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House Speaker Nancy Pelosi and other House leaders were unable to round up the necessary votes for their preferred version of the government insurance plan.
updated 10/28/2009 8:58:23 PM ET 2009-10-29T00:58:23

House Democrats reached agreement Wednesday on key elements of a health care bill that would vastly alter America's medical landscape, requiring virtually universal sign-ups and offering a new government-run insurance option for millions.

House Speaker Nancy Pelosi planned a formal announcement Thursday morning in front of the Capitol. Lawmakers said the legislation could be up for a vote on the House floor next week.

The rollout will cap months of arduous negotiations to bridge differences between liberal and moderate Democrats and blend health care overhaul bills passed by three separate committees over the summer. The developments in the House came as Senate Majority Leader Harry Reid, D-Nev., tried to round up support among moderate Democrats for his bill, which includes a modified government insurance option that states could opt out of.

Reid met Wednesday with Arkansas Sen. Blanche Lincoln, who faces a potentially tough re-election next year.

The final product in the House, reflecting many of President Barack Obama's priorities, includes new requirements for employers to offer insurance to their workers or face penalties, fines on Americans who don't purchase coverage and subsidies to help lower-income people do so. Insurance companies would face new prohibitions against charging much more to older people or denying coverage to people with health conditions.

Bill tops $1 trillion over 10 years
Pelosi has also said the bill would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price fixing and bid rigging.

The price tag, topping $1 trillion over 10 years, would be paid for by taxing high-income people and cutting some $500 billion in payments to Medicare providers. The legislation would extend health coverage to around 95 percent of Americans.

"I'm pretty confident that we've got the right pieces in place," said Rep. George Miller, D-Calif., chairman of the Education and Labor Committee, one of the three panels involved in writing the bill. "We can quibble over parts of it, but the fact is when you're taking a 60-year-old system that grew up in a rather haphazard fashion and you're trying to bring some coherence to it, these are sort of the things you have to do at the beginning of that process."

Plenty of work remains to be done before a bill could land on Obama's desk — and there's still no guarantee that Congress can complete the legislation before year's end, as the president wants. If Obama does sign a health overhaul bill, he will have bucked decades of failed attempts by past administrations, most recently by former President Bill Clinton in the 1990s.

House leaders want to begin debate on their bill next week, with the aim of finishing before Veteran's Day, Nov. 11. The Senate is aiming to start debate sometime in the next several weeks.

Video: Lieberman sides against constituents Bills passed by the House and Senate would have to be merged before a final product could be sent to Obama, and there are a number of differences between the two chambers that would have to be reconciled. Among them are the different approaches to the public plan — the House does not include the opt-out provision for states; more stringent requirements for employers in the House bill; and a tax on high-value insurance plans that the Senate uses to pay for the bill but that's absent from the House version.

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In the end, Pelosi, D-Calif., and other House leaders were unable to round up the necessary votes for their preferred version of the government insurance plan — one that would base payment rates to providers on rates paid by Medicare. Instead, the Health and Human Services secretary would negotiate rates with providers, the approach preferred by moderates and the one that will be featured in the Senate's version.

That marked a defeat for liberal lawmakers, who argued for months that a public insurance plan tied to Medicare would save more money for the government, and offer cheaper rates to consumers. Moderates feared that doctors, hospitals and other providers, particularly those in rural states, would be hurt, and in the end they looked poised to prevail, despite constituting a distinct minority in the 256-member House Democratic caucus.

‘We were laughed at in August’
Some liberals were prepared to accept the negotiated rate structure. Others were still withholding support, even while pointing to Reid's inclusion of a government insurance plan in the Senate bill as a victory in itself.

"We were laughed at in August. Who would have thought that the Senate bill would have a public option?" said Rep. Lynn Woolsey, D-Calif., a co-chair of the Congressional Progressive Caucus.

Woolsey was noncommittal about whether progressives would accept the negotiated rates. "This is not walkaway time and it is not acceptance time," Woolsey said.

Members of the progressive caucus, along with lawmakers from the black and Hispanic caucuses, were scheduled to meet with Obama at the White House on Thursday, she said.

The legislation would set up a new purchasing exchange where small businesses and individuals without affordable health care options could shop for and compare insurance plans. The new public plan would be one offered in the exchange, and it would be optional; an analysis by the Congressional Budget Office of early versions of the bill said that the public plan would be expected to cover 9 million to 10 million people by 2019.

The House plan also envisions a significant expansion of Medicaid, the federal-state health care program for low income people.

Democratic leaders still faced disputes over prohibiting taxpayer money for abortions and health care for illegal immigrants, issues they hoped to resolve after the bill's unveiling.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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