Senate Democrats take $849B step toward healthcare reform package

Senate Democrats made a significant stride toward achieving President Barack Obama’s goal of enacting a sweeping overhaul of the healthcare system with a bill that would spend $849 billion over 10 years to reduce the number of uninsured by 31 million people.

Senate Majority Leader Harry Reid (D-Nev.) introduced the bill Wednesday even as he continued to scramble to win over a handful of centrist Democrats who remain uncommitted. But Reid and other Democratic senators declared they had reached a pivotal moment in the debate.

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“We’ve traveled really a long ways to where we are. Tonight begins the last leg of this journey we’ve been on now for some time,” Reid said.

With the House having passed its version of healthcare reform earlier this month, Obama is closer than any president has ever been to signing into law a major healthcare reform bill.

“Today we passed another critical milestone in the health reform effort,” Obama said in a statement.

Democrats invoked the memory of the late Sen. Edward Kennedy (D-Mass.), who called healthcare reform the cause of his life. “I intend to ensure that we do everything we can to fulfill Ted Kennedy’s dream,” said Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-Iowa).

But it will take more than inspiration to achieve success on an issue that has stymied presidents since Teddy Roosevelt.

The healthcare bill, and Reid’s leadership of the effort, will face its biggest test yet Saturday, when the Senate will convene for a rare weekend session to hold a procedural motion on the legislation that stands as the first hurdle to advancing healthcare reform.

Even as Reid addressed the entire Senate Democratic caucus Wednesday evening and boasted about his bill, he could not say he had locked down the 60 votes he needs to ensure success on Saturday.

Centrist Democratic Sens. Mary Landrieu (La.), Blanche Lincoln (Ark.) and Ben Nelson (Neb.) continued to withhold promises to vote with Reid even after the trio sat down with the leader in his Capitol office. Reid received an assist Wednesday from Vice President Biden, Interior Secretary Ken Salazar, a former senator from Colorado, and former Senate Majority Leader Tom Daschle (D-S.D.), the man who would have been Obama’s top healthcare adviser if he had not stepped aside amid controversy over unpaid taxes.

In a statement, Nelson hinted he might vote to advance the bill even if he did not support all of it but stopped short of declaring a position. “In reality, the meaning of the motion to proceed is very simple: It’s a motion to commence debate and an opportunity to make changes,” he said.

Over the course of more than a month, Reid worked through the challenge of melding separate healthcare reform bills passed by the HELP and Finance committees.

It was more than simply a legislative task. Though the two committee’s bills, like the measure passed this month by the House, employ the same basic structure, they emerged from vastly different political contexts. The HELP Committee bill was considerably more liberal in its aims and more expensive in its costs compared to the Finance Committee.

Moreover, Reid had to settle vexing political questions that still threaten to divide his party. To the chagrin of some centrist Democrats, the bill includes a form of the public option prized by liberals and trouble still brewing on explosive issues such as abortion and immigration.

Republicans remain solidly opposed to the Democrats’ bill, despite the majority’s hope they may eventually win the support of Sen. Olympia Snowe (R-Maine).

“While Americans have been clear about their opposition to thousand-page bills for new government programs, it’s now abundantly clear that Democrats haven’t been listening,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “This is yet another trillion-dollar experiment, but it is not what Americans bargained for.”

The bill would bring the rate of legal U.S. residents younger than 65 with insurance to 94 percent by covering 31 million more people via health insurance exchange featuring private coverage and a new government-run public option plan and expanding Medicaid for the poor at a cost of $849 billion.

The health insurance exchanges in the states would take effect in 2014 and states would be permitted to opt out of the public option by passing a law to refuse it. People below 133 percent of the federal poverty level would be eligible for Medicaid. Those between 133 percent and 300 percent of poverty would receive subsidies and people between 133 percent and 400 percent of poverty would enjoy annual caps on premiums and out-of-pocket expenses as a percentage of income.

The bill also includes extensive new insurance regulations, including those that would limit companies’ ability to deny coverage or care, cancel policies for the sick, vary premiums on age, health status, gender and other factors.

Individuals would be required to obtain coverage or face a penalty. Employers with more than 50 workers would have pay a fee if they do not offer affordable coverage and their employees receive federal subsidies to purchase insurance on the exchange.

In addition, the legislation would reduce to federal budget deficit by $127 billion over 10 years, according to Congressional Budget Office (CBO) figures touted by Democrats. Moreover, in the second 20 years after the bill would take effect, deficit-reduction could reach a staggering $650 billion.

To pay for their bill and achieve deficit reduction, Democrats cut Medicare spending on payments to medical providers by more than $400 billion, in part by establish new payments systems designed to promote efficiency.

The bill also would raise $371.9 billion in new taxes over 10 years, according to the Joint Committee on Taxation.

The bulk of those new revenues -- $149.1 billion -- would come from a 40 percent excise tax on the value of health insurance plans above $8,500 for individuals and $23,000 for families. Reid scaled back this tax to allay concerns about Democrats and labor unions that it would ensare too many middle-class people.

Reid added a new proposal to the bill that would increase the Medicare payroll tax for high-income earners by 0.5 percent to 1.95 percent of adjusted gross income. This new tax would raise $54 billion and affect individuals making more than $200,000 or families earning more than $250,000.

Pharmaceutical, health insurance and medical device companies would be tapped for a combined $101.9 billion in taxes. The medical device fee was more than halved from an earlier proposal to $19.3 billion to respond to complaints from Democratic Sens. John Kerry (Mass.), Evan Bayh (Ind.) and others.

In addition, the bill includes a plethora of provisions designed to improve the quality and delivery of healthcare services by means such as promoting the use of preventive medicine.