(For coverage of healthcare reform, click on [nN20512341])
* Olympia Snowe is first Republican to back overhaul
* Committee endorses bill in victory for Obama
* Senate Finance version to be merged with second bill
(Adds reaction, details)
By John Whitesides and Donna Smith
WASHINGTON, Oct 13 A key U.S. Senate committee
endorsed a sweeping healthcare overhaul on Tuesday, gaining the
support of an influential Republican and delivering President
Barack Obama a victory on his top domestic priority.
The Democratic-controlled Senate Finance Committee approved
the measure on a 14-9 vote, with Senator Olympia Snowe becoming
the first Republican in Congress to back a healthcare reform
"Today we reached a critical milestone in our effort to
reform our healthcare system," Obama said after the vote,
warning there were still big challenges ahead for healthcare
The bill, the last of five pending health measures to clear
a committee in Congress, will be merged with the Senate health
panel's version in the next few weeks for a full Senate debate
and floor votes.
Snowe, who had been courted by Obama and his fellow
Democrats, said she still had reservations about the overhaul
and could not guarantee her continued support as it advances.
"My vote today is my vote today. It doesn't forecast what
my vote will be tomorrow," Snowe said.
Health insurer companies stocks fell on fears reform was
gaining steam and would hurt profits if it passed. The S&P
Managed Health Care index .GSPHMO of large health insurers
was down 1.9 percent. [nN13134772]
Snowe's support for the bill "definitively shifts the
political balance in Democrats' favor," healthcare equities
analyst Avik Roy said.
The vote gave another shot of momentum to the healthcare
drive and was good news for Obama, who has been criticized for
taking too much on board from wars in Iraq and Afghanistan to
climate change and gay rights.
The proposal drafted by Democratic Chairman Max Baucus was
designed to reduce costs, regulate insurers and expand
coverage. [nN13186448] [nN13208050]
"Pretty much everything has been said and now it's time to
get the job done," Baucus said. "Americans are looking for
Republicans condemned the plan as a costly and heavy-handed
government intrusion into the private healthcare sector and
said the measure would get even worse as it moves forward.
"We can now see clearly that the bill continues its march
leftward," said Senator Charles Grassley, the senior Republican
on the panel. "This bill is already moving on a slippery slope
to more government control of healthcare."
Snowe's support could give Democrats a crucial swing vote
as they try to hold the 60 Senate votes needed to overcome
procedural roadblocks. Democrats control exactly 60 seats in
the 100-member Senate.
Two weeks of panel debate left the key elements of the
committee plan intact. Support was strengthened by last week's
estimate from nonpartisan analysts that it would cost $829
billion -- well below Obama's target of $900 billion -- and
meet the president's goal of reducing the budget deficit.
But the final bill drew criticism on a variety of fronts,
with advocates saying it should cover more of the uninsured and
labor unions opposing its tax on expansive insurance plans,
which would hit some unions.
"Senate leaders must make major improvements in the bill
before it moves to the floor of the U.S. Senate," said Gerald
McEntee, president of the American Federation of State, County
and Municipal Employees, one of about 30 unions that will
sponsor ads opposing the measure.
Snowe and Democratic Senator Blanche Lincoln, a moderate
from Arkansas, urged Baucus to make sure the Finance Committee
bill was not drastically altered in the merger with the Senate
Baucus said after the vote he was not concerned with how
long the merger of the two Senate bills might take but was more
interested in producing a balanced final product.
"Let's make sure we get the merger right. Let's not botch
it," he told reporters.
The Senate Finance Committee bill requires all U.S.
citizens and legal residents to have health insurance and
provides subsidies on a sliding scale to help them buy it.
It would create state-based exchanges where individuals and
small businesses would shop for insurance and would bar
insurers from refusing to cover people with pre-existing
conditions or dropping those with serious illnesses.
The bill does not include a government-run "public"
insurance option backed by Obama and liberal Democrats as a way
to create competition for insurers. Republican critics say that
approach would undermine the private insurance industry.
All three bills in the House of Representatives and the
other Senate bill, passed by the Health Committee, include a
public insurance option. Supporters have vowed a Senate floor
fight over the issue.
Any bill produced by the Senate ultimately will have to be
merged with the House's final bill. Democratic leaders in the
House are working to merge their three measures into a single
bill for House action.
Democratic senators condemned an attack on Monday on the
Senate Finance bill by the insurance industry, which paid for a
report charging the bill would drive up costs and insurance
"The insurance industry ought to be ashamed of this
report," said Democratic Senator John Kerry. "The results were
simply not valid."
(Editing by Cynthia Osterman)