Democratic faction uneasy about U.S. healthcare bill

By Kim Dixon

WASHINGTON (Reuters) - A crack in the fragile coalition crafting a U.S. healthcare reform bill emerged on Thursday when fiscally conservative Democrats balked at the cost and direction of the House of Representatives' plan.

Lawmakers in Congress, controlled by Democrats, are working on draft proposals to revamp the bureaucratic U.S. healthcare system at a cost of about $1 trillion over a decade. Healthcare reform is a key part of the Obama administration's agenda.

But in a letter to Democratic House Speaker Nancy Pelosi and Senate Republican Leader Mitch McConnell, about 50 House Democrats said the House should "pare back some of the cost-drivers to produce a bill that we can afford."

The so-called Democratic Blue Dog Coalition, an influential faction within the majority party, also said they had "strong reservations about the process and direction" of the proposed legislation.

"Paying for health care reform must start with finding savings within the current delivery system and maximizing the value of our health care dollar before we ask the public to pay more," they said.

President Barack Obama has demanded that Congress send him a bill by October that will cut costs while providing medical insurance to most of the 46 million Americans who currently have no coverage.

But the estimated cost of restructuring the $2.5 trillion healthcare system has raised alarms among Republicans and some Democrats, who have argued that the proposed reforms are unaffordable for a country mired in a deep recession.

PELOSI CONFIDENT

The Blue Dog Democrats complained that the proposed House bill failed to reform payments to doctors, hospitals and insurers and lacked provisions to shield small businesses from excessive costs.

They also expressed concern about the establishment of a government-run health insurance plan favored by some Democrats, saying it would hurt small hospitals and doctors.

With the House and Senate due to adjourn in August, the conservative Democrats also insisted there must be sufficient time to review any legislation and discuss it before a floor vote.

"Significant progress on the draft tri-committee health care reform proposal needs to be made in order to address each of these concerns. We cannot support a final product that fails to do so," the letter said.

Pelosi, however, reaffirmed her intention earlier on Thursday to meet the August deadline and win House passage of a healthcare plan that includes a government-run insurance option and doesn't tax employer provided health care benefits.

"We are in the process of bringing our health care proposal to the floor," Pelosi said in a weekly news conference. "It will happen."

"It will have, coming out of the House, a public option," Pelosi said. "The only debate on that is what it will be called -- a patient option, a public option, write in your suggestions."