Senators to square off on public insurance plan

[September 25, 2009]  WASHINGTON (AP) -- Advocates for a public insurance plan -- the idea that has generated the most passion in the high-decibel health care debate -- are pressing for a crucial test vote in the Senate Finance Committee.

Democratic Sens. Jay Rockefeller of West Virginia and Chuck Schumer of New York said Thursday they want a full debate on whether the government should create a health plan to compete with private insurers and sign up middle-class workers and their families. Up to now, the government has covered the elderly and the poor.

Rockefeller and Schumer had hoped their moment would come Friday, but with the committee moving slowly through hundreds of amendments to the sweeping legislation, the public plan debate was pushed off until next week.

The public option continues to enjoy broad support in opinion polls. But Finance Committee Chairman Max Baucus, D-Mont., pointedly omitted it from the far-reaching proposal he put before the panel this week, saying he doesn't think it can pass the Senate.

Liberals are eager to prove him wrong. Regardless of how the showdown goes, the battle is expected to continue on the Senate floor.

"Even though the public plan may be an underdog in the Senate Finance Committee, don't count it out," Schumer said. "It's going to be a fight that goes all the way down to the wire."

Many Democrats see the government plan as way to force accountability on what Rockefeller called a "rapacious insurance industry." Conservatives see it as a step inevitably leading to a government takeover -- Medicare for all.

The Finance Committee is seen as a key testing ground because it is dominated by moderates and conservatives, generally reflecting the makeup of the Senate.

Rockefeller and Schumer plan to offer slightly different versions of a public plan, aides said. Under Rockefeller's version, the government would set payment levels for hospitals and doctors. Schumer wants negotiated payment rates, similar to what private insurers use.

Baucus has proposed setting up nonprofit co-ops as an alternative to a government plan, an idea that liberals dismiss as ineffectual. No Republican has voiced support for a public plan, although Sen. Olympia Snowe of Maine says using the threat of government competition could be a good strategy to force insurers to keep the cost of premiums down.

The public plan also will be one of the top items on the agenda in the House, where Speaker Nancy Pelosi, D-Calif., has scheduled a three-hour leadership meeting Friday morning to try to resolve differences among Democrats.

Democratic leaders are groping for consensus as they work to merge health overhaul bills passed by three separate House committees into a single piece of legislation to bring to the floor. They hope to finish by next week but plenty of issues are unresolved, ranging from restrictions on abortion funding and whether to strengthen measures to prevent illegal immigrants from getting government subsidies, to the shape of the public plan and how to pay for the bill.

Pelosi has made clear that her preference on the public plan is to structure it so that payment rates to doctors, hospitals and other providers are linked to Medicare rates. "It saves the most money," she told reporters Thursday.

But moderate Democrats prefer a different structure, one that would allow the health and human services secretary to negotiate payment rates with providers. They say Medicare rates are way too low and basing a public plan on those rates would result in underpayments to hospitals and providers in their districts that are already getting squeezed.

The Finance Committee spent much of the day Thursday focusing on how seniors would fare in a revamped health care system.

Democrats agonized over how to soothe worried seniors but decided one idea was too risky because it could antagonize the powerful drug industry whose support is critically needed for President Barack Obama's broader overhaul.

Thanks to Medicare, virtually all seniors have reliable insurance coverage -- and most are happy with it. But with Democrats planning to finance an overhaul by cutting $500 billion from Medicare and Medicaid, many seniors are worried their benefits will be devalued. Republicans have seized on the issue, forcing Democrats to scramble.

The Finance Committee on Thursday defeated a Democratic amendment that would have gradually closed the coverage gap in the Medicare drug benefit at the expense of drug makers. Nonetheless, another proposal to shield seniors in Medicare private insurance plans from benefit cuts remained alive.

The committee voted 13-10 to reject an amendment by Sen. Bill Nelson, D-Fla., that required drug makers to rebate $106 billion over 10 years to the government for medications used by low-income Medicare beneficiaries.

Three Democrats, Bob Menendez of New Jersey, Tom Carper of Delaware and Baucus, joined Republicans in voting against the proposal. Menendez and Carper warned that the amendment could undermine support for Obama's push to cover the uninsured.

[Associated Press; By RICARDO ALONSO-ZALDIVAR]

Associated Press writer Erica Werner contributed to this report.

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