Democrats work to finalize health legislation

[October 15, 2009]  WASHINGTON (AP) -- White House officials and Senate Democrats are meeting in private to iron out differences on a health care overhaul that could affect every American. In public, they're united by a common enemy: the health insurance industry.

The inside game and the outside game are intersecting on Capitol Hill, with Senate Majority Leader Harry Reid testifying at a public hearing in favor of revoking health insurers' antitrust exemption -- then huddling behind closed doors with White House chief of staff Rahm Emanuel and committee chairmen to finalize the bill.

With negotiations set to continue through the week, some Democrats were hoping that health insurers had actually done the overhaul drive a favor by going on the attack in recent days with two reports slamming health legislation in the Senate.

Unlike doctors, health insurers aren't winning any popularity contests. And the rollout of a report commissioned by America's Health Insurance Plans, warning that health care premiums would rise under a Senate health care bill, was seen as ham-handed since the findings were quickly shot down by a range of critics. That undercut similar findings in a different report released Wednesday by the Blue Cross and Blue Shield Association.

Blue Cross and Blue Shield found that individuals' premiums would rise by 50 percent within five years of enactment of the Senate Finance Committee bill. Blue Cross association officials took pains to detail their methodology and approach as more comprehensive than in the other report. But Democrats had little interest in such distinctions, instead all but using health insurers for target practice.

"They are so anticompetitive. Why? Because they make more money than any other business in America today," Reid contended Wednesday at a Senate Judiciary Committee hearing. The topic was repealing an antitrust exemption that's been in place since the mid-1940s, when it was thought insurance regulation was best left to states.

Reid went on to gripe about "the barrage of paid advertising the insurance industry is doing now to prevent a health care bill from passing."

Robert Zirkelbach, spokesman for America's Health Insurance Plans, called the antitrust issue "a political ploy designed to distract attention away from the real issue of rising health care costs."

White House spokesman Dan Pfeiffer said later that aside from congressional Republicans, "there has not been a vocal opponent to this point" prior to the release of the insurance industry report.

Pfeiffer spoke on his way into the first formal negotiating session to merge the health care bill passed by the Senate Finance Committee earlier this week with a more liberal version passed in the summer by the Health, Education, Labor and Pensions Committee.

The Finance Committee's 10-year, $829 billion bill would remake the U.S. health care system from top to bottom, for the first time making health insurance a requirement for most Americans, forcing insurance companies to take all comers and providing subsidies to help lower-income people buy coverage.

Numerous knotty issues arise in combining the bills, perhaps foremost whether to allow the government to sell insurance in competition with private companies. The Health committee bill includes such a so-called public plan but the Finance committee bill does not.

Reid wasn't giving hints. Asked Wednesday if he thought it was likely there would be a public plan in his merged bill, he responded: "I'm not betting on health care. 'Likely' is in a game of craps."

The insurance industry may have unwittingly helped the case for public coverage with its report asserting the Finance bill would raise premiums for everyone, since the public option could offer lower-cost care.

But business groups and conservatives remain steadfastly opposed, so public option advocates are getting creative as they maneuver for the 60 votes needed to clear the 100-member Senate. Instead of an all-or-nothing approach, they're testing out possible compromises, such as leaving the decision on a public plan to states, or offering public coverage only as a backstop in areas where one insurer has a lock on the market -- the approach favored by moderate Sen. Olympia Snowe, who has considerable leverage as the lone GOP vote in favor of the health care bill in the Finance Committee.

Looking ahead to negotiations with the House, senators were also thinking about how to reconcile the very different methods the two chambers use to pay for their health bills. The House legislation would raise taxes on high earners, whereas the Senate Finance bill would tax high-value health insurance plans.

Labor unions strongly oppose the insurance plan tax, fearing it would hit their members. The No. 2 Senate Democrat, Dick Durbin of Illinois, said Wednesday that he had similar concerns and that the bill probably will be changed to tax fewer high-cost health plans.

"Of course, that will cost money," Durbin said, adding that he did not know where it would come from.

[Associated Press; By ERICA WERNER]

Associated Press writers Charles Babington and Ricardo Alonso-Zaldivar contributed to this report.

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