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Senate Shifts Focus to Health Care Compromise

October 14, 2009 at 12:00 AM EST
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Top Senate Democrats and White House officials have turned their health reform efforts toward crafting a compromise package that can unite Democrats and avoid a GOP filibuster. Policy analysts examine the different ways a public option could take shape in Congress.
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BETTY ANN BOWSER: Senate leaders began the grueling task today of merging health care reform bills from two committees. The final product will blend of the Finance Committee version, which passed yesterday with just one Republican vote, with a version passed earlier this year by the Senate Health Committee.

And whatever the Senate compromise is, it still must be reconciled with a more liberal version of a health care overhaul being worked on in the House. The White House dispatched Chief of Staff Rahm Emanuel, Office of Management and Budget Director Peter Orszag, and other top advisers to weigh in on the meetings.

On the Senate side, the pressure falls primarily on the shoulders of Majority Leader Harry Reid.

SEN. HARRY REID, D-Nev., senate majority leader: I know Republicans will insist that we get 60 senators to agree on a way forward. I know this isn’t going to be easy. But I appeal to Republicans in the Senate: Come join us. We want health care reform. We want to do it with you.

We’re going to do it with them or without them.

BETTY ANN BOWSER: Senator Reid and his colleagues have their work cut out for them. The two Senate bills have some major sticking points that divide moderate and liberal moderate Democrats within their own party.

Among the differences: The Finance Committee’s bill does not include a government-run public plan that would compete with private insurers, while the Health Committee bill does. And the Finance Committee omitted a mandate that employers contribute to insure their workers, or pay a penalty, but the Senate Health Committee and all legislation being considered in the House require it.

The Finance Committee bill also raises revenue to pay for its overhaul by taxing high-cost insurance plans, while House leaders are calling for a surtax on millionaires. Republican leaders blasted the Finance Committee bill as well today, arguing, it will be too costly.

SEN. MITCH MCCONNELL, R-Ky, senate minority leader: No matter what kind of adjustments are made to some of it, we know what core of bill will be. It will be higher premiums, higher taxes, and cuts in Medicare. That’s not health care reform.

MAN: The Senate Finance bill is a dream come true for the health insurance industry.

BETTY ANN BOWSER: The fight over the public option returned to the fore today. Liberal groups launched ad campaigns demanding it.

MAN: The choice of a public health insurance option is the only insurance option is the only way to keep insurance companies honest.

BETTY ANN BOWSER: Labor unions gave their ultimatum in full-page ads that included a list of demands for their support of health care reform, top on the list: A public plan, or we will oppose it.

The one Republican to vote for the Finance Committee measure yesterday was Maine Senator Olympia Snowe. While she doesn’t support a public plan be included in the bill, she’s suggested a compromise, which she calls a trigger.

Snowe calls for a compromise

SEN. OLYMPIA SNOWE, R-Maine: I have recommended having a safety net, a fallback of a public option, to kick in immediately, if affordable choices aren't available to people in any -- in any given area of the country. That may be a resolution to this problem.

BETTY ANN BOWSER: And Senator Thomas Carper of Delaware has a different idea. He's proposed allowing states to create their own public options, if competition is lacking.

On the "NewsHour" last night, White House Chief of Staff Rahm Emanuel said, while there were different ideas, everyone was working for the same goal.

RAHM EMANUEL: It is not allowing an insurance company to be the overpowering factor when, in fact, if you had that competition, both the consumer, i.e., the patient, and the doctor have the choice, and it's not left in the hands of the insurance companies.

BETTY ANN BOWSER: Senator Reid said he expects floor debate to begin within two weeks. The House has not announced when it will move forward, after merging its three health care reform bills.

JIM LEHRER: Now Judy Woodruff takes a closer look at the different options for a public option.

JUDY WOODRUFF: And, for that, we talk to two people who have been following the debate closely.

Julie Rovner is a health policy correspondent for National Public Radio. And Len Nichols is a health economist and director of the Health Policy Program at the New America Foundation. He has written extensively about his ideas for a public plan and others.

