Former Senate leaders offer compromise on healthcare

WASHINGTON -- Three former Senate majority leaders presented a bipartisan healthcare plan today, mapping out a potential path to a compromise as animosity over policy differences intensified on Capitol Hill.

Republicans Howard Baker and Bob Dole and joined Democrat Tom Daschle in a grand meeting room in Union Station today to unveil a plan that tackled, at least in broad terms, the biggest sticking points: whether to have a national public insurance plan (no, but states could create their own); how much it should cost (around $1.2 trillion over 10 years); whether to pay for it by taxing the health benefits people get through work (yes, but only minimally).

Former Democratic Senate Majority Leader George Mitchell of Maine, who is serving as President Obama's envoy to the Middle East and was not present today, also helped develop the plan.

The leaders' basic proposal did not look so different from the Democratic proposals circulating on Capitol Hill: It would provide sliding scale subsidies for the working poor and the middle class, regulate the private insurance market more stringently and set up local insurance "exchanges" to help make it easier for individuals to buy insurance.

It also included an extensive list of proposals to improve the quality of care, drive costs down and invest in prevention to keep the population healthier.

The cost would be less than the initial plans proposed by Senate Democrats -- a draft Finance Committee plan was north of $1.5 trillion, according to an aide -- but more than what Congressional Republicans would like to spend.

One of the most important compromises to emerge: The former majority leaders backed taxing a portion of the most expensive employer-sponsored health benefits to help pay for their proposal. This may give new momentum to that idea, which President Obama has repeatedly discouraged and many liberal Democrats on Capitol Hill oppose.

Senator Max Baucus and other centrists have argued that taxing a portion of the most generous employer sponsored benefits for the highest income workers is one of the fairest and easiest ways to help pay for health care. But many liberal Democrats are afraid of levying new taxes during a recession and think it would hurt union workers who have given up salary increases to preserve generous benefits.

The leaders capping the tax exclusion at the price of the plans provided to members of Congress, which is just under $5,000 for an individual and around $13,000 for a family, adjusted for age and geography, which can dramatically influence the cost of insurance.

The three senators also tackled the fraught issue of the public health insurance option. Daschle, like many Democrats, firmly supports a strong Medicare-style public insurance program; Baker and Dole, like many in the GOP, are deeply concerned about too much government involvement in the insurance market. Daschle said this was one of the most difficult issues they faced.

They found a middle ground by deciding to let a more heavily regulated private market try to work first, and by letting states choose to establish their own public insurance plans. The federal government would be allowed to step in if, over time, affordable insurance options did not emerge in every state.

"It's time to find consensus here," Daschle said. "We've come too far and gained too much momentum for our efforts to fail on disagreement on one single issue."

The leaders also agreed that individuals should be required to purchase insurance.

"I had a lot of trouble with mandates, just as Tom had trouble with the public plan," Dole said. "But if we can't compromise... how are we ever going to get a bill passed?"