HEALTH CARE: Senate OK's health care bill in victory for Obama

WASHINGTON (AP) - In an epic struggle settled at dawn, the Democratic-controlled Senate passed health care legislation Thursday, a triumph for President Barack Obama that clears the way for compromise talks with the House on a bill to reduce the ranks of the uninsured and rein in the insurance industry.

The vote was 60-39, strictly along party lines, one day after Democrats succeeded in crushing a filibuster by Republicans eager - yet unable - to inflict a year-end political defeat on the White House.

At the White House, Obama called the vote historic, and said because of it, "we are incredibly close to making health insurance reform a reality in this country. Our challenge now is to finish the job."

Democrats, led by Majority Leader Harry Reid of Nevada, said they would, by early in the new year. Even before they held a celebratory news conference, Speaker Nancy Pelosi issued a statement pledging, "We will soon produce a final bill that is founded on the core principles of health insurance reform: affordability for the middle class, security for our seniors, responsibility to our children by reducing the deficit, and accountability for the insurance industry."

The House passed its bill in November, and officials said it was likely to be February before the two sides can sort out their differences over issues as diverse as government's role in a remade health care system, coverage for abortion and federal subsidies for lower and middle-income families who would be required to purchase insurance.

Senate Republican attacked the bill to the end, and citing public opinion polls, said they would use it as an issue in the 2010 congressional elections. "This debate was supposed to produce a bill that reformed health care in America. Instead, we're left with party-line votes in the middle of the night, a couple of sweetheart deals to get it over the finish line, and a public that's outraged," said the Republican leader, Sen. Mitch McConnell, R-Ky.

The Senate vote unfolded as the sun rose over the Capitol on the day before Christmas, and marked the culmination of a battle that lasted months and included failed bipartisan negotiations, a last-minute flurry of Democratic dealmaking to lock in 60 votes and a highly partisan debate that held lawmakers in session a near-record 25 consecutive days.

For the third time since Sunday night, Sen. Robert C. Byrd of West Virginia, 92, was wheeled into the Senate so he could cast his vote. Sen. Jim Bunning, R-Ky., did not vote.

For Democrats there was an air of bittersweet celebration, underscored by the presence of Vicki Kennedy in the visitor's gallery that overlooks the Senate floor. Her husband, the late Sen. Edward M. Kennedy of Massachusetts, died in August after a career spent working relentlessly for universal health care.

"With Sen. Ted Kennedy's booming voice in our ears, with his passion in our hearts, we say, as he said: The work goes on, the cause endures," said Reid, echoing words Kennedy uttered in his most famous speech.

Beginning in 2014, the Senate bill would establish insurance exchanges where consumers could shop for private coverage sold under federal guidelines. Most Americans would be required to purchase insurance or face penalties, and hundreds of billions of dollars in federal subsidies would be available to families up to incomes of about $88,000 a year. Insurance companies would be banned from denying benefits or charging higher fees on the basis of pre-existing medical conditions. That provision would take effect in 2013 in the House version.

The Congressional Budget Office estimates the Senate measure would extend coverage to about 31 million Americans who lack it, while cutting federal deficits by $130 billion over a decade and possibly much more in the following 10 years. Premiums would rise for some, but fall for many others, particularly when the effects of federal subsidies are factored in, the agency says.

Literally hundreds of issues remain to be settled in the two bills, a House measure that ran to 1,990 pages and a Senate version of 2,074, not counting 383 pages of revisions that Reid unveiled over the weekend.

To finance extended coverage, the House bill relies on an income tax surcharge on incomes over $500,000 for individuals and $1 million for couples, a provision the Senate omitted. Its bill includes higher Medicare payroll taxes on high wage-earners and a new tax on high-cost insurance policies that labor unions generally oppose.

Medicaid, the federal-state health care program for the poor, is expanded in both bills, but the House provision includes many more people. The House legislation also requires large employers to provide insurance to their workers or pay a fine. There is no such mandate in the Senate bill, although companies would face penalties if any of their uninsured employees qualified for federal subsidies to purchase their own insurance.

The House-passed bill is estimated to extend coverage to more individuals than the Senate measure, 36 million over a decade as opposed to 31 million.

It also provides more generous subsidies, on average, according to calculations by the Congressional Budget Office. The agency says the approximate average subsidy in 2019 under the House will would be $6,800 a year; for the Senate bill, it is $5,600. Those differences reflect one of the biggest contrasts between the two bills - the $574 billion the House bill provides for subsidies over a decade, as opposed to $336 billion under the Senate measure.

Both bills also rely on hundreds of billions of dollars in cuts in future payments to doctors, hospitals and others who care for Medicare patients, with the largest reduction falling on insurance companies who provide a private alternative to traditional Medicare.

Over 10 years, the House bill closes a gap in coverage under Medicare prescription drug benefits popularly known as the doughnut hole. The Senate bill reduces but does not eliminate that interruption in coverage, although Reid has pledged to defer to the House, a pledge made to secure AARP's endorsement for the bill.

Already, the liberals who dominate the Democratic caucuses in the House and Senate have shown a willingness to yield on key issues to moderates whose votes are essential to passage of legislation, and more of the same will be needed for a final compromise to emerge.

For her part, Pelosi, D-Calif., has already signaled she will not insist on a government-run insurance option in a final bill. The House bill has one, a provision its liberal supporters said was designed to put pressure on the insurance companies to hold down premium prices.

Democratic moderates insisted no such plan make it into the Senate bill, which calls instead for national plans overseen by the same office that manages health coverage for federal employees and members of Congress. Those plans would be privately owned, but one of them would have to be operated on a nonprofit basis, as many Blue Cross Blue Shield plans are now.

A dispute over abortion clouded the final days of debate in the House, and again in the Senate.

In both cases, liberals were forced to yield more than they wanted to opponents of the procedures who insist that no federal funds be allowed to pay for abortion services. The two bills have different approaches to the subject, and that issue, once again, is likely to be one of the last resolved.

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The bill is H.R. 3590