Public Health-Plan Option Rejected by Senate Panel
By: Health Insurance
Submitted: 2009-10-12 15:30:31 | Word Count: 1194
Senate Finance Committee Chairman Max Baucus joined with two other Democrats to defeat proposals by members of their own party to create a government insurance program, handing a victory to the nation’s private insurers.
The panel rejected today amendments offered by West Virginia Senator Jay Rockefeller and New York Senator Charles Schumer to establish a “public option” that would compete with insurance companies. All the Republicans voted no on each amendment.
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It later unanimously adopted an amendment by Iowa Senator Charles Grassley and Kentucky Senator Jim Bunning, both Republicans, to require lawmakers, their aides and all other federal employees to buy their insurance from health insurance exchanges created by the legislation after 2013.
The public option proposal has proved the biggest flashpoint in the deliberations over how to revamp the U.S. medical system, with many Democrats arguing it’s essential to reining in costs and Republicans saying it will unfairly undercut the companies.
“My job is to put together a bill that will become law,” Baucus said before the vote on Rockefeller’s amendment. “I fear if this provision is in this bill as it comes out of this committee, it will jeopardize” the overhaul effort, he said.
New Standards
Baucus, whose panel is the last of five congressional committees to draft health-care legislation, said insurance companies already face a host of new standards in a proposal he released earlier this month.
Under his plan, insurers would have to issue policies to all who need them and face restrictions on the premium charges they can place on the youngest and oldest policy holders. They would also have new competition from nonprofit cooperatives.
“It does hold insurance companies’ feet to the fire,” Baucus said of his proposal.
Rockefeller said his amendment, which was defeated 15-8, would probably save $50 billion over 10 years and reduce costs for families, not focus on profits for insurers such as Philadelphia-based Cigna Corp.
“Why would we not do this?” he said before the vote. “People come second and the profits come first if we’re against this.”
The Rockefeller amendment would have initially pegged the rates that the public option paid health-care providers to the lower rates paid by Medicare, the government program for the elderly. Schumer’s proposal would have required the program to negotiate rates with providers, as private insurers do.
‘Keep at This’
“We’re going to keep at this and at this and at this until we succeed,” said Schumer, whose amendment went down 13- 10. He pledged to raise the issue again on the Senate floor.
Rejection by the Senate would set up a showdown with the House, where three committees have already backed the option.
During the debate, Republicans on the committee said they opposed any kind of public option. Grassley, the top Republican on the panel, called it “a slow walk toward government- controlled, single-payer health care.”
Democratic Senators Bill Nelson of Florida, Blanche Lincoln of Arkansas, Thomas Carper of Delaware and Kent Conrad of North Dakota joined Baucus in voting against Rockefeller’s plan. Lincoln and Conrad also voted with Baucus against the Schumer amendment.
Stock Movement
Insurance stocks pared losses after the votes. The Standard & Poor’s index of the six largest managed-care companies ended the day down 1.2 percent after losing as much as 3.5 percent earlier.
Humana Inc., based in Louisville, Kentucky, fell 1 cent to close at $38.02 in composite New York Stock Exchange trading after dropping as much as 2.1 percent to $37.25 earlier. Coventry Health Care Inc. of Bethesda, Maryland, rose 12 cents, or 0.6 percent, to $19.94 after earlier dropping 1.4 percent.
Baucus originally intended to finish his panel’s work on legislation in three days. As the finance committee began its fifth day of debate this morning, he said it had already considered 60 amendments and was holding the longest “mark- up” of a measure in 15 years.
The panel later will take up issues such as how to pay for the health-care legislation, which carries an estimated cost of $900 billion over 10 years. Baucus’s proposal, the basis for the panel’s work, includes a tax on high-end, or “Cadillac,” insurance plans, an idea also under consideration in the House.
‘Winnowing Process’
Maryland Representative Chris Van Hollen, emerging from a meeting of House Democratic leaders today, said a tax on Cadillac health plans is “not a preferred option.” The leaders “are going through the winnowing process” and the tax is “among the options that are on the table, but it would not take the form the Senate is taking” in Baucus’s proposal, Van Hollen said.
The tax on health plans may still be included “in conjunction” with other measures, he said.
The insurance industry opposes new taxes as well as the public option, saying it would disrupt coverage.
If the finance panel passes its legislation, Senate leaders must combine the measure with one passed by the Senate health committee and then schedule a chamber vote. It would have to be merged with a House version before more votes.
House leaders are trying to combine health-care measures approved by three committees in that chamber. Democrats are debating whether the public option program should be allowed to peg the reimbursements to Medicare levels.
Democratic leaders sought to quell expectations the House will move quickly to debate health-care legislation.
‘No Pressure’
“There is no pressure to do it this week, next week or the following week,” House Majority Leader Steny Hoyer told reporters after a meeting of Democratic leaders. Still, “we want to do it as expeditiously as possible,” he said.
Earlier in the day, Hoyer said leaders may have a measure ready for House debate next month.
“We feel no rush to come to the floor until we are ready,” House Speaker Nancy Pelosi said at a brief news conference outside her office.
House leaders have begun making decisions about what provisions will go into the combined legislation, Pelosi said. Pelosi said leaders had developed a path to reducing the plan’s price tag to meet President Barack Obama’s demand that it cost no more than $900 billion over 10 years. She declined to give details on how leaders plan to cut the cost of the plan.
Baucus’s panel has drawn the most attention because it’s the only one with a proposal that may still get Republican support; it also won praise from the White House. Last week, Baucus thwarted challenges to his plan from both parties.
“They defeated all of the crippling amendments,” said former Senate Democratic leader Tom Daschle, a Bloomberg Television contributor, in an interview this morning. “They showed the cohesion they’re going to need all the way through this process to get the job done.”
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