Snowe falls away, leaving Senate Dems without GOP support on healthcare

Senate Democrats are going to have to move forward on healthcare without a single Republican supporter after Sen. Olympia Snowe said Tuesday she could not back the Finance Committee’s bill.

Chairman Max Baucus (D-Mont.) failed to win any Republican backer despite weeks of intense negotiations behind closed doors to strike a deal.

Snowe (Maine), who was one of three Republicans who backed the $787 billion economic stimulus package, was being lobbied heavily by the White House, and some centrists view her refusal to strike a deal with Baucus as troubling. But concerns about how the plan would be paid for prompted her to back away in the hours before its release.

“I do have concerns and I’m not sure they can be addressed before he issues [legislation] tomorrow,” Snowe said.

Faced with the prospect of having to pass legislation without Republican votes, Obama’s chief political adviser David Axelrod met with Senate and House Democrats on Tuesday to stress the importance of party unity on healthcare reform — a message most directly aimed at centrists who now are critical to its passage.

Democrats control 59 seats in the Senate. Without a single Republican vote, they would be forced to advance healthcare using a budgetary maneuver that requires only a simple majority.

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that Democrats are prepared to use budget reconciliation as a last resort.

“We’ve always had a place at the table for Republicans. There’s one there today. We hope it bears fruit,” he said. “If we can’t get the 60 votes we need, then we’ll have no alternative but to use reconciliation.”

Axelrod told senators that passing healthcare reform would give them a boost in the 2010 midterm election, according to a person who attended the meeting.

Axelrod also said that polls showed that public disapproval over Democratic reform proposals — which swelled in June and July — leveled off during the month of August, despite the publicity attracted by conservative protests, said another source in the meeting.

Axelrod’s speech seemed aimed at Democratic centrists who are concerned about the failure to attract Snowe

In August, Obama and Baucus narrowed their focus to winning over Snowe after it became clear that other Republican negotiators voiced sharp criticisms of Democratic proposals during the congressional recess.

A Democratic official with knowledge of those talks said a persistent sticking point has been Snowe’s concerns over how Obama and Baucus want to pay for the bill.

Baucus will introduce his healthcare legislation Wednesday and plans to mark it up in the Finance Committee next week. Democrats hope they can persuade Snowe to support the bill before the committee votes to send it to the Senate floor. Baucus told reporters Tuesday that he does not expect any Republicans to be on board prior to the markup.

“I think there will be Republican support when the bill is reported out, at the very latest,” he said. “It may be earlier there will be a Republican or two that will announce support.”

His effort to woo Republicans, however, has alienated liberals. At least one prominent liberal on his committee, Sen. Jay Rockefeller (D-W.Va.), plans to vote against Baucus’s plan.

“There is no way in its present form that I will vote for it,” Rockefeller said during a conference call.

Obama and Baucus have suggested paying for a big chunk of reform by levying new taxes on high-cost insurance plans. Specifically, Baucus has suggested a 35 percent excise tax on insurance plans that cost single individuals more than $8,000 a year and cost families more than $21,000.

Snowe’s problem with that plan is that it could impose a heavy tax burden on Maine, which has one of the highest average health insurance premiums in the country. A July study by Harvard economist David Cutler found that Maine, on average, has the fourth-most costly insurance premiums in the country, trailing only Connecticut, Delaware and New Hampshire.

Snowe said she is concerned about Baucus’s plans to tax high-cost plans.

“I am, no question, because we are a high-cost state,” said Snowe.

Baucus has set up the tax to phase in slowly for states such as Maine. For the 17 states with the highest-cost premiums, Baucus’s bill would tax insurance plans at a higher threshold than for the rest of the country.

For example, family plans in low-cost states such as Kentucky would be taxed above $21,000 but Massachusetts families wouldn’t see plans under $25,000 taxed.

But this threshold would be pegged to the consumer price index, and because healthcare prices are rising faster than inflation, many Maine families could see unexpected taxes after a decade.

Snowe said she is still trying to understand whether the adjuster provision Baucus set up would do enough to protect Maine families from big tax increases on their health plans.

“That’s something I’m still trying to discern,” she said.

Snowe said she would like more time to review the legislation before deciding to back it. But Democratic leaders have decided that GOP negotiators have been given more than enough time.

Snowe said she is also concerned with whether Baucus’s bill will do enough to make health insurance more affordable. Snowe and Sen. Jeff Bingaman (D-N.M.) have repeatedly pushed fellow negotiators on the Finance panel to increase subsidies for low-income and uninsured Americans.

Snowe has objected to Baucus’s bill for requiring as many as 4 million uninsured Americans to buy health plans without providing them with significant federal subsidies.

Snowe said that lawmakers cannot expect people to comply with a federal mandate to buy health insurance if affordable plans are not available

“The affordability question is crucial,” said Snowe. “It’s a central component, because at the end of the day people have high expectations they will have access to affordable health insurance.”