Liberals brace for fight over scope of health legislation

Kaiser Health NewsJuly 13, 2009 

WASHINGTON — As leaders in the House of Representatives prepare to release a sweeping health care overhaul plan, they're clinging to their goal of providing a liberal counterpoint to any such legislation that's now likely to emerge from the Senate.

On a broad array of contentious issues — from government's role in providing insurance to the sizes of subsidies for lower-income Americans — the liberals who largely control the agenda in the House are holding fast to their principles. The legislation that's expected to be unveiled will reflect their vision of how to insure nearly all Americans and how to pay for it, including a proposal to tax the wealthy that was announced Friday.

The Democratic liberals face stiff challenges from moderates and conservatives in their own party, however, on the price of the legislation. Growing pressure to lower the cost to $1 trillion or less over 10 years poses a threat to their foremost goal of guaranteeing Americans comprehensive, affordable coverage.

Peter Harbage, a fellow at the Center for American Progress, a liberal research center, said the impact of legislation would vary sharply depending on how well it was financed.

"In terms of uninsured families, will they end up paying out of pocket between 5 percent and 8 percent of their income for health insurance, or is it going to be 17 percent and 20 percent of their income?" he asked. "If it's 20 percent, that's better than what some families have today, but it's difficult to see how progressives are going to see that as a victory."

In the Senate, the Finance Committee remains sharply divided over how much to spend and what taxes to impose. Although it hasn't produced a bill, the Finance Committee appears ready to compromise on subsidies and it may reject a government-run insurance option. That would put it at odds with the Senate Health, Education, Labor and Pensions Committee, chaired by Sen. Edward Kennedy, D-Mass., whose bill is closer to the House liberals' position.

While much of the debate in the Senate has focused on how to achieve a bipartisan agreement, the greatest challenge for Democrats may be uniting their own members. Conflicts extend beyond the usual battles over taxes and deficits. E. Richard Brown, the director of the UCLA Center for Health Policy Research, says that some issues, such as how to trim federal payments to hospitals and doctors, have created regional divisions.

"Everybody's pretty much agreed to force some reduction in provider payment rates in all this, but some of the points of where that should occur are also sources of tension," Brown said. "Sometimes it's between members who represent high-cost areas versus low-cost areas, other times it's between urban versus rural. In other cases, it's more traditionally economic liberal and conservative positions on economic issues."

Joseph Antos, a health policy expert at the American Enterprise Institute, a conservative research center in Washington, credits moderate Democrats with trying to finance a package realistically, but he said they appeared unable to overcome objections from liberal members and labor unions.

"Unions are big supporters of Democrats, and the last thing they want to do is undermine that political base," he said.

As the Senate and House committees try to proceed this week, some of the most contentious issues waiting to be resolved are:

_ A public plan. A top priority of the House Democratic leadership is preserving a government-run entity operating within a new insurance exchange. It would compete with private insurers to provide reasonably priced coverage without restrictions based on applicants' health problems.

However, Senate Finance Committee Chairman Max Baucus, D-Mont., hasn't been able to sell a public insurance option to Sen. Charles Grassley of Iowa and other Senate Republicans, and has been pushing for an alternative recently, possibly nonprofit insurance cooperatives. Where those efforts will lead remains uncertain.

_ Government subsidies. The Finance Committee has been considering limiting subsidies to families and individuals with incomes up to three times the official poverty level. The federal poverty level is $10,830 annually for an individual and $18,310 for a family of three. Under the Finance Committee bill, an individual with an income of three times that amount, or $32,490, wouldn't get a subsidy. Nor would a family with an income three times that level, or $54,930 a year.

The House bill is expected to include subsidies for individuals and families who make up to four times the poverty level, or $43,320 and $73,240, respectively. An analysis by the Center on Budget and Policy Priorities, a liberal research center in Washington, noted that substantial numbers of people with incomes barely above three times the poverty level could have trouble coming up with the money to pay the full price for coverage.

_ Insurance requirements. Many experts say that individuals should be required to obtain insurance and employers should be required to offer it, under the threat of penalties. However, the Blue Dog Coalition, which represents scores of conservative House Democrats from largely rural areas of the South and Midwest, warned House leadership in a letter last week that an employer requirement "further exacerbates the challenges faced by small businesses."

(Kaiser Health News reporter Jessica Marcy contributed to this article.)

(Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy-research organization that isn't affiliated with Kaiser Permanente.)

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