http://online.wsj.com/article/SB125371567686934179.html
By GREG HITT and JANET ADAMY
WASHINGTON -- Democrats on the Senate Finance Committee closed ranks Wednesday in the face of Republican attacks over proposed Medicare cuts at the heart of health-care legislation.
The second day of debate in the influential panel underscored the political difficulties ahead for the health bill, which would wring big savings from Medicare to help finance President Barack Obama's goal of expanding health coverage to tens of millions of uninsured Americans.
Sen. Baucus presides over a session on health-care overhaul legislation on Tuesday.
"Medicare shouldn't be the piggy bank," Sen. Jon Kyl (R., Ariz.) said during a debate that featured frequent partisan sparring between senators. "The reduced costs fund a new entitlement," Mr. Kyl said. "They don't help seniors who rely on Medicare."
In mostly party-line votes, Democrats rejected a series of amendments from Republicans to trim the Medicare cuts, including a proposal by Mr. Kyl to wipe them out entirely.
The sweeping bill would cut federal health spending by more than $400 billion over 10 years, most of it by reducing payments to a range of health providers under Medicare, the health program for the elderly. The money saved would go to expand eligibility for Medicaid, the federal-state heath program for the poor, and create new tax subsidies to help low- and middle-income families purchase insurance.
The backbone of the bill's proposed Medicare cuts is a measure that would squeeze $124 billion over a decade out of Medicare Advantage, a program for seniors getting health benefits through a private insurer rather than directly from the government.
The bill would force the insurers to bid competitively to run the plans, a change from current law. Most Democrats contend that the government overpays private insurers to administer the plans. On a 14-9 vote, the committee rejected an amendment by Sen. Orrin Hatch (R., Utah) that would have weakened the proposed changes to Medicare Advantage in the bill.
Notably, Sen. Olympia Snowe (R., Maine) sided with Democrats on the issue. She also sided with Democrats to defeat a Republican amendment that would have stripped from the bill a proposal to empower a special commission to recommend, and enforce, certain Medicare cuts. Democrats hold out hope that the Sen. Snowe will eventually support the broader bill.
Democrats said the spending cuts would eliminate Medicare waste and wouldn't erode the benefits that seniors receive. Senate Finance Committee Chairman Max Baucus (D., Mont.) said "not one red cent" of the proposed savings would come from benefits. He and other Democrats argued that Medicare is on a path to fiscal insolvency, perhaps as soon as 2017, and that paring spending would strengthen it for the future.
"If you want Medicare to go broke, just don't deal with that reality," Sen. Kent Conrad (D., N.D.) told the panel.
The struggle over the issue dramatized the political risks for the president's party a little more than a year from midterm elections in which control of Congress will be up for grabs.
The latest Wall Street Journal/NBC News poll revealed deep skepticism among Americans over the age of 65, a key voting bloc, about the health initiative, which has yet to reach the floor of either the House or the Senate. The poll found that seniors disapproved of the president's handling of the issue, 49% to 45%. The survey also found that 15% of seniors believe the president's plan would result in better health care, while 37% feared it would get worse.
[Growing Problem chart]
Vice President Joe Biden held a forum with senior citizens Wednesday in Silver Spring, Md., where he highlighted a new report by the Department of Health and Human Services showing that the health overhaul will cut seniors' prescription drug costs and waive fees for preventive services like colonoscopies.
"We will protect seniors -- not burden them with out-of-pocket costs," Mr. Biden said.
The broader legislation, estimated by the nonpartisan Congressional Budget Office to cost $774 billion over 10 years, would create a new national "exchange," through which individuals and small businesses could purchase insurance, and would establish a network of nonprofit health cooperatives to provide low-cost competition with private insurers.
The bill would require nearly all individuals to purchase insurance but would create new assistance for the needy to meet the mandate.
Beyond the spending cuts, the bill would raise $348.8 billion in new revenue, including a new levy on insurance companies that sell high-value health policies.
Write to Greg Hitt at greg.hitt@wsj.com and Janet Adamy at janet.adamy@wsj.com
Printed in The Wall Street Journal, page A6
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NOTE: Senator Max Baucus has amended his health plan proposal, see http://www.washingtonpost.com/wp-dyn/content/article/2009/09/22/AR2009092200237_2.html
The amended proposal carries a 10 year cost of approximately $900 billion. Below are excerpts from the link above:
The most significant would sweeten the subsidies for individuals and families with incomes up to four times the government's poverty level - $43,320 for individuals and $88,200 for a family of four. In addition, Baucus called for lower out-of-pocket medical costs for some lower-income families, and recommended making it easier for those who cannot afford the coverage offered by employers to qualify for federal subsidies so they can purchase individual policies.
To hold down costs for older consumers, he also reduced the ability of insurance companies to charge more for coverage on the basis of age, from five times the base rate to four times.
Baucus also decided to reduce the penalty for families who defy a proposed mandate to purchase coverage, from $3,800 to $1,900.
Additionally, he rewrote the bill stating that individuals who currently have coverage against catastrophic medical costs need not purchase more comprehensive insurance.
The revisions would significantly alter a proposed tax on high-cost insurance policies, a measure that has drawn particular opposition from organized labor and liberal Democrats. Baucus said he would exempt from the tax policies sold to "high risk" workers, such as fire fighters.
At the same time, he raised the level of the tax to recoup some of the revenue that would otherwise be lost.
Nearly half the Democrats on the committee had served notice they would attempt to revise the proposed tax, and Baucus' decision there and on the subsidy levels was a bow to political reality as he tries to push his bill through the panel.
According to information distributed by the committee, he also incorporated a half-dozen changes backed by Snowe, on a variety of issues, on issues ranging from small businesses to Medicaid.
