Senate Likely to Have Edge as Democrats Craft Final Health Bill

By Kristin Jensen and Nicole Gaouette

Jan. 4 (Bloomberg) -- Senate Democrats will have the upper hand as U.S. lawmakers return to Washington this month to confront the last major hurdle in the effort to overhaul the nation’s health-care system.

With Democrats in both chambers under pressure to craft compromise legislation, the biggest areas of contention are the different taxes the House and Senate chose to fund their bills, how strictly to bar federal money for abortion and whether to create a government-run program to compete with private insurers.

Senate Democrats have more clout because they have no room for defections, analysts and lawmakers said. Even so, House members will push for their provisions, including the public insurance program, likely making the negotiations among the most complex in congressional history.

“There’s only a certain amount of wiggle room and I don’t know where it is,” Senator Jay Rockefeller, a West Virginia Democrat, said in an interview.

Lawmakers aim to combine their bills and hold final votes in each chamber around the time President Barack Obama gives his State of the Union address in late January.

Deadlines already have been missed. House and Senate leaders originally planned to pass bills by August. The House passed its measure on Nov. 7; the Senate acted on Dec. 24.

Insurers, Drugmakers

In the final measure, health insurers such as Minnetonka, Minnesota-based UnitedHealth Group Inc. and medical companies such as device maker Medtronic Inc. of Minneapolis and drugmaker Merck & Co. of Whitehouse Station, New Jersey, will look to reduce billions of dollars in annual fees placed on their industries and fight off new threats to their profits.

And interest groups such as the Business Roundtable, which represents the chiefs of many of the biggest U.S. companies, and the American Medical Association said they would keep pressing their interests.

Both versions of the measure would require Americans to get insurance or pay a penalty, offer expanded government aid and online purchasing exchanges to help buy policies, and impose new requirements that insurers accept customers regardless of pre- existing conditions.

‘Fragile’ Coalition

Senate Democrats say there isn’t much room for maneuvering away from their plan. Finance Committee Chairman Max Baucus of Montana called the coalition in his chamber “fragile” and Nebraska Senator Ben Nelson, the last Democrat to sign onto the legislation, said his continuing support wasn’t guaranteed.

“Just look at how difficult it has been to get 60 votes,” the number needed to ensure passage, said Senator Kent Conrad, a North Dakota Democrat. If the merged bill “is dramatically different, it will be hard to get the votes,” he said in an interview.

Some House Democrats weren’t arguing. “We’re not going to rubber-stamp the Senate bill,” Democratic Congressional Campaign Committee Chairman Chris Van Hollen of Maryland said on “Fox News Sunday” Dec. 27. “On the other hand, we recognize the realities in the Senate.”

Instead of the new government-run insurance plan, or public option, Senate Majority Leader Harry Reid called for the U.S. Office of Personnel Management, which oversees benefits for federal workers and members of Congress, to contract with insurers to offer multistate plans on the exchange. The compromise faces opposition from House members and labor unions.

‘House of Cards’

Before adjourning last month, House Speaker Nancy Pelosi of California said her members were open to a compromise while warning they would fight for their ideas.

“It’s like this house of cards,” said Jennifer Duffy, senior editor of the nonpartisan Cook Political Report. “You can’t fiddle with one without affecting every other one.”

One plan they might revisit is a so-called trigger, which would put a public option in place if premiums aren’t affordable enough after a certain time, Duffy said. The idea came from Maine Senator Olympia Snowe, the only Republican to support a health-care bill on the committee level.

Snowe said she told Obama she is open to backing a House- Senate compromise. “A lot of issues need to be addressed,” she told reporters in December.

The Senate doesn’t have the votes for immediately creating a government insurance program, said James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. “It’s going to be ‘no’ to the House on the public option,” he said.

The two chambers are also far apart on ways to fund the legislation. While the Senate included a tax on high-end insurance plans, the House plans a new surtax on millionaires that has little Senate support.

‘Thorny’ Issue

“It’s thorny,” Thurber said. “I would think that they would lean more heavily toward the Senate bill in the end in almost all of the contentious things.”

The conferees will also have to consider ways to make sure federal subsidies used for buying insurance in the exchanges don’t pay for abortions. Language passed by the House has drawn opposition from abortions-rights supporters, who say they won’t vote again to back legislation containing that provision.

All this will take place as Republicans oppose the legislation, saying it might crowd out private insurers, raise taxes and widen the budget deficit.

“This, for a lot of members, will be the most consequential vote of their careers,” Duffy said.

--With assistance from Ryan J. Donmoyer, Jonathan D. Salant, Brian Faler, Laura Litvan, James Rowley, and Catherine Dodge in Washington. Editors: Mark McQuillan, Robin Meszoly

To contact the reporters on this story: Kristin Jensen in Washington at +1-202-624-1823 or kjensen@bloomberg.net; Nicole Gaouette in Washington at +1-202-624-1924 or ngaouette@bloomberg.net

To contact the editor responsible for this story: Jim Kirk at +1-202-654-4315 or jkirk12@bloomberg.net

-0- Jan/04/2010 05:01 GMT