Health reformers prepare for Senate hurdle

By Edward Luce in Washington

Published: November 8 2009 20:19 | Last updated: November 8 2009 20:19

The first thing Barack Obama did late on Saturday night following the passage of the healthcare bill in the House of Representatives was to phone the heads of three industry lobby groups to thank them for their support. Not included on the list was the largest insurance lobby group, American Health Insurance Plans, which doggedly continues to oppose Democratic reform efforts.

Amid all the late night celebrations after the razor-thin 220-215 vote for the bill, Karen Ignagni, head of AHIP, warned that it would be a much tougher battle to push reform through the Senate in the weeks ahead. “The current House legislation fails to bend the healthcare cost curve and breaks the promise that those who like their current coverage can keep it,” she said. “The result will be increased costs and massive disruptions in the quality of coverage individuals and families rely on today.

The final vote, which included a lone Republican in favour and 39 Democrats against, was achieved after a last-minute amendment that ruled out public funding for healthcare plans that offer coverage for abortion. That concession – and Mr Obama’s personal appeal for Democratic unity in a visit to Capitol Hill on Saturday – enabled a sufficiently large bunch of wavering conservative Democrats to put their support behind the $1,200bn 10-year reform effort.

Of the 39 Democrats who voted against the bill – just two short of the critical mass needed to defeat it – 31 were from districts that John McCain won in last November’s presidential election. Among the others were Dennis Kucinich, the former Democratic candidate and one of the most liberal congressmen, who said it would ensure the “the perpetuation, indeed the strengthening, of the for-profit health insurance industry, the very source of the problem”.

That division, between liberals who want a much stronger public role in the new healthcare system, and centrist Democrats who bitterly oppose it, looks much tougher to bridge in the Senate, where a simple majority will not be enough to enact the bill. Under Senate rules, 60 votes (out of 100) are required to stave off an opposition filibuster.

On Sunday, Harry Reid, the Senate majority leader, who will now become the central figure in the drama of the weeks ahead, said “we stand closer than ever to reforming our broken healthcare system”.

The battle is by no means even close to its finale. Mr Reid’s first task will be to persuade sceptical colleagues that the bill should retain the controversial “public option” – a government insurance plan intended to keep the “insurers honest”. Even though Mr Reid has watered down that element by allowing states to opt out of it, many Democrats remain opposed. Olympia Snowe, the only Republican in the Senate who has so far supported the Democratic-led reforms, has also criticised the measure.

US healthcare reform

Secondly, Mr Reid will be under pressure to restore a strong “individual mandate” that compels all Americans to take out insurance or pay a hefty fine. Dilution of that element is what led AHIP to come out strongly against healthcare reform last month. The insurers, who can count on the support of Democratic centrists such as Ben Nelson of Nebraska, say the whittling down of the penalty will lead to “adverse selection”, by which only the sick and vulnerable will sign up for coverage, thus pushing up health premiums for everyone else.

If and when Mr Reid cobbles together a majority in the Senate, Democrats then face the thorny task of stitching the very different House and Senate versions into one bill and then voting on that final product all over again.

The differences are large. For example, the House version pays for reform by imposing a 5.4 per cent tax surcharge on the wealthy – those earning over $500,000 a year. In contrast, the most recent Senate bill raises money by imposing a tax on the more expensive “Cadillac” insurance plans.

Democratic staffers on Capitol Hill say the aim is to have a Senate vote by Thanksgiving in late November and to conclude the bicameral conference and have a vote on a merged bill by Christmas. On Saturday night, Mr Obama said he was “absolutely confident” the bill would clear the Senate in time for him to sign it into law by the end of this year.

“Thanks to the hard work of the House, we are just two steps away from achieving health insurance reform in America,” Mr Obama said.

But those are two giant – though not impossible – steps.

http://www.ft.com/cms/s/0/dbdbc3ce-cc9a-11de-8e30-00144feabdc0.html