Thank you, both. It's good to have you both back with us.

There are so many terms being thrown around here, Len, I want to start with the basics. Remind us, in brief, what is it -- what is it -- what does it mean for the government to be in the business of selling health insurance, the so-called public plan?

LEN NICHOLS: Well, the first thing it would mean is that the government would be picking the managers of the plan.

And it would -- they would, therefore, be government employees, and they would be responsible for organizing the plan and bearing the risk of the plan. They would set the premiums.

The bills all, all five committee bills, all say the government plan would have to play by the same rules, the same benefits, and all that stuff would be the same. But people worry about the government being given certain special advantages. And that's really the debate.

JUDY WOODRUFF: And it is not in the Senate Finance bill, just...

LEN NICHOLS: It is not in the Senate Finance bill; that is correct.

JUDY WOODRUFF: Julie Rovner, remind us who is on each side of this argument over the public option, government selling insurance.

JULIE ROVNER: Well, Republicans, really, to a person -- we saw Senator Snowe, of course, in the piece say that she might be, in some case, for a public plan -- but, pretty much, Republicans are all against it.

Senator Chuck Grassley, the ranking Republican on the Finance Committee, called it predatory. They say it would lead be camel's nose under the tent leading to single-payer, meaning the government would take over, basically, the insurance industry.

Within the Democratic Party, though, you have liberals who say they will not vote for a plan that does not have a public option. You have more moderates saying they will not vote for a plan that does have a public option. That has been the division basically all year. That was the -- the idea at the Finance Committee, where they came up with this -- this co-op proposal that was supposed to be a middle ground, and that's where you get all these permutations looking for some kind of middle ground, to find this -- you know, this compromise between these liberals who say there must be a public plan and these conservatives who say, no, we don't want a public plan and we can't have it.

Leveling the playing field

JUDY WOODRUFF: So, Len Nichols, if you look at this as a battleground, and, on the one hand, you've got people saying absolutely no public plan, and, on the other side, people saying, yes, we must have a public plan, what are some of the variations, the compromises that are now out there?

LEN NICHOLS: Well, the first variation, which is already in some of the proposals, is to make sure that there's a level playing field. And that's really what I have been advocating for some time.

And that is, make sure the public option pays the same rates to providers, let's say, as the other competitors. And that's really what the, if you remember, the so-called Blue Dog in the House recommended and got out of the Energy and Commerce Committee.

JUDY WOODRUFF: Moderate Democrats.

LEN NICHOLS: Moderate Democrats.

And, on the Senate side, those -- a number of people there have been in the same place. Senator Carper's idea is, what if we allow states to decide whether there should be one and give states a range of options, including the co-op that is now in the Finance Committee, as well as maybe a state-run plan, in addition to a federal-run plan?

JUDY WOODRUFF: And help us understand how that would work at the state level, as opposed to federal?

LEN NICHOLS: Well, for example, you might say we will let the states decide if they want a public option to be added to the private options in their marketplace, and they could choose among a range of alternatives, including letting people buy into the existing state employee plan, having a new national, a new federal plan, as well as creating a new state plan, or even a state co-op, like Senator Conrad had in the Finance Committee.

JUDY WOODRUFF: Well, let me stop you there.

Julie Rovner, what is -- what are the arguments at this stage for and against that? If you're someone who says, I want the public option, government selling insurance, no matter what, is this state option something that you might be able to live with?

JULIE ROVNER: Well, it depends.

One of the big arguments against it is that it wouldn't be basically fair to people who lived in states where, perhaps, it would be up to the governor or the state legislature if they said, we don't want it.

So, if you want to have a public option -- and I think it's important to go back here. We're not talking about this public option being available to everyone. We're, at this point, really only talking about it being available to people eligible for these new insurance exchanges. We're talking about only the people who are self-employed or in relatively small businesses.

