Senator's plan joins heated healthcare debate

WASHINGTON Wed Sep 16, 2009 7:33pm EDT

1 of 2. Senator Max Baucus, chairman of the Senate Finance Committee, gestures as he discusses the healthcare reform bill during a news conference on Capitol Hill, September 16, 2009.

Credit: Reuters/Hyungwon Kang

Related Video

WASHINGTON (Reuters) - Senator Max Baucus unveiled a long-awaited healthcare overhaul on Wednesday that would dramatically revamp insurance rules but does not include a government-run option backed by liberal Democrats.

After months of negotiations, the Baucus bill -- which would cost an estimated $856 billion over 10 years -- attracted no Republican support and alienated some in his own Democratic Party.

But Baucus, chairman of the Senate Finance Committee, said the proposal would eventually win over Republicans and closely follows the framework laid out by President Barack Obama, a Democrat, on his top domestic priority.

"This is a good bill. This is a balanced bill. It can pass the Senate," Baucus told reporters. "At the end of the day, there is going to be Republican support for this bill."

Republicans were quick to criticize the measure, the last of several entries in the long congressional process of overhauling the $2.5 trillion healthcare industry, and even many Democrats found provisions they said needed work.

The legislation would require all U.S. citizens and legal residents to obtain health insurance, offer subsidies on a sliding scale to help people buy it, levy fees on healthcare companies and insurers, and expand Medicaid, the healthcare system for the poor.

Instead of the controversial government-run public option, the Baucus proposal calls for the creation of non-profit cooperatives to create competition in the insurance market.

The $856 billion price tag is slightly cheaper than four other bills pending in the Senate and House of Representatives, which all would cost at least $1 trillion, and Baucus said it would not increase the budget deficit.

The nonpartisan Congressional Budget Office said the cost of the Baucus bill could be even lower at $774 billion, would lead to a net reduction of $49 billion in the deficit over 10 years and cut the number of uninsured Americans by about 29 million people.

Some 46 million people in the United States -- nearly a sixth of the population -- now have no health insurance.

CRITICISM FROM BOTH SIDES

White House spokesman Robert Gibbs said the Baucus plan was "an important building block and gets us closer to comprehensive healthcare reform."

The Senate Finance Committee will vote on the plan next week and each chamber of Congress will take up initial versions of a healthcare bill in coming weeks.

Baucus led months of talks among the so-called "Gang of Six" negotiators -- three Democrats and three Republicans -- in hopes of winning Republican support.

The panel is the last of five congressional committees to take up a healthcare bill. With congressional elections due in 2010, Obama has urged Congress to complete work on the plan by the end of this year.

"There are going to be many changes from what he has released," Senate Democratic Leader Harry Reid told Reuters. "There are things in there that I don't like."

House Speaker Nancy Pelosi, also a Democrat, said she preferred the House versions which include the public option.

"The House bill clearly does more to make coverage affordable for more Americans and provides more competition to drive insurance companies to charge lower premiums and improve coverage," Pelosi said in a statement.

Opinion polls show Americans are split over Obama's plans for the healthcare industry, which he says are designed to rein in costs, improve care, regulate insurers to protect consumers and expand coverage to the uninsured.

Under the Baucus plan, insurance companies could no longer deny coverage to people with pre-existing conditions and would be barred from offering limited-benefit plans or placing lifetime limits on coverage.

It also would create state-based exchanges where individuals and small businesses could shop for insurance.

The bill does not require employers to offer health insurance, but companies with 50 or more full-time workers would pay a fee for employees who obtain policies subsidized by federal tax credits.

The proposal also requires that health insurance providers collectively pay an annual fee of $6 billion starting in 2010, with other health companies making smaller collective payments to help fund the reforms in the bill.

The Morgan Stanley Healthcare Payors index was up 1.6 percent and shares of home nursing companies rose, with Gentiva Health Services up 9 percent at $25.04 and Amedisys up nearly 8 percent at $41.95. Nursing home operator Skilled Healthcare Group was up more than 5 percent at $8.41.

The stocks benefited from less severe Medicare reimbursement cuts in the bill for the companies than had been expected, analysts said.

'NOT A FINISHED PRODUCT'

"We all know that while this is a very good start, it is not a finished product," Democratic Senator Kent Conrad, one of the six negotiators on the Baucus plan, said in a statement.

The bill has some proposals designed to ease Republican concerns, specifying that illegal immigrants would not be covered and federal funds would not be used for abortions.

It also encourages states to start pilot projects to bolster medical malpractice reform, a traditional Republican concern.

But none of the three Republican negotiators on the Senate panel -- Charles Grassley, Mike Enzi and Olympia Snowe -- or any other Republican has endorsed the proposals so far.

Republican Senate Leader Mitch McConnell said the Baucus plan "puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program."

Some Democrats have complained about the concessions made to Republicans, particularly reductions in the scope and elimination of the public option.

Critics of the option say it would hurt insurance companies and give government too big a role. Despite his support for a government-run insurance option, Obama has signaled it is not an essential element of any ultimate healthcare overhaul.

Senate Finance Committee member John Rockefeller, a Democrat and a strong backer of a public option, says he will not support the panel's healthcare bill without significant changes. He is the only Democrat to oppose the plan so far.

(Additional reporting by Thomas Ferraro; Editing by John O'Callaghan and Jackie Frank)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.