US Senate panel approves Obama-backed health care plan
By Kate Randall
14 October 2009
The US Senate Finance Committee voted Tuesday to approve health care legislation that, if implemented, will slash health care benefits for millions of Americans. The Baucus plan, named for committee chairman Max Baucus, Democrat of Montana, passed in a 14-9 vote.
Republican Senator Olympia Snowe of Maine joined with all 13 Democratic committee members to support the bill, with the 9 remaining Republicans voting to oppose it.
President Obama praised the Finance Committee vote as a “critical milestone in our effort to reform our health care system.” The Baucus plan is the legislation largely favored by the administration.
The estimated cost of the measure is $829 billion over 10 years, but it is expected to reduce the deficit by $81 billion due mainly to cuts in government health care programs. The bill meets Obama’s criterion that any health plan must be “deficit neutral” and not add “one dime” to the federal budget deficit. This from an administration that has overseen the bailout of the banks—with no strings attached—at an potential liability of over $23 trillion.
The cost-cutting features of the Baucus plan were front and center Tuesday as the Finance Committee members made their positions known before the vote. Republicans and Democrats alike queried Douglas Elmendorf, director of the Congressional Budget Office, who was on hand to answer their questions about whether the plan would rein in spending.
Senator Snowe, who has been courted by the White House and finance committee Democrats to support the legislation and lend a show of bipartisanship to the proceedings, stated that there was no guarantee she would support its final form when reconciled with other versions of the legislation.
“My vote is for today. It doesn’t forecast what my vote will be tomorrow,” Snowe said, indicating that she would be wary of any unexpected costs introduced in a future Senate bill.
Senator Charles Grassley of Iowa, the ranking Republican on the committee, who voted with the balance of Republicans to oppose the plan, commented, “This bill is already moving on a slippery slope toward more government control of health care.”
In reality, Obama’s support for the Baucus plan demonstrates that his vision of restructuring health care has nothing in common with a government-run plan, or even a reform of the present system. Rather, the entire Congressional debate over health care has been dictated by the interests of the corporate and financial elite, including the giant health care insurers and pharmaceutical companies.
The result is legislation that will leave millions without health care coverage and slash billions from Medicare and other federal programs. Individuals and families will be mandated to buy insurance or face a penalty, while employers are under no obligation to provide coverage. The bill will also bring into force various mechanisms that will cut costs and ration care.
Of the five bills working their way through Congress, only the Baucus plan does not include a “public option” as part of its insurance “exchange” where coverage will be offered for sale. Instead, it calls for the expansion of so-called nonprofit health care cooperatives, which will provide little competition to private insurers.
In the other Congressional versions, the public option serves at best as a fig leaf of reform, and would exist as a dumping ground providing substandard care for those unable to purchase higher priced policies. In any event, Obama and various White House officials have repeatedly indicated that inclusion of a public option is not a requirement for the president’s signature on a final bill.
Over the weekend, the Baucus bill faced criticism from private insurers with the release of a report by America’s Health Insurance Plans (AHIP), an industry group, which engaged PricewaterhouseCoopers to analyze provisions of the plan. The report claims that under the legislation the cost of private health insurance would soar, increasing from 2009 to 2019 by 111 percent, compared to an increase of 79 percent during this period if no changes were enacted.
In particular, the AHIP report cited what they term “a weak coverage requirement” in the bill, which they say would result in healthy people choosing not to purchase insurance, causing insurers to hike premium costs for others. They also argue that cuts to Medicare would encourage health care providers to shift costs to the privately insured.
The report condemned a new tax on higher-priced “Cadillac” insurance plans, as well as prohibitions against insurers denying coverage for preexisting conditions. These costs, the study said, would also be shifted to the insured in the form of higher premiums.
The AHIP analysis determined that average annual costs for family coverage would rise to $25,900 by 2019 if the Baucus plan’s provisions were implemented, compared to $21,900 under current law.
While the Obama administration and Democrats on the Senate Finance Committee sought to dispute these figures, it should be noted that the Baucus bill contains no provisions to restrict what insurance companies can charge. The White House has worked closely throughout the Congressional discussion on health care to assure the insurance industry that any legislation that is drafted meets these conditions.
The frontal assault by the insurance industry on the eve of the Senate Finance Committee vote appeared to serve as a warning that the insurance industry will oppose any measures that might curb their freedom to reap profits. In the ensuing discussion in the Senate to reconcile the Baucus plan with the bill from the Senate health committee—and with final legislation from the House—they will resist the introduction of even a watered-down version of the public option, or any other measures they deem detrimental to their bottom line.
