No 'robust' public option in House healthcare reform bill

Speaker Nancy Pelosi unveiled the House's healthcare reform bill Thursday. She had to compromise with conservative Democrats on the public option in order to win their votes.

Joshua Roberts/Reuters
Speaker of the House Nancy Pelosi unveils the House Democrat's Healthcare plan on Capitol Hill in Washington on Thursday.

House Speaker Nancy Pelosi introduced a $894 billion healthcare bill Wednesday that appears to have enough Democratic support to pass.

The deal followed weeks of intense negotiation among strong factions within the Democratic majority, Democratic leaders, and the White House. In the end, compromises to limit the scope of a government run public option to compete with private insurers shifted momentum on the bill.

Lawmakers now have at least 72 hours to peruse the 1,991-page bill. It requires all Americans to obtain health insurance and adds some 36 million to the ranks of the insured. It expands Medicaid for the poor, and it offers subsidies to help middle-income Americans pay for private insurance.

The $894 billion cost – which is spread over 10 years – is paid for, in part, by what Speaker Pelosi calls “millionaire tax” – a tax on individuals with adjusted gross incomes more than $500,000, or families with more than $1 million.

No ‘robust’ public option

Pelosi and liberal Democrats had originally favored what they termed a “robust” public option. This would have paid hospitals and other healthcare providers at Medicare rates plus a 5 percent increase.

But rural Democrats said that those payments would be too low, and hospitals in their districts could not have survived on them.

“The issue for me was whether a public plan option would pay providers fairly,” says Rep. Earl Pomeroy (D) of North Dakota, a former insurance commissioner. “Using Medicare as the payment rate was not sufficient for North Dakota, we’re so badly underpaid under Medicare.”

He and other members of the conservative Blue Dog caucus were wooed by Pelosi’s willingness to accept that the rate should be negotiated by the secretary of the Department of Health and Human Services. It was clear that the Speaker could not find the 218 votes needed to sustain the robust option.

Rep. Anthony Weiner (D) of New York was pleased at the progress, but he backed a stronger public option. “Make no mistake about it, we made concessions to people who wanted less competition, less savings, and basically a weaker version of what 218