Thread: Reid, Democrats Push Government Takeover of Health Insurance

Reid, Democrats Push Government Takeover of Health Insurance Industry

Monday, October 26, 2009 6:13 PM

WASHINGTON – Health care legislation heading for the Senate floor will give millions of Americans the option of purchasing government-run insurance coverage, Majority Leader Harry Reid announced Monday, although he stopped short of claiming the 60 votes needed to pass a plan steeped in controversy. Reid, D-Nev., said individual states would have the choice of opting out of the program.

His announcement was cheered by liberal lawmakers, greeted less effusively by the White House and noted with a noncommittal response by Democratic moderates whose votes will be pivotal.

Sen. Olympia Snowe of Maine, the only Republican to vote with Democrats on health care so far this year, issued a statement saying she was "deeply disappointed" in the approach the Democratic leader had chosen.

Reid said, "While the public option is not a silver bullet, I believe it's an important way to ensure competition and to level the playing field for patients with the insurance industry." He said a long-delayed Senate debate on President Barack Obama's call for an overhaul of the health care system would begin as soon as the Congressional Budget Office completes a mandatory assessment of the bill's cost and impact on coverage.

Changes on the public option — and numerous other provisions in the measure — are possible during a debate expected to last for weeks.

And officials said Reid had prepared several variations of key provisions so he could make adjustments in his bill at the last minute and still make sure he was within Obama's target of a $900 billion price tag over a decade.

Both the House and Senate are struggling to complete work by year's end on legislation extending coverage to millions who lack it, to ban insurance industry practices such as denying coverage because of pre-existing medical conditions and to slow the rise in medical costs nationally.

As in the Senate, attempts to complete drafting a measure in the House have been delayed by internal Democratic divisions on the details of a government-run option. Differences in bills passed by the House and Senate would have to be reconciled before any legislation reached Obama's desk.

In an appearance at a Florida senior center during the day, Speaker Nancy Pelosi suggested a new name for the same approach to ease the opposition. She suggested "the consumer option." Rep. Debbie Wasserman Schultz, D-Fla., appearing at Pelosi's side, used the term "competitive option."

Critics say that by any name, the approach amounts to a government takeover of the insurance industry.

In deference to moderates, Reid also said he was including a provision for nonprofit co-ops to sell insurance in competition with private companies.

Senate Democratic officials say the bill Reid envisions would require most individuals to purchase insurance, with exemptions for those unable to find affordable coverage. Large businesses would not be required to provide insurance to their workers, but would face penalties of as much as $750 per employee if any qualified for federal subsidies to afford coverage on their own.

The bill will also include a tax on high-cost insurance policies, despite opposition from organized labor, officials said. In a gesture to critics of the plan, Reid decided to apply the new tax to family plans with total premiums of $23,000 a year. The Senate Finance Committee approved a tax beginning at $21,000 in total premiums.

Nominally, the majority leader has spent the past two weeks melding bills passed earlier by the Senate's Finance Committee and Health, Education, Labor and Pensions Committee. But in reality, he has had a virtual free hand to craft a new measure in consultations with senior members of the two panels and top White House aides.

"I feel good about the consensus that was reached within our caucus and with the White House," he said at his news conference. And we're all optimistic about reform because of the unprecedented momentum that now exists."

Within minutes, the White House released a statement saying Obama was "pleased that the Senate has decided to include a public option for health coverage, in this case with an allowance for states to opt out."

Obama has long voiced support for such a plan but has also signaled it is not a requirement for a health care bill he would sign. He has also said he would like bipartisan support for the legislation — and Snowe appears to be his last, best hope for that.

She favors a standby provision for government coverage if there is not enough competition in the private marketplace. Reid said that was not in his bill. "We hope that Olympia will come back. ... She's a very good legislator. I'm disappointed that the one issue, the public option, has been something that's frightened her."

Sen. Chuck Schumer, D-N.Y., who has long backed a government-run insurance option, said the approach "has a new life because as Americans have learned more about it, they have come to see it is the best way to reduce costs and increase competition in the health insurance industry."

Ben Nelson of Nebraska, the most conservative Democrat in the Senate, "is not committing how we will vote regarding any proposal Senator Reid is advancing," said spokesman Jake Thompson.

Sen. Blanche Lincoln, D-Ark., a moderate seeking a new term in 2010, said through a spokesman she intends to study the details and decide how to vote based on the impact on her home state.

With the support of two independents, Democrats command 60 seats in the Senate, precisely the number needed to overcome any Republican filibuster.

Asked about the prospects for success, Reid answered, "We have 60 people in the caucus. ... We all hug together and see where we come out."

While the controversy over government-run insurance is the most intense, there are numerous other issues to be settled before legislation can win passage.

Obama has set a $900 billion, 10-year price tag for the legislation, and the program would be funded through cuts in future payments to Medicare providers and through higher taxes — an income surcharge on million-dollar earners in the House version and a new levy on high-cost insurance policies in the Senate.

