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Senate leaders facing crunch on health plans

Must merge two versions of legislation

Senator Charles Schumer said Democrats ‘have some differences ... but we’re very genuinely working them out.’ Senator Charles Schumer said Democrats ‘have some differences ... but we’re very genuinely working them out.’
By Lisa Wangsness
Globe Staff / October 2, 2009

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WASHINGTON - The Senate Finance Committee planned to finish work on sweeping health care legislation early this morning and is expected to take a final vote next week, as Senate leaders forged ahead to the next painstaking steps: merging that bill with an earlier version written by the late Senator Edward M. Kennedy’s committee, then moving the combined package to the Senate floor.

In a sign that Democrats are feeling increasing pressure to speed up work on their top domestic priority, Senate majority leader Harry Reid has canceled a tentative recess the week of Columbus Day. The 2010 midterm elections are looming, large legislative priorities are piling up, and leaders are hoping to avoid a logjam.

The coming days will feature intense closed-door wrangling among Senate Democrats as they struggle to work out key differences between the two versions of the bill, reflecting divisions within their own party over such issues as whether there should be a government-backed insurance option, which industries should be taxed to pay for nearly $500 billion in insurance subsidies to expand coverage, and what responsibilities individuals and employers should have. Unsettled disagreements will be fought out on the floor, and later in a conference committee with the House.

“We have some differences among ourselves, but we’re very genuinely working them out,’’ Senator Charles Schumer, Democrat of New York, told reporters yesterday.

Both Reid, Democrat of Nevada, and Schumer said yesterday they believed that the legislation would contain a public insurance option to compete with private plans, even though the Finance Committee rejected one earlier this week. Public options would be established under all four versions approved by other congressional committees.

Critics, including most Republicans and many moderate Democrats, fear that a government insurance plan would edge private insurers out of the market, ultimately leaving consumers without an alternative.

Liberal groups intensified pressure on Democrats yesterday to include a public option. Health Care for America Now began airing ads juxtaposing the ivy-draped mansion of United Health’s chief executive with a humble house; the ad said the small home’s owner faced foreclosure because of medical bills.

Senators also are offering up a variety of potential alternatives to a new government plan, though some of them would considerably stretch the definition of the public option. The original concept was that of a Medicare-like entity, run by the government, that could take advantage of its enormous size to set or negotiate rates, keep administrative costs low, and tap existing Medicare provider networks.

“ ‘Public option’ is a relative term,’’ Reid said yesterday.

Among the alternatives: Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, has proposed establishing private nonprofit insurance co-ops (which are contained in the Senate Finance Committee bill); Senator Olympia Snowe, Republican of Maine, prefers a “trigger’’ that would establish a public plan in any state where at least two private insurers don’t offer affordable plans for 95 percent of the population; and Senator Thomas R. Carper, Democrat of Delaware, is circulating another idea to let states decide whether to establish co-ops, a local public insurance plan, or opening their state employees plan to the uninsured.

Last night the Finance Committee also made it easier for people to get a waiver from the new requirement to buy insurance. Under an amendment brought by Schumer and Snowe, out of concern about affordability for middle-class families, people would not be penalized for being uninsured if the cheapest available plan were more than 8 percent of their adjusted gross income, rather than the 10 percent in the original proposal. It would also ease the penalties for being uninsured and phase them in gradually over five years.

The committee also incorporated into its bill a proposal by Senator Maria Cantwell, Democrat of Washington, that would give states the option of negotiating with insurers to provide coverage for low-income people who earn between 133 percent and 200 percent of the federal poverty level, or about $44,000 a year for a family of four.

The federal subsidies for people in this group would go to the states, rather than to the insurance companies, and the states could use the money and their bargaining clout to obtain low-priced, high quality insurance. The program would be similar to Massachusetts’ Commonwealth Care program, in which the state’s Commonwealth Health Insurance Connector Authority negotiates with providers to offer subsidized insurance to people earning under 300 percent of the poverty level .

“We are going to do everything we can to drive down the cost of insurance for people in this country, and at least this is a start,’’ Cantwell said.

Susan Milligan of the Globe staff contributed to this report.