As it is presently constituted, however, the health care lobby should find little objectionable in the provisions of the Baucus plan. First of all, people will be mandated to purchase coverage from private insurers, or face penalties that will rise by 2017 to $750 for a family.
Obama opposed the “individual mandate” during his presidential campaign, arguing, “If we make it affordable, people will purchase it.” He now supports a mandate that will force individuals and families to buy what will inevitably be increasingly costly coverage, referring to it instead as “personal responsibility.”
Another Obama campaign promise has also been exposed as a sham—the fight for “universal health care.” One of the most damning features of the Baucus plan is that it would leave about 25 million people—or about 1 in every 12 US residents—with no health care coverage at all.
It is estimated that about a third of these uninsured—or more than 6 million people—would be undocumented immigrants and their children. In particularly cruel fashion, the Obama administration and Congressional Democrats have been at pains to insist that not a penny of federal money should go to insure these individuals.
The main federal spending in the plan is in the form of subsidies to low- and middle-income people to purchase private insurance, expected to amount to more than $460 billion over 10 years.
Medicaid, the health care program for the poor jointly funded by the federal government and the states, will also be expanded to cover an additional 14 million people at an estimated cost of $345 billion by raising the income threshold for eligibility. There are no provisions in the bill to pay for the estimated $33 billion in costs the states are expected to have to spend to cover costs for this expansion of benefits.
These outlays will in the main be financed by deep cuts to Medicare and other federal programs for the elderly, poor and disabled, which will be slashed by about $400 billion over the next decade.
Medicare payments to health care providers will be reduced by about $200 billion. An additional $113 billion will be axed from Medicare Advantage, the program by which more than 10 million seniors receive Medicare benefits through private health insurance plans.
The Baucus plan will also utilize “comparative effectiveness research” to implement further cuts to Medicare. An independent Medicare Commission, an unelected body appointed by the president, will have the power to reduce “excess cost growth,” with the goal of reducing spending by $22 billion over the next decade.
The Baucus plan would also establish an Innovation Center with the Centers for Medicare and Medicaid Services to test health care models, particularly aimed at moving primary care practices away from “fee-for-service”-based reimbursements. This center would seek to impose caps on health care costs by rationing care, thus denying payments for more expensive tests, procedures and drugs.
Over all, the Baucus plan would slash about 5 percent from the Medicare program over the next 10 years. These cuts will be translated into reductions in care for the elderly population, despite claims by White House officials that better care can be achieved by spending less.
The plan also seeks to raise more than $200 billion through taxes on so-called Cadillac plans. Such plans, defined as costing more than $8,000 annually for individuals or $21,000 for a family, would be taxed at a 40 percent rate for the coverage exceeding these cut-off levels. Obama opposed this measure during his presidential bid as an indirect tax on employee benefits, but now supports it.
Contrary to the “Cadillac” designation, the chief targets of this indirect tax would be comparatively higher paid workers—not the wealthy elite. Workers have gained these plans in bitter strikes and contract struggles, often sacrificing wage increases and other benefits to attain them. These plans generally have smaller co-pays and deductibles, as well as coverage for dental, optical and other vital health services.
While the taxes on these plans would be levied against the insurance companies, the costs would be passed on to the insured in the form of raised premiums and/or reductions in coverage. A preliminary estimate by the Congressional Joint Committee on Taxation has calculated that by 2019, 37 percent of family policies and 41 percent of individuals would fall into this category.
In other words, a plan that was touted as a means of extending coverage and making health care “more affordable” will leave 25 million US residents without coverage, and financially penalize a sizeable segment of the population with comparatively decent health coverage.
Despite these features of the Baucus plan, in his comments Tuesday Obama cynically claimed that the legislation “goes a long way towards offering security to those who have insurance and affordable options for those who don’t.”
There is no opposition from any section of the political establishment to the cost-cutting model exemplified by the Baucus plan, which has moved one step closer with Tuesday’s Finance Committee vote.
Deliberations in the Senate will now continue in closed-door discussions with Baucus and other senators, along with senior White House officials, including Budget Director Peter Orszag, Chief of Staff Rahm Emanuel and senior health adviser Nancy-Ann DeParle.
Whatever legislation ultimately emerges from these proceedings, and any reconciled bill between the House and Senate, the result will be a more openly and directly class-based health care system, in which the working class receives second-rate care, while the wealthy are ensured the best care that money can buy.
