Update on Health Reform: Senate Finance Committee Vote on Health Reform Delayed, Obstacles to Passage Continue

The Senate Finance Committee completed seven days of debate and votes on amendments to its health-care overhaul bill last week, rejecting a government-run insurance plan but adopting a bipartisan plan that would ease penalties for lower-income Americans who cannot afford to comply with the bill’s coverage mandates.

A final vote on the Committee bill was expected early this week. However, Finance Committee Chairman Max Baucus (D-MT) has announced that the Committee will delay its vote on the measure - and likely the bill’s move to the Senate floor - as members await a cost estimate by the Congressional Budget Office.

The Senate Finance Committee action means that all five congressional committees with jurisdiction over health care have now marked up legislation. The next step in the Senate process is that the Finance version will be blended with a bill (S 1679) approved by the Senate Health, Education, Labor, and Pensions Committee on July 15. Three House committees - Energy and Commerce, Ways and Means, and Education and Labor - marked up the House version of the legislation (HR 3200) in July.

“Public Option” a Major Obstacle to Passage

Throughout the debate on health reform, the most contentious question has been whether the legislation should include a government-run “public option” to compete against private insurers. Liberals favor the public option; conservatives and most moderates do not.

On September 29, the Finance Committee voted down two amendments that would have added a public option to its bill.

The first, from Senator John D. Rockefeller (D-WV), would have set up a public option that would base its payment rates on those of Medicare for the first two years. It was defeated by a vote of 8-15, with five of the panel’s 13 Democrats opposed.

Senator Charles Schumer (D-NY) offered a related proposal that, instead of basing payment rates on those of Medicare for the first two years, would have required the public option to negotiate rates with doctors, hospitals, and other health-care providers from the outset. Schumer’s proposal failed by a vote of 10-13.

As Senate Democratic leaders continue to work with the White House, which strongly supports a public option, to combine bills by the Finance Committee and the Health, Education, Labor, and Pensions (HELP) Committee, the major dilemma they have is whether to include a government-run “public option” in the merged bill and what form it would take.

Uncertain Schedule for Bill

Once the Finance Committee approves the draft legislation (which is expected), it is unclear how soon afterward the bill will go to the Senate floor for a vote. 

The first obstacle for Senate passage will be the most difficult. To invoke what is called “cloture,” or limiting debate on the bill and blocking a Republican filibuster, Democrats will need 60 votes, which means they either need every member of their caucus to vote the same way or they need to peel off a few Republicans. 

It is not clear if Senate leadership will first try to introduce a bill with a public option, understanding it might fail, to give Democrats the opportunity to blame Republicans for blocking it, or if public option language would be inserted by an amendment once the bill is on the floor.

Obtaining 60 votes will be tricky. The Democrats count just 60 votes if they can obtain support from all members of their caucus and the two Independents in the Senate. Finance Committee Chairman Baucus insists that there are not 60 votes because some moderate Senate Democrats such as Evan Bayh (D-IN), Mary Landrieu (D-LA), and Ben Nelson (D-NE) oppose the public option.

If the Senate Democratic leadership finds it does not, in fact, have 60 votes, they may decide to use the Budget Reconciliation process to move the health reform legislation through the Senate. Reconciliation requires only a simple majority to pass, but it would limit provisions to only those issues that directly affect federal spending and revenues. Some provisions, such as the insurance exchange, would not be deemed relevant to reconciliation and would have to be dropped from the bill.

Meanwhile, in the House, Speaker Nancy Pelosi (D-CA) said last week that she and other Democratic leaders continue to debate details of the government-run insurance plan the legislation would create, as well as how to cut the cost to $900 billion over 10 years, the level President Obama has demanded.

House Democratic leaders, who are struggling to combine the three committee versions, said they have no deadline for holding a floor vote on health reform. While factions within their caucus exist over the public option, cost of the legislation, and taxes on the wealthy, there is agreement even with the Republicans on a growing list of issues, such as the need to cut costs, portability of coverage, consumer protection, improvements in health-care delivery, and language to prevent the denial of health insurance based on pre-existing conditions.

Below are links to additional information concerning health reform:

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