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Baucus changes health bill over Dem concerns

Senate aides say that Senate Finance Committee Chairman Max Baucus is changing his health care bill to make insurance premiums more affordable after fellow Democrats raised concerns.
Democrats Debate Baucus Health Care Reform Proposal
Senate Democrats are concerned that the required health insurance under Max Baucus' bill wouldn't be affordable for low-income people.Alex Wong / Getty Images
/ Source: The Associated Press

The chairman of the Senate Finance Committee was revising his sweeping health care bill Monday to address serious concerns from fellow Democrats and a key Republican about insurance costs, part of his ongoing struggle to deliver on President Barack Obama's top domestic priority.

The changes — which include possibly halving a penalty for people who don't comply with a new requirement to purchase insurance — came a day ahead of a committee session beginning Tuesday to amend and vote on the bill, which Sen. Max Baucus, D-Mont., hopes his panel will approve by the end of the week.

"We've come a long, long way to satisfying the affordability concerns," Baucus said Monday evening after meeting with committee Democrats.

"There will still be amendments offered, as there should be ... But my sense is the meeting today went a long way to dealing with a lot of the concerns that senators had," he said.

Baucus' 10-year, $856 billion package would extend coverage to about 29 million Americans who lack it now and institute insurance market reforms, such as prohibiting higher premiums for women or the denial of coverage to sick people. It would make almost everyone buy insurance or pay a fee, give subsidies to the poor to help them buy coverage and create new online exchanges where small businesses and people without government or employer-provided insurance could shop for plans and compare prices.

Release of the bill last week gave a boost to Obama's health care agenda after a summer of angry town hall meetings, though plenty of political and policy hurdles remain before Congress could send a bill to Obama's desk.

In the days ahead, Baucus faces the difficult task of keeping his 13 committee Democrats on board without moving so far to the left that he alienates Sen. Olympia Snowe, R-Maine, the only one of the panel's 10 Republicans seen as likely to vote for the bill.

Snowe's support could become even more critical presuming health overhaul legislation makes it to the Senate floor, as Democrats look for the 60 votes needed to advance the bill.

Snowe and a number of Finance Committee Democrats have raised concerns about whether subsidies in Baucus' bill are generous enough to make insurance truly affordable for low-income people. There are also concerns about a new tax on high-value insurance plans, which some fear would hit middle-class workers even though Baucus is directing it at so-called "Cadillac" insurance plans that he says are enjoyed by a minority of U.S. workers.

Revisions in the works
Senators offered a raft of amendments on both those issues, and Baucus was incorporating some of the approaches in revised legislation he'll unveil at Tuesday's committee meeting. Details weren't final, but Baucus said he was looking at lowering a $3,800 penalty that his bill would levy on households that don't comply with a new "individual mandate" to purchase insurance.

Sen. Kent Conrad of North Dakota, a key Finance Democrat, said senators were discussing cutting that penalty in half, to $1,900. The $950 penalty for individuals who don't buy coverage, however, would not be changed.

Also under discussion, according to Conrad, was lowering the maximum amount of income people could pay in premiums before becoming eligible for subsidies. It's now 13 percent. Senators were also looking at adjusting the new insurance excise tax — now set to hit plans valued at $21,000 for a family and $8,000 for an individual — so that it's limited to even more expensive plans over time, Conrad said.

The changes could add to the cost of the $856 billion bill, but since the bill would raise about $50 billion more than it spends over 10 years, there is some wiggle room. Conrad said new cuts were being considered to pay for the changes but he declined to specify what they were. The bill already would cut planned Medicare spending by $500 billion over a decade.

Baucus' legislation is the most conservative, and cheapest, of five health care bills in Congress. The four other bills have already passed committees in the House and Senate, but Baucus' is the most closely watched because he tried for a bipartisan deal, though without succeeding. In the other committees, majority Democrats passed legislation without GOP support that reflected mostly liberal priorities.

Also, the Finance Committee has a moderate makeup that resembles the Senate as a whole, so legislation that passes Finance could find favor on the Senate floor.

Affordability key concern
Affordability emerged as perhaps the biggest concern for Snowe and committee Democrats after the bill was released last week, but it's hardly the only one. Liberals like Sen. Jay Rockefeller, D-W.Va., want the bill to include a new public insurance plan to compete with the private market. Baucus included nonprofit co-ops instead, and Rockefeller plans to try to delete those and incorporate a public plan. Committee Republicans, for their part, have readied amendments to strike core portions of the bill and replace them with GOP priorities such as caps on medical malpractice payouts.

A total of 564 amendments were filed, though the number taken up this week will likely be much lower.

Once the Finance Committee approves the bill, Senate leaders would have to combine it with a more liberal version passed by the Health, Education, Labor and Pensions Committee before bringing legislation to the Senate floor. A similar process is happening in the House with bills passed by three committees there. House and Senate Democratic leaders are both aiming for floor action this fall. Obama wants to sign a bill this year.

House Speaker Nancy Pelosi recommitted herself to that timetable during an appearance in Philadelphia on Monday after touring a hospital there. "We will have legislation that will be passed in a matter of weeks, it will be signed in a matter of months by Barack Obama and it will have a very positive impact on America's families," Pelosi said. Pelosi also said, as she has in the past, that the House couldn't pass a bill without a public insurance plan.