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Democratic chairman pushes for health care changes

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., right, talks with committee member Sen. Jay Rockefeller, D-W.Va., on Capitol Hill in Washington, Tuesday, Sept. 22, 2009, during the markup of health care legislation. Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., right, talks with committee member Sen. Jay Rockefeller, D-W.Va., on Capitol Hill in Washington, Tuesday, Sept. 22, 2009, during the markup of health care legislation. (AP Photo/Susan Walsh)
By David Espo
AP Special Correspondent / September 22, 2009

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WASHINGTON—Bidding for support from Democrats as well as a single Republican, the chairman of the Senate Finance Committee gaveled open a long-awaited debate over health care Tuesday with fresh plans to reduce costs on working-class families and impose new obligations on the insurance industry.

"This is our opportunity to make history," said Sen. Max Baucus, D-Mont., who announced he was adding $50 billion to draft legislation to help those who would be required to purchase insurance.

The Republican whom Baucus has courted most assiduously, Sen. Olympia Snowe of Maine, said noncommittally the legislation was "a solid starting point -- but we are far from the finish line."

Democrats hope to push the bill through committee by the end of the week, although it was clear many Democrats want to see changes first. In one statement that could cause political heartburn for Democrats and President Barack Obama, the director of the Congressional Budget Office, Douglas Elmendorf, said the proposal could wind up reducing benefits for seniors enrolled in private Medicare plans.

Obama has said, "Nobody is talking about cutting Medicare benefits."

Elmendorf also estimated in a letter to Baucus that some families with annual incomes in the range of $66,000 could wind up spending as much as 20 percent of that -- $13,300 -- in out-of-pocket health expenses such as premiums and copays.

The panel is the fifth and last of the congressional committees to review Obama's call for far-reaching legislation to reduce the ranks of the uninsured, expand protections for those already covered and generally reduce the ruinous growth in medical costs nationwide.

Baucus has said he hopes the committee can complete work by week's end, although more than 500 amendments were pending to the 10-year, nearly $900 billion bill.

Most Republicans were far harsher in their appraisal than Snowe, although they paused first in their criticism long enough to praise Baucus for spending months in an attempt to seek a bipartisan compromise.

Sen. Jon Kyl, R-Ariz., called the measure a "stunning assault on our liberty" and cited a requirement for individuals and families to buy insurance. Sen. Charles Grassley of Iowa, R-Iowa, who had been involved in private negotiations on the Baucus plan, said the Senate Democratic leadership had imposed a mid-September deadline, "causing the end to our bipartisan work before it was done." He called it an absurd move, "utterly and completely appalling."

It was unclear whether the committee would debate Baucus' decision not to permit the government to sell insurance in competition with private industry. Many liberal Democrats favor the idea, saying it is essential to hold down costs, but some moderates inside the party are opposed, as are all Republicans.

Baucus' bill calls instead for nonprofit co-ops to compete with private industry.

The committee recessed late Tuesday, having approved just one amendment, a non-controversial measure by Sen. Kent Conrad, D-N.D., to find ways that hospitalized Medicare patients could be monitored electronically from afar by specialists elsewhere. It passed on voice vote.

Much of the day was taken up by senators' opening statements and questions and criticism from Republicans. In a sign of the tensions evoked by the bill, several committee Democrats called for increasing the rebates that drug companies must pay the government for certain low-income patients. That would breach an agreement among the White House, Baucus and drug makers, and Baucus postponed a vote until Wednesday.

Approval of legislation by the Finance Committee would clear the way for action within a week or so on the Senate floor. Across the Capitol, majority Democrats are working on the same timeline as they push for a vote in the House.

So far, all four committees to vote on the issue have done so strictly along party lines, and Republican leaders have worked hard to avoid helping the Democrats and Obama gain a significant accomplishment. But Baucus' oft-stated desire for bipartisanship pushed his bill toward the political center, to the consternation of fellow Democrats, and the changes he unveiled seemed designed to appeal to critics within his own party as well as to reach out to Snowe.

The most significant would sweeten the subsidies for individuals and families with incomes up to four times the government's poverty level -- $43,320 for individuals and $88,200 for a family of four. In addition, Baucus called for lower out-of-pocket medical costs for some lower-income families, and recommended making it easier for those who cannot afford the coverage offered by employers to qualify for federal subsidies so they can purchase individual policies.

To hold down costs for older consumers, he also reduced the ability of insurance companies to charge more for coverage on the basis of age, from five times the base rate to four times.

Baucus also decided to reduce the penalty for families who defy a proposed mandate to purchase coverage, from $3,800 to $1,900.

Additionally, he rewrote the bill stating that individuals who currently have coverage against catastrophic medical costs need not purchase more comprehensive insurance.

The revisions would significantly alter a proposed tax on high-cost insurance policies, a measure that has drawn particular opposition from organized labor and liberal Democrats. Baucus said he would exempt from the tax policies sold to "high risk" workers, such as fire fighters.

At the same time, he raised the level of the tax to recoup some of the revenue that would otherwise be lost.

Nearly half the Democrats on the committee had served notice they would attempt to revise the proposed tax, and Baucus' decision there and on the subsidy levels was a bow to political reality as he tries to push his bill through the panel.

According to information distributed by the committee, he also incorporated a half-dozen changes backed by Snowe, on a variety of issues, on issues ranging from small businesses to Medicaid.

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Associated Press writers Ricardo Alonso-Zaldivar and Erica Werner contributed to this report.