Republican’s Vote Lifts a Health Bill, but Hurdles Remain
Those involved in the Finance Committee’s debate included, clockwise from top left, Senator John D. Rockefeller IV; Senator Max Baucus, the chairman; Senators Olympia J. Snowe and Jon Kyl; Senator Jim Bunning; Douglas W. Elmendorf, the Congressional Budget Office director, and Thomas Barthold, the chief of staff to the Joint Committee on Taxation; and Senator Maria Cantwell.
WASHINGTON — After months of relentless courting and suspense, Senator Olympia J. Snowe, Republican of Maine, cast her vote with Democrats on Tuesday as the Senate Finance Committee approved legislation to remake the health care system and provide coverage to millions of the uninsured.
With Ms. Snowe’s support, the committee backed the $829 billion measure on a vote of 14 to 9, with all the other Republicans opposed.
“Is this bill all that I would want?” Ms. Snowe said. “Far from it. Is it all that it can be? No. But when history calls, history calls. And I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issues of our time.”
Ms. Snowe’s remarks silenced the packed committee room, riveted colleagues and thrilled the White House. President Obama had sought her vote, hoping that she would break with Republican leaders and provide at least a veneer of bipartisanship to the bill, which he has declared his top domestic priority.
Mr. Obama, speaking in the Rose Garden, described the committee’s action as “a critical milestone” and declared, “We are now closer than ever before to passing health reform.” But he added: “Now is not the time to pat ourselves on the back. Now is not the time to offer ourselves congratulations. Now is the time to dig in and work even harder to get this done.”
With its vote Tuesday, the Finance Committee became the fifth — and final — Congressional panel to approve a sweeping health care bill. The action will now move to the floors of the House and the Senate, where the health care measures still face significant hurdles.
Aside from Ms. Snowe, no Republicans in Congress have publicly endorsed the bills in their current form. And Republican leaders are strongly opposed, saying the bills cost too much, raise taxes, cut Medicare and dangerously expand federal power.
Pressure from lobbyists is sure to grow in the coming weeks. And many more lawmakers will get involved in what promise to be impassioned and highly politicized debates in the Senate and the House.
After the Finance Committee vote, the chief architect of the bill, Senator Max Baucus, Democrat of Montana and chairman of the committee, declared: “It’s clear that health care reform will pass this year. Our action today provides terrific momentum.”
Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, said the bill put the nation on “a slippery slope toward more and more government control of health care.”
Ms. Snowe helped write the Finance Committee bill, in months of bipartisan negotiations, but had not committed to vote for it. She said Tuesday that she shared many of her Republican colleagues’ reservations about the legislation, and pointedly warned Democrats that they could lose her support later in the legislative process.
“My vote today is my vote today,” she said. “It doesn’t forecast what my vote will be tomorrow.” And she observed, “There are many, many miles to go in this legislative journey.”
Ms. Snowe gave no clue how she would vote in the first few hours of committee deliberations Tuesday and she did not alert the White House to her plans.
While colleagues spoke, she kept her head buried in papers, fidgeted and spoke occasionally with aides. When Mr. Baucus stepped over to speak to her, a small army of photographers snapped pictures, with cameras clicking like a chorus of chirping crickets.
The Congressional Budget Office said the bill would cost $829 billion over 10 years. The costs include $345 billion for the expansion of Medicaid and $461 billion for subsidies to help lower-income people buy insurance.
The budget office said the costs would be completely offset by new fees and taxes and by cutbacks in Medicare, so federal budget deficits in the next 10 years would be $81 billion lower than now projected.
But Douglas W. Elmendorf, director of the Congressional Budget Office, said his agency had not estimated the impact of the bill on overall national health spending, public and private, and could not say whether it would “bend the cost curve,” as Mr. Obama and lawmakers want.
Likewise, Mr. Elmendorf said he did not know for sure how the bill would affect premiums.
Several senators said they would fight for changes on the Senate floor.
Liberal Democrats, like Senator John D. Rockefeller IV of West Virginia, said they would push for a public insurance plan. Senators Ron Wyden of Oregon and Robert Menendez of New Jersey, both Democrats, said they would seek changes to make insurance more affordable to middle-income families. And Senator John Kerry of Massachusetts said he wanted to require employers to provide insurance to their employees.
The bill does not include such an employer mandate. But employers with more than 50 workers would have to reimburse the government for some or all of the cost of federal subsidies provided to employees who buy insurance on their own.
Ms. Snowe said she liked the Finance Committee bill because it would prohibit insurance companies from discriminating against people on account of health status or sex and would create a network of insurance exchanges where individuals, families and small businesses could shop for coverage, with subsidies from the federal government.
At the same time, Ms. Snowe said she shared Republican “concerns about vast governmental bureaucracies and governmental intrusions.” That, she said, is why she had opposed amendments to create a government insurance plan and would continue to do so.
