, I want to hear what they have to say,” Dodd said, calling the bill “an opening step.”

Other Republicans and many interest groups, who are equally upset with the Kennedy bill, now are eyeing the Senate Finance Committee, where there has been more bipartisan cooperation on a second healthcare bill being developed there.

But there are few indications that the bill-writing will get any easier.

House Democrats -- as well as President Obama and Senate leaders such as Kennedy and Dodd -- have expressed determination to include a new government insurance program in a final package.

Advocates of an optional government plan say it would provide competition and push private insurers to offer better, more cost-effective coverage. Critics worry it could lead to a single-payer system in which people have no choice but to get insurance from the government.

Business groups are also lining up to fight any new requirement that they provide health insurance to their workers or contribute money to help the government provide the coverage.

And still unanswered are questions about how to pay for a massive overhaul that could cost more than $1.2 trillion over the next decade.

At the White House on Tuesday, the president expressed support for tougher “pay-as-you-go” budgeting rules that would require new federal spending to be offset by cuts elsewhere or new revenues, although Obama has left open the possibility that his healthcare agenda would not pay for itself in the short term.

Kennedy’s bill does not identify funding sources, although it outlines several gargantuan expansions of government aid to help people get insurance, including opening Medicaid to all Americans making up to 150% of the federal poverty line. The program is now generally limited to poor and low-income families.

Kennedy’s bill also would provide federal subsidies to people making as much as 500% of the poverty line to help them buy insurance on their own.

“We’ve got to pay for it,” Senate Finance Committee Chairman Max Baucus (D-Mont.) said Tuesday. “The rubber really meets the road in the finance committee.”

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noam.levey@latimes.com

Janet Hook in the Washington bureau contributed to this report.

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(BEGIN TEXT OF INFOBOX)

The four big questions on healthcare legislation

1. How will Congress provide coverage for the more than 46 million uninsured people?

Most Democrats, including President Obama, are calling for a new government insurance program that would compete with private insurers. Republicans and the insurance industry object, contending it would have an unfair advantage. Some see room for compromise in regulated exchanges, where government exerts strong control over insurers’ charges and conduct.

2. How can Americans’ care be improved?

Many experts think the government should reward the best doctors and hospitals. But critics think that would let the government dictate the care doctors deliver.

3. How can costs be controlled?

Industry groups say they are identifying efficiencies, such as simpler billing forms. And experts think higher-quality care may save money. But actually lowering costs may not happen soon, many experts acknowledge. Lawmakers remain unwilling to limit healthcare.

4. Who will foot the bill?

Overhauling the healthcare system and covering everyone could cost $1.5 trillion or more over the next decade. Obama has proposed to raise nearly $634 billion by limiting tax deductions for wealthy taxpayers, as well as cuts to insurers that contract with the government to provide Medicare coverage. He is calling for an additional $300 billion in cuts to Medicare and Medicaid. Lawmakers are also considering taxes on sodas and on health benefits provided by employers.

KEY PLAYERS

Sen. Edward M. Kennedy (D-Mass.) -- The liberal lion, who has been leading the healthcare push while battling cancer, is one of a handful of lawmakers who could bring liberal Democrats and Republicans together on a grand compromise.

Sen. Charles E. Grassley (R-Iowa) -- The senior Republican on the Senate Finance Committee, he has been working closely with Chairman Max Baucus (D-Mont.) on healthcare.

Congressional Budget Office -- The agency will calculate the price tags.

Health insurance companies -- Blamed for killing the Clinton administration’s healthcare campaign with the “Harry & Louise” ads, the industry is casting itself as an ally of reform, but many wonder how long that will last.

Small businesses -- They also helped kill the Clinton effort. This year some of them are at the table.

Congressional Progressive Caucus -- This liberal group insists on a big role for government.