Two Thorny Details Bedevil Health Bill

By JANET ADAMY and GREG HITT

WASHINGTON -- Two pressure points are emerging in Congress's rush to pass health-care legislation by the August break: how to pay for the package and whether to create a new public health-insurance plan.

Douglas Elmendorf, director of the Congressional Budget Office, said Monday his office has given lawmakers a "tremendous quantity of numbers" as they weigh how much it will cost to extend coverage to millions of uninsured Americans and how much revenue will be raised by proposed tax increases.

The nonpartisan office's numbers are critical because they are the basis for determining a bill's price tag, and whether, as President Barack Obama has promised, the plan won't increase the budget deficit.

"Is it every number they want?" said Mr. Elmendorf. "No. Because every number they get, you then think of four ways to tweak it."

Lawmakers are getting closer to unveiling sweeping changes that would reshape taxes, health insurance and coverage for the 46 million people in the U.S. who don't have it.

As soon as this week, a Senate committee is expected to release the first piece of legislation, with a second bill to follow later this month. The House is expected to unveil its health bill by the middle of the month. Both chambers are aiming to pass legislation by August and deliver a single bill to Mr. Obama by October.

The legislation is expected to create federal- or state-run exchanges where consumers can comparison shop for health-insurance plans. Low-income Americans would get tax credits or other help to buy insurance, and the government would spend more to prevent chronic disease.

A long-term goal is to rein in medical spending. The White House says sharply rising health costs are the biggest threat to the nation's fiscal stability.

The White House wants to seize on the president's popularity and Americans' growing frustration with health care. Mr. Obama has invited Democrats on the House Ways and Means Committee, one of the launching pads for the initiative on Capitol Hill, to the White House Tuesday.

Organizing for America, the Democratic grassroots group that helped elect Mr. Obama, says it has enlisted hundreds of thousands of Americans to rally behind a health overhaul by calling their neighbors, holding discussions in their homes and submitting their personal health-care stories into a national database.

"The level of support we've seen for our health-care effort is far greater than anything we've done up to this point," says Mitch Stewart, the group's director.

But Congress is running into problems determining how it will pay for the overhaul, which is expected to cost some $1.2 trillion over the next decade.

Some Republicans say Democrats are underestimating the cost of the proposed changes. "It's going to be shocking how much it's going to cost," said Sen. Orrin Hatch (R., Utah).

Another problem for Republicans is Mr. Obama's support for a new public health-insurance plan. Democrats disagree about whether to have such a plan.

On Monday, nine Republicans from the Senate Finance Committee, led by Sen. Hatch, released a letter to President Obama saying the public plan would result in "a federal government takeover of our healthcare system."

Also on Monday, Sen. Kent Conrad (D., N.D.) outlined in a meeting with top senators a new proposal to create nonprofit insurance co-ops that would act as a public insurance plan for individuals and small employers, a Senate aide said. The government would provide loans or grants to help start the co-ops, according to a summary of the proposal.

Lawmakers are also divided about whether to begin taxing health benefits to help pay for the changes, an idea Mr. Obama rejected during his campaign. A bipartisan proposal in the Senate Finance Committee calls for taxing employees who have particularly generous health benefits. That is meeting resistance from organized labor, whose members tend to have some of the nation's best health benefits.

The committee is also weighing whether to tax high-income employees on some portion of their health benefits.

There is considerable support among lawmakers and industry groups to begin requiring all Americans to have health insurance, with the exception of some low-income Americans. More controversial is whether business should face any requirements.

A draft of a bill led by Sen. Edward Kennedy (D., Mass.), chairman of the Health, Education, Labor and Pensions Committee, calls for a mandate on business to provide coverage or pay a penalty. That bill could be unveiled as early as this week.

Senate Finance Committee Chairman Max Baucus (D., Mont.) is trying to craft a bipartisan bill with Sen. Chuck Grassley of Iowa, the ranking Republican on the committee.

The effort to write a bill is gaining steam in the House. Three top committee chairmen -- Reps. Charles Rangel (D., N.Y.) of the House Ways and Means Committee, Henry Waxman (D., Calif.) of Energy and Commerce, and George Miller (D., Calif.) of Education and Labor -- are set to brief a full caucus of House Democrats Tuesday on efforts to develop a plan.

The three chairmen are backing a bill that would create a public option that would compete in the marketplace against private insurers.

Mr. Rangel said the legislation would include a mandate that employers and individuals buy coverage, and would include incentives to help small businesses comply. The legislation would also create an exchange through which consumers could shop for insurance.

Write to Janet Adamy at janet.adamy@wsj.com and Greg Hitt at greg.hitt@wsj.com

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