Ms. Snowe said she was open to a compromise under which a public plan could be “triggered” in states where people could not otherwise find affordable insurance. She said her “paramount concern” was that insurance might be too expensive for some people, even with government subsidies.
The Congressional Budget Office said the Finance Committee bill would provide coverage to 29 million people, but still leave 25 million uninsured in 2019. Of those left uncovered, about a third would be illegal immigrants.
Obama's health plans get shot in arm from first Republican backer
Conversion of Senator Olympia Snowe boosts bill on tricky path through Congress
Wednesday, 14 October 2009
AP
Olympia Snowe at the Senate Finance Committee hearing yesterday
President Barack Obama at last cut a small chink in the armour of the political opposition on Capitol Hill yesterday when a key Republican voted with her Democrat colleagues to help bring his healthcare reform plan one crucial step closer to reality.
Declaring that "history calls", Senator Olympia Snowe became the first Republican to side with the Democrats on the issue as the Senate Finance Committee approved a draft healthcare reform bill after months of cantankerous argument. All other Republicans on the panel voted against it.
Mr Obama said the committee vote marked a "critical milestone" for healthcare reform. He also singled out Ms Snowe for her "political courage and seriousness of purpose", but warned: "We are not there yet ... we are now closer than ever before ... [but] now is the time to dig in and work even harder."
The committee is the last of five congressional panels tasked with debating reform measures to complete its work. Democrats will claim that momentum is on their side again, even though a long road lies ahead before both houses of Congress can agree on a final bill for Mr Obama to sign.
Ending the suspense about her intentions shortly before the vote was taken, Ms Snowe told committee colleagues: "Is this bill all that I want? Far from it. Is it all that it can be? Far from it. But when history calls, history calls." Healthcare reform, she said, was the "monumental issue of our times".
Senator Snowe warned that as the process staggered forward, Democrats should not take her vote for granted. "My vote is for today," she cautioned. "It doesn't forecast what my vote will be tomorrow."
Nonetheless, winning her backing will be played up as a breakthrough by the White House and Democrats. If they can keep her on side, it could greatly improve the chances of the reform bill winning overall agreement this year. Hitherto, Republicans have remained solid in opposing all incarnations of healthcare reform wending their way through Congress.
Democrats had already taken heart earlier yesterday when Ms Snowe joined them in criticising a report issued by the health insurance lobby on the eve of the crunch committee vote, claiming that passage of its bill would add thousands to premiums for American families. She joined them in questioning the methodology of its analysis done by the accounting firm PricewaterhouseCoopers.
The release of the report looked at first like a potent grenade with the power to derail the committee at the crucial moment. But after expressions of anger from the White House – and an acknowledgement by the consulting company that its analysis had not taken account of the whole bill under consideration – it began to look as if the report was too little too late. "I don't view the impact of the report as a bill-stopper as much as a bill-changer," said Robert Blendon, a political analyst at Harvard University. "The momentum is way too far [in favour of passing a reform bill], and there is a sense out there that something has to be done."
The adoption by the finance committee of the bill's draft ensures that debate on reform will at last move out of all five concerned committees – two in the Senate and three in the House – and on to the floors of the chambers. Mr Obama's attempt at forging healthcare reform is already further along that than the efforts of the former president Bill Clinton 15 years ago.
Senate aides said the majority leader Harry Reid would begin melding the bills passed by the finance and health committees immediately and bring a combined version to the Senate floor in two weeks.
Led by Chairman Max Baucus, a centrist Democrat from Montana, the finance committee has produced a bill that does not include the so-called "public option" that would create a government entity to compete with private insurers. While this has been tarred as a betrayal by some on the left of the party, it also singles out the Baucus version as the one most likely to win support on the Senate floor. There are several conservative Democrats who are also wary of health reform.
The chances of the finance committee's bill being passed were boosted earlier this month when non-partisan congressional analysts reported that it would cost $829bn (£521bn) over 10 years, less than the $900bn maximum threshold set by President Obama. If enacted, they said, it would ensure that 94 per cent of all Americans had healthcare coverage.
But the Baucus package shares many key provisions with the other more expansive versions. It would require almost all Americans to purchase health insurance or face penalties and would prevent insurance companies dropping customers because of health problems that they may develop. Other Republicans on the committee, aside from Ms Snowe, rehearsed their aversions to it, including their fear that it too greatly inserts government into the medical decisions of individuals. Chuck Grassley, the Senator from Iowa, gave voice to his party's reservations, saying the bill was "moving on a slippery slope to more government control of healthcare".
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