Most people will still be stuck, if you will, with their employer-provided insurance. The 160 million or so people who have insurance through their jobs now will keep that, as the president keeps saying. These exchanges will only be open to a small number of people in those exchanges. There might or might not be this public option. That's why they call it an option, that you could choose.

So, we're not talking about everybody. We're not talking about this public plan taking over the health insurance system.

JUDY WOODRUFF: But that is the argument of conservatives, Republicans, most Republicans, who say this is a foot in the door. This is a way to get to a government takeover.

LEN NICHOLS: Well, that's right.

But that's also why Senator Snowe's proposal for a trigger is a very interesting idea, because, if you think about it, if you say you would only have it in a place where the objective conditions on the ground did not produce affordable options, in a way, that tells the people who really want one it will be there when you need it. And it tells the people who worry about a government takeover, we won't go anywhere unless there's no competition, unless there's not affordable options.

Unraveling the trigger option

JUDY WOODRUFF: All right, so, what about that trigger option, I guess you would call it, Julie Rovner?

Are the people who are fierce advocates for the public plan, for government health insurance option, are they likely to go for something that's just a trigger?

JULIE ROVNER: Probably not. There's a lot of people who have said that they don't want a trigger. They really want something right away. There's concern. And they point to the Congressional Budget Office, who says that, if you have a public plan, it will save money.

And, if you think about it, that would make sense. The idea of a public plan, it would be like Medicare. It would pay probably lower rates. It would -- it would require, even if it had to negotiate with doctors and hospitals, there would be smaller administrative costs. This is probably why -- this is why Republicans don't like it.

It would pay lower rates. It would -- it would -- the idea is, it would force private insurers to also pay lower rates in order to compete. But, therefore, it would cost less. Therefore, it would save money. So, they say, in order to save money, one of the main goals of this entire health overhaul exercise that you would then save money.

So, why shouldn't you have it right away? Why should you wait for a trigger? Why wouldn't it be part of the immediate effort? So, they don't want to wait for a trigger. They want to have a public option right from the get-go.

JUDY WOODRUFF: So...

LEN NICHOLS: But it is interesting, if I could, while Howard Dean has been a leader of the movement advocating a very strong public option in every state and be a federally-run thing, just last week, he opened the door to having a discussion of states choosing.

Now, he preferred a version where the states would opt out, so the default option would be the plan would be everywhere and the state would have to actively say no. But at least he opened the door to some kind of state choice, which opens up the question of what is the trigger that you would use to...

JUDY WOODRUFF: So, you now have these -- these middle-ground options that are out there.

LEN NICHOLS: Searching for a majority.

JUDY WOODRUFF: What -- where is the momentum going to come from for one of these to be part of any final solution? I mean, where -- where is that -- where is that argument? How do -- how do you -- how do you put that -- pull that argument together?

LEN NICHOLS: Well, I think Julie's right. There a number of people in the House in particular who are going to say there has got to be a public option, or I won't vote for the bill, at least the first time. They're going to push very hard for that.

At the same time, you have heard Senator Baucus say a number of times he does not think there are 60 votes for a public option. So, you're going to have these two different camps. I think it's likely some version of the Carper-Snowe thing will be what is attached to the Senate provision, at least on the floor. It will be voted on.

And the House will be more like what came out of Energy and Commerce. I do think it won't be Medicare rates, but it might be something negotiated.

JUDY WOODRUFF: And, Julie Rovner, you're going to have to promise us that we're going to understand all this by the time it's done.

JULIE ROVNER: Well, there's going to have to be some kind of compromise. There's going to have to be something that is going to get 218 votes in the House and probably 60 votes in the Senate.

Those 60 votes are probably going to have to include Senator Snowe, who we know is pretty much on the fence. So, they're going to have to come up with something. And, unfortunately, compromises tend, by their nature, to be complicated.

JULIE ROVNER: So, we will do the best we can to explain it.

JUDY WOODRUFF: Well, thank you both for helping us understand it.

Julie Rovner, Len Nichols, we appreciate it.

LEN NICHOLS: Thank you.