Pelosi has said the House bill will strip the insurance industry of its exemption from antitrust laws, a provision that the Congressional Budget Office said during the day would have only a small impact on the cost of insurance to consumers.

The insurance industry was sharply critical of Reid's announcement.

"A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality. The American people want health care reform that will reduce costs, and this plan doesn't do that," said Karen Ignagni, head of America's Health Insurance Plans.

http://www.newsmax.com/headlines/reid_p ... 77274.html

Sen. Olympia Snowe of Maine, the only Republican to vote with Democrats on health care so far this year, issued a statement saying she was "deeply disappointed" in the approach the Democratic leader had chosen.


What the H did Snowe think the Dems would do?

Harry Reid, shopping for reelection insurance

By Dana Milbank
Tuesday, October 27, 2009

What Harry Reid did Monday afternoon gave new meaning to the phrase "public option."

The Senate majority leader, after haggling behind closed doors with members of his Democratic caucus, realized that he couldn't cobble together the 60 votes he needed to pass health-care legislation with a government-run health plan. So Reid chose another option: He shut down the private talks, booked the Senate TV studio and went public with his own proposal.

"I've concluded," he told the roomful of cameras and reporters, "that the best way to move forward is to include a public option."

For Reid, it was an admission of the formidable power of liberal interest groups. He had been the target of a petition drive and other forms of pressure to bring the public option to the floor, and Monday's move made him an instant hero on the left. Americans United for Change hailed him for refusing "to buckle in the face of withering pressure from the big insurance companies." MoveOn.org admired his "leadership in standing up to the special interests."

Reid, facing a difficult reelection contest next year at home in Nevada, will need such groups to bring Democrats to the polls if he is to survive. But there were a few problems with the leader's solo move. He shifted the public pressure from himself to half a dozen moderates in his caucus. And he defied the Obama White House, which had hoped to keep a bipartisan patina on health-care reform by maintaining the support of Sen. Olympia Snowe (R-Maine).

Then there was the small matter of lacking the votes to pass the public option. "Do you feel 100 percent sure right now that you have the 60 votes?" CNN's Dana Bash inquired. Reid looked down at the lectern. He looked up at the ceiling. He chuckled. He put his palms together as if in prayer. Then he spoke. "My caucus believes strongly there should be health-care reform" was the non sequitur he offered.

Bash reminded the leader that she had asked him "particularly on this idea of a public option."

Instead of answering, Reid, with a Zen expression, looked to the back of the room to solicit a question from somebody else. But Bash piped up again. "Senator Reid, with all due respect, is it possible to answer the question on whether or not you have the votes?"

"I believe we clearly will have the support of my caucus to move to this bill and start legislating," he replied, which also didn't answer the question.

By this time, Reid's spokesman, Jim Manley, had one foot on the podium, as if he were ready to rush the stage and whisk his boss to safety.

Of course, everybody knew that Reid didn't have the votes. That's why he was standing there alone, a Gang of One. As Democratic aides described it, the moment had less to do with health-care policy than with Nevada politics -- and one vulnerable senator's justifiable fear of liberal anger. Now, if the public option unexpectedly survives in the Senate, Reid keeps his hero status on the left. If it fails, he at least gets credit for trying. By the Nobel committee's revised standards, his aspirations might even earn him the prizes in medicine and economics.

More than 50 reporters jammed the Senate TV studio for the afternoon announcement. Photographers crawled on the floor, looking for a good angle. Reid's arrival was unusually punctual, and the usually free-form leader read from a typewritten speech. "I believe there's a strong consensus to move forward in this direction," Reid argued.

But that belief was tested with the first question: Does the legislation stand a better chance of passing with the public option?

Reid offered a quartet of platitudes: "Obviously, public option is something that's been talked about a lot." And: "It's something I believe in the state of Nevada." Also: "All the national polls show a wide majority of Americans support the public option." And finally: "I think it's important that the matter that we work on in the Senate have a public option in it."

Reporters shouted questions from all directions; Reid maintained a serene expression and stared above them, at the cameras, even when asked if he was proposing a "Democrats-only approach."

"I'm always looking for Republicans," Reid quipped. "It's just a little hard to find them." He added his belief that the number of GOP moderates is "extremely limited -- I could count them on two fingers."

The Post's Shailagh Murray asked Reid another question about the lack of a consensus in the Democratic caucus, but by this time the majority leader had grown exasperated. "We all hug together and see where we come out," he answered.

So they were hugging in those closed-door negotiations? Manley had heard enough. "Thank you!" he called out, lending a shoulder to his boss to help him off the stage.

"How much of this is about making liberals happy?" CNN's Bash called after the majority leader.

Reid didn't answer. He didn't have to.

www.washingtonpost.com