Health care bill clears hurdle; Reid to mold version that goes to full Senate

WASHINGTON (AP) - Historic legislation to expand U.S. health care and control costs won its first Republican supporter Tuesday and cleared a key Senate hurdle, a double-barreled triumph that propelled President Barack Obama's signature issue toward votes this fall in both houses of Congress.

"When history calls, history calls," said Maine Republican Olympia Snowe, whose declaration of support ended weeks of suspense and provided the only drama of a 14-9 vote in the Senate Finance Committee. With her decision, the 62-year-old lawmaker bucked her own leadership on the most high-profile issue of the year in Congress, and gave the drive to remake health care at least a hint of the bipartisanship that Obama seeks.

At the White House, Obama called the events "a critical milestone" toward remaking the nation's health care system. He praised Snowe as well as Sen. Max Baucus, D-Mont., chairman of the committee, and declared, "We are going to get this done."

There were fresh challenges. Within minutes of the vote, labor unions and large business organizations both demanded changes in the bill, which was an attempt at a middle-of-the-road measure fashioned by the committee under Baucus' leadership.

Still, nearly nine months after the president pledged in his Inaugural Address to tackle health care, legislation to expand coverage to millions who lack it has now advanced further than President Bill Clinton's ill-fated effort more than a decade ago - or any other attempt in more than a generation.

The next move in the Senate is up to Majority Leader Harry Reid, whose office said the full Senate would begin debate on the issue the week of Oct. 26.

Nominally, Reid must first blend the bill that cleared during the day with a version that passed earlier in the Health, Education, Labor and Pensions Committee. But in reality, the majority leader - with the participation of the White House - has a virtual free hand in fashioning a measure to wind up gaining the 60 votes needed to overcome a threatened Republican filibuster.

"The bottom line here is we need a final bill, a merged bill, that gets 60 votes," Baucus said. "Our goal is to pass health care reform not just talk about it."

Reid's most politically sensitive decision revolves around proposals for the federal government to sell insurance in competition with private industry. The Senate bill approved in committee during the day omits the provision, while the one passed earlier includes it and many House Democrats support it as well.

In general, bills moving toward floor votes in both houses would require most Americans to purchase insurance, provide federal subsidies to help those of lower incomes afford coverage and give small businesses help in defraying the cost of coverage for their workers.

The measures would bar insurance companies from denying coverage on the basis of pre-existing medical conditions, and for the first time limit their ability to charge higher premiums on the basis of age or family size. Expanded coverage would be paid for by cutting hundreds of billions of dollars from future Medicare payments to health care providers. Each house also envisions higher taxes - an income tax surcharge on million-dollar wage-earners in the case of the House, and a new excise levy on insurance companies selling high-cost policies in the case of the Senate Finance Committee bill.

Apart from Snowe, Republicans on the committee cited higher taxes, a greater federal role in the insurance industry and other concerns as they lined up to oppose the bill.

Sen. Charles Grassley, R-Iowa, said the legislation would place the nation on a "slippery slope to more and more government control of health care."

Sen. Mike Crapo, R-Idaho, elicited testimony earlier from the head of the Congressional Budget Committee that a substantial portion of the bill's tax increases would fall on groups Obama has vowed would be protected: individuals making $200,000 or less and couples below $250,000.

Snowe, too, said there were problems with the bill, but on balance, the risks of doing nothing were too great.

"We should also contemplate the decades of inaction that have brought us to this crossroads," she said. "The status quo approach has produced one glaring common denominator, that is that we have a problem that is growing worse, not better."

The vote made the Finance Committee the last of five in Congress to complete its work on health care. It also marked a personal triumph for Baucus, who weathered criticism from fellow Democrats after his attempt at bipartisanship cratered earlier this fall after months of exhaustive effort. In the end, disgruntled liberals on the panel, including Jay Rockefeller of West Virginia and Ron Wyden of Oregon, went along in hopes the bill eventually would be reshaped more to their liking.

Across the Capitol, Speaker Nancy Pelosi and her lieutenants have been at work for weeks trying to blend legislation approved by three House committees. The eventual result is certain to include a government option, but the details of the plan have split the rank-and-file and leaders have spent days struggling with the issue.

One group favors allowing the government to negotiate with doctors, hospitals and other health care providers for fees to be paid to treat patients who have federal insurance policies, an approach that involves higher costs for the government.

The other, lower-cost approach envisions a fixed payment schedule linked to Medicare. Officials say that alternative was quietly sweetened in recent days for the benefit of hospitals, medical device makers and others to put them on an even plane with doctors.

Apart from the details of the emerging bills, there were signs that the political struggle was intensifying.

Several officials, speaking on condition of anonymity, said business groups were discussing plans to step up their opposition to legislation. The health insurance industry made clear its own unhappiness on Monday when it released a study by the prominent auditing firm, PricewaterhouseCoopers, saying the Finance Committee bill would raise premiums significantly for millions who already have insurance.

The report drew intense criticism from the White House, Democrats in Congress and other advocates of the legislation. By Monday night, the auditing firm appeared to backpedal, issuing a statement acknowledging its report was based only on an analysis of four provisions in the proposed legislation.

Ironically, the insurance industry launched its attack against the version of the legislation that omits the government option - the one provision above all others that insurers oppose. Officials said they were motivated by a provision that would have excused millions from a requirement to have insurance, thus reducing the pool of new customers seeking coverage.

Democrats said that industry representatives had also complained in private conversations about a provision that would have limited insurance companies' ability to write off the cost of any executive salary in excess of $500,000 a year. The committee inserted the provision into the measure at the request of Sen. Blanche Lincoln, D-Ark.