Budget report gives healthcare bill a boost

Reporting from Washington — 

Buoyed by estimates that their healthcare overhaul would cut the deficit by $138 billion over the next decade, congressional Democrats unveiled their final blueprint Thursday to extend insurance coverage to an additional 32 million Americans, setting the stage for a dramatic House vote Sunday.

House approval of the package, which will include the healthcare bill passed by the Senate last year along with a series of changes sought by House Democrats, would allow the president to sign the Senate bill soon after the House vote.

“This is history, and this is progress,” House Speaker Nancy Pelosi (D-San Francisco) said, referring to the cost and savings estimates for the bill that were released Thursday by the nonpartisan Congressional Budget Office. For weeks, the CBO has been evaluating the evolving versions of the overhaul legislation.

“We told [our members] we would stick with this bill until we had the savings that were necessary. And it took some time. But we are very pleased,” Pelosi said.

The Senate could complete action on the total package by the end of next week by using the so-called budget reconciliation process to approve changes sought by House Democrats, bringing to a close one of the most intense legislative battles in decades.

Underscoring the urgency, the White House announced Thursday that President Obama would postpone until June a planned trip to Asia that was to have started Sunday.

Budget analysts estimated that the coverage expansion will cost $940 billion over the next decade.

But because the spending is offset with a series of new taxes and cuts in federal Medicare expenses over the next decade, the CBO concluded that the legislation will actually reduce the deficit. The budget analysts estimated that deficit reduction could be even higher over the next two decades, hitting as much as $1.3 trillion by 2029.

Obama highlighted those numbers while speaking at the White House on Thursday, saying the healthcare bill represented “the most significant effort to reduce deficits” since the 1990s.

Republican lawmakers -- who say the legislation is too expensive and the Democratic push to pass it is too rushed -- repeated their pledge Thursday to work to block votes in both the House and Senate.

“It’s pretty clear that Democrat leaders here in Congress and the president aren’t listening to the American people,” said House Minority Leader John A. Boehner (R-Ohio).

Boehner and other GOP leaders have focused their criticism in recent days on Democratic plans to use a parliamentary maneuver in the House that would allow House Democrats to pass the Senate bill with a procedural vote on the reconciliation package, avoiding a roll call.

A coalition of business groups, led by the U.S. Chamber of Commerce, on Thursday announced a new ad campaign urging Democrats to stop the healthcare push. Many business leaders have criticized the legislation for doing too little to contain costs while placing new mandates on employers.

In the Senate, Republicans plan to try to force changes to the reconciliation package. If they succeed, the House would have to take yet another healthcare vote, possibly after Easter.

Democratic officials believe that can be avoided. And with legislation that is estimated to boost coverage without adding to the deficit, Democrats are growing increasingly confident that they will be able to secure their final votes by Sunday.

Privately, the president kept up his effort to persuade wavering House Democrats to rally behind the healthcare package, meeting and talking with several rank-and-file lawmakers at the White House.

Party leaders are closing in on the 216 votes they will need Sunday and appeared to pick up more support from conservative Democrats on Thursday, thanks to the CBO cost estimates.

Reps. Betsy Markey (D-Colo.) and Bart Gordon (D-Tenn.) announced they would back the bill. Both voted against the more costly House healthcare legislation last year.

Rep. Baron P. Hill (D-Ind.), who has expressed skepticism about the healthcare legislation, said Thursday that he was moving closer to supporting the bill. “I’m pretty happy about the numbers,” Hill said.

And fellow Democratic Indiana Rep. Brad Ellsworth, who has been concerned that the Senate bill places too few restrictions on federal funding for abortion, said, “It’s not a perfect bill, but there are great things in the bill.”

A host of leading medical groups, consumer advocates and labor unions rallied behind the legislative package.

“It is no exaggeration to say that this is the last opportunity in our generation to bring about durable reform,” Federation of American Hospitals President Charles N. Kahn III wrote to lawmakers. Seventeen years ago, Kahn, a former GOP staffer, helped lead opposition to the health overhaul sought by then-President Clinton.

Rep. Luis V. Gutierrez (D-Ill.), a leading immigration rights advocate, also announced Thursday that he would vote for the healthcare bill, in spite of his opposition to provisions that would bar illegal immigrants from buying coverage through the new insurance exchanges.

Democratic leaders concluded that budget rules prevented them from changing the immigration and abortion provisions of the Senate bill. They also did not include a proposal by the president to expand federal authority to regulate insurance premiums.

Nevertheless, the package of changes to the Senate bill had already swung most liberal Democrats behind the legislation.

The legislation would cover an additional 32 million Americans by 2019, according the preliminary CBO estimate. That would mean 95% of non-elderly Americans would have health coverage in 2019, compared with 83% today. Virtually all elderly Americans are covered by Medicare.

The accompanying 153-page reconciliation bill preserves the basic structure of the Senate health bill by placing new restrictions on insurers’ ability to deny coverage and creating a series of regulated insurance marketplaces where people who do not get coverage at work will be able to shop for plans.

But it would boost federal subsidies to help low- and moderate-income Americans buy a plan in the new insurance exchanges and reduce the penalties on people who do not buy insurance. The healthcare legislation will, for the first time, mandate that most Americans buy coverage.

The House package also would phase out by 2020 the gap in Medicare drug coverage known as the “doughnut hole,” ultimately providing seniors with a 75% discount on all pharmaceuticals.

It would increase pay for primary doctors who treat Medicaid patients and boost aid to states to help them expand their Medicaid programs serving the poor, eliminating the special deal that was carved for Nebraska in the original Senate bill.

Other provisions to help victims of exposure to asbestos and coal dust -- which were added at the request of senior senators from Montana and West Virginia -- will remain in the legislation, despite intense criticism of such special deals.

The package also would scale back a new tax on high-end “Cadillac” health plans, delaying implementation until 2018 and raising the tax threshold to $10,200 for individual plans and $27,500 for family plans.

But Democrats at the last minute eliminated language that would ensure the threshold increases faster than inflation, a provision that could mean more households are affected by the tax in future years.

To make up for lost revenue, the package would impose a new Medicare tax on investment income for individuals earning more than $200,000 and couples earning more than $250,000.

One of the largest sources of funding for the legislation is a proposed cut in what Medicare pays private insurers that contract with the government to provide benefits to seniors in the Medicare Advantage program. The Medicare program would also trim what it pays hospitals in a move to make to them more efficient.

The bill would also boost fees on drug companies to help close the doughnut hole.

Another late addition to the bill is a section to overhaul the federal student aid system by eliminating subsidies to banks that administer loans and instead having the government process the loans. That is projected to save $61 billion over the next decade.

noam.levey@latimes.com

janet.hook@latimes.com