WASHINGTON - In a long-anticipated showdown, liberal Democrats twice failed on Tuesday to inject a government-run insurance option into sweeping health care legislation taking shape in the Senate, despite bipartisan agreement that private insurers must change their ways.
The two votes marked a victory for Montana Democrat Max Baucus, the Senate Finance Committee chairman, who is hoping to push his middle-of-the-road measure through the panel by week's end. It also kept alive the possibility that at least one Republican may yet swing behind the overhaul, a key goal of both Baucus and the White House.
Barack Obama promised to offer affordable health care to all Americans in his campaign and has made the issue a key priority in the first year of his presidency. At the same time, he has said that he did not want the health care overhaul to add to the growing federal budget deficit.
The United States is the only developed nation that does not have a comprehensive national health care plan, leaving about 50 million people without health insurance.
The developments in the Senate occurred as Democrats in the House sought savings to reduce their companion legislation to roughly $900 billion over a decade, the price tag Obama has suggested.
One option under consideration would reduce the number of individuals and families eligible for federal health coverage subsidies to those earning less than 400 per cent of poverty, or about $43,000 for a single person and $88,000 for a family of four, officials said, commenting only on condition of anonymity. The subsidies are designed to make insurance more affordable, and account for a significant per centage of spending in the bill.
Without disclosing any of the details of a marathon closed-door leadership meeting, House Majority Leader Steny Hoyer told reporters, "It's hard work, but we're determined to get it (the bill's cost) down."
If anything, the health care debate was growing more intense. According to one independent organization, television advertising around the issue has been running at a level of more than $1.1 million a day for the past week and now stands over $100 million since the beginning of the year.
Inside the Senate Finance Committee, Sen. Jay Rockefeller, a West Virginia Democrat, said his proposal to allow the government to sell insurance in competition with private industry was far from the federal takeover that critics portray. "It's not. It's optional," he said, adding it was designed to offer competition and a lower-priced, reliable choice for consumers shopping for coverage.
"Washington is not the answer," countered Sen. Orrin Hatch, a Utah Republican.
The key votes were cast by Baucus and four other Democrats, who sided with all 10 Republicans who were united against the proposed change in the bill.
"No one shows me how to get to 60 votes with a public option," Baucus said, employing the term used to describe a new government role in health care insurance. It would take 60 votes in the 100-member Senate to overcome any delaying actions Republicans might attempt to prevent the bill from coming to a final vote.
Supporters of a new role for government said they would try for a federal option again when the full Senate votes.
For the Finance Committee, the day marked the beginning of a second week of public debate over sweeping legislation that generally adheres to conditions that Obama has called for.
The bill includes numerous new consumer protections, including a ban on companies denying insurance on the basis of pre-existing conditions. At the same time it provides government subsidies to help lower-income Americans afford insurance that is currently beyond their means. It also includes steps that supporters say will begin to slow the growth in health care costs nationwide.
After weeks of delay, both the House and Senate now appear on track to vote on different versions of health care legislation this fall. Passage in both houses would set the stage for a compromise to be voted on by year's end.
Rockefeller, whose measure was rejected, 15-8, assailed the insurance industry in withering terms. "I hate to use the word 'rapacious,"' he said -- but quickly added it was warranted. He said omission of a government option from the measure was a virtual invitation to insurance companies to continue placing profits over people, and he predicted they would raise their premiums substantially once the legislation went into effect.
Republicans countered that the proposals would lead to the demise of the private insurance industry and result in a system that is completely run by the government.
Sen. Charles Grassley, an Iowa Republican, cited private studies -- one by the conservative Heritage Foundation, the other by the Lewin Group, owned by the insurer United HealthCare -- saying millions would be pushed out of private insurance as the government held fees to doctors at artificially low levels. He said the result would be a violation of Obama's pledge that consumers would be able to keep their current insurance if they wanted once the legislation went into effect.
There was little appetite on the panel for a full-throated defence of the insurance industry, even among Republicans who voted against an expanded government role.
"The private sector is not doing exactly what it should do with medical services. but it can,' said Sen. Jim Bunning of Kentucky, one of the committee's most conservative members."
All 10 Republicans on the committee voted against the Rockefeller proposal to allow the government to compete directly with insurance companies, Sen. Olympia Snowe among them. Democrats are hoping the Maine lawmaker will eventually break ranks with her party and support the legislation.
Democratic Sen. Chuck Schumer of New York backed an alternative approach that he said would introduce more competition into the insurance market nationwide. His version differed from Rockefeller's chiefly in that it would have allowed for the government to negotiate payments with doctors, hospitals and other health care providers for an initial two-year period rather than pay them at the same rates as under Medicare.
Three Democrats joined all Republicans to defeat Schumer's proposal on a vote of 13-10.
