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House, Senate Democats at odds on health care overhaul

Saturday, October 17, 2009 | 7:34 p.m. CDT; updated 7:41 p.m. CDT, Saturday, October 17, 2009

WASHINGTON — It's not just Democrats and Republicans who are at odds over health care reform. House and Senate Democrats are going after each other over the shape of the legislation that is President Barack Obama's top domestic priority.

The disputes among Democrats might prove the most grueling test of all as Congress tries to write a bill that fulfills Obama's goal of extending health care coverage to millions of Americans and reining in rising medical costs.

The disagreements extend well beyond whether to allow the government to sell insurance in competition with the private market, though fissures over the so-called public plan — preferred in the House, less so in the Senate — have drawn the most attention.

Some of the toughest fights loom over what requirements should be placed on employers to see that their workers are covered, and perhaps stickiest of all, how to make coverage affordable and pay for extending it to millions of uninsured.

Senators would tax high-value health insurance plans to pay for covering the uninsured, an approach supporters say would curb health costs because it would lead to employers offering less generous benefits. The more populist House would tax the highest-income people, placing the burden of caring for the neediest Americans on the backs of millionaires.

"I don't know how you split that difference," said Rep. Artur Davis, an Alabama Democrat who is a member of the House Ways and Means Committee. "It's not just about numbers. These are philosophical differences about how you pay for reform."

Any showdown between the House and Senate is a ways off and will happen only if both succeed in passing their own health bills. Democratic leaders in both houses are working to finalize their legislation — a process that is itself fraught with difficulties — in time to hold floor debates within the next several weeks.

Presuming the House and Senate do pass bills, they will go to a conference committee made up of Democratic leaders and key committee chairs from both chambers. There, with plenty of input from the White House, the most powerful members of Congress will fight it out in private.

Senate Majority Leader Harry Reid of Nevada put it mildly this past week: "There are different views in the House," he said.

Democrats are increasingly optimistic about the possibility of success on health legislation, and they're quick to point out the many areas where the House and Senate legislation overlap.

Both are expected to carry price tags of about $900 billion over 10 years. Both would require almost all Americans to purchase insurance and contemplate subsidies for lower-income people. Both set up new marketplaces or exchanges where individuals and small businesses can shop for and compare insurance plans. Both put new requirements on insurance companies, barring them from dropping sick people or refusing coverage to people with pre-existing medical conditions.

Even within these commonalities there are differences that will have to be worked out in what are sure to be tough and lengthy negotiations. But the big sticking points are these:

—Government insurance

House Democrats are adamant about allowing the government to sell insurance to people who don't have affordable care and are too young for Medicare or make too much money for Medicaid. The government-run Medicare program covers the elderly, while Medicaid offers coverage to the poor. The leading Senate bill contains no such public option, and even if senators ultimately agree to some public plan variant, it's certain to be much weaker than the House version. Speaker Nancy Pelosi of California has staked out an uncompromising position on the issue. "I want to send our conferees to the table with the most muscle for America's middle class," she says.

—Employer responsibility

The House includes a requirement for employers to provide insurance coverage to their employees or pay a penalty. There's no such mandate in the leading Senate bill. Instead, employers would be required to pay a fee for any employee who obtains coverage with government subsidies. The distinction may seem subtle, but it makes a big difference to business groups and Democrats on both ends of the ideological spectrum.

—Paying for the bill

In recent weeks, the issue of affordability has become central to the health overhaul debate, in part because it's a critical concern for Sen. Olympia Snowe of Maine, who has considerable leverage as the only Republican in Congress to have voted in favor of Democratic health care legislation. The House offers more generous subsidies to lower-income people than the Senate, and senators have already talked about adjusting their subsidies upward. That's where the cost of the bill and the different methods used to pay for it in the House and Senate come in.

Senators favor taxing so-called "Cadillac" insurance plans — those costing more than $8,000 annually for individuals and $21,000 for families. They argue that the cost of paying for health care legislation should come from within the health care system, and that the insurance plan tax has the benefit of nudging people to use fewer medical services, which would get at the problem of overutilization of care, a major factor in the country's spiraling medical costs.

The Cadillac plan tax faces major opposition in the House, where more than 100 Democrats oppose it. Some of the opposition stems from organized labor which fears its members could be subject to the tax. House members say their approach — a tax on individuals making more than $500,000 a year and households making more than $1 million — is a fairer way to go and would find more favor with the public.

Some senators share concerns about the high-value insurance plan tax and have already decided to adjust it so more plans are exempt, according to Sen. Tom Harkin, an Iowa Democrat. But some senators are skeptical about making a small group of the highest-income Americans pay for everyone else, and they're adamant about the need to use a financing mechanism that would have the benefit of keeping down health care costs.

In the end, there may be only one way to settle that dispute and others, according to the No. 2 Senate Democrat, Dick Durbin of Illinois: "I think at some point a fellow named Obama is going to be in the room."

 


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