K Street preps for healthcare Round 2

Somewhere in the middle, healthcare lobbyists are hoping their voices are heard.

The renewed legislative fight comes after a month of town hall meetings, sinking poll numbers for both Obama and the Democrats’ healthcare plans, increasingly entrenched Republican opposition and an apparently deepening divide between centrist and liberal Democrats.

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From the sidelines over the recess, powerful interest groups that have spent millions of dollars promoting healthcare reform (as defined by the groups) and more than a year preparing for the legislative endgame watched as the debate shifted.

Lobbying organizations are primarily concerned with trying to shape the legislation to their benefit in policy areas that tend to lack the emotional heat on display over the recess.

“The biggest takeaway from the August recess is that we did get more polarized than ever,” said Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA). “There’s a real restlessness about the future of the country.”

David Certner, the AARP’s director of legislative policy, said that the heated public arguments over “death panels” and whether Medicare benefits would be cut to pay for reform — which he described as “issues that aren’t really issues” — took attention away from what the seniors’ lobby thinks are the critical problems at hand.

“To the extent that those issues are getting in the way,” Certner said, “it does put more speed bumps in the road.”

“I really hope that this hasn’t tainted things [too] bad to get healthcare reform,” said Amanda Austin, director of federal public policy for the National Federation of Independent Business (NFIB).

As policymakers endured the public wrath during the recess, the White House and Democrats deflected criticism at the health insurance industry in a move designed to reframe the debate.

“August recess was a missed opportunity. So much discussion was focused on whether or not to create a government-run insurance program. That was a distraction,” said Robert Zirkelbach, the spokesman for America’s Health Insurance Plans (AHIP).

What all of this means for the actual legislation is unclear, officials at these key groups said.

“I don’t know how to assess the political implications of the August recess,” said Chip Kahn, president of the Federation of American Hospitals. But, he emphasized, “The cards in terms of policies on the table really haven’t changed.”

Certner agreed: “We don’t think that that’s changed much.”

Healthcare reform has become wrapped up in a pitched political battle far bigger than the issue itself, but the most contentious aspects remain the same.

At the top of that list is whether to create a government-run “public option” insurance plan that would compete for business with private plans. Nearly all healthcare industry groups oppose the public option even if they support other components of the bills.

The administration is hoping to spark some momentum this week when Obama addresses a joint session of Congress on Wednesday, and administration officials say he will lay out more details than before.

Perhaps just as important, Senate Finance Committee Chairman Max Baucus (D-Mont.) is circulating a proposed bill that stands as the last, best chance of a bipartisan deal and is pushing his “Gang of Six” negotiators to take a stand, one way or another.

Baucus’s bill will not include the public option, in contrast to the House measure and legislation already approved by the Senate Health, Education, Labor and Pensions Committee.

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With final action — or a failure to act — just over the horizon, the high-minded optimism and the generic pro-reform messages espoused early this year have been replaced with trepidation and a hardening of positions on specific issues.

“It’s at a point where the question has to be called — and that’s what you’re seeing,” said Kahn.

Healthcare lobbyists have always viewed Baucus’s committee as the most likely source for legislation they can support. Though the American Medical Association endorsed a more liberal House bill and groups such as Kahn’s made favorable assessments of that legislation, others strongly opposed it, including AHIP, PhRMA and the NFIB.

“Finance is our last hope here — and let’s see how the president steers it,” Austin said. “If it looks anything like the House bill, we’re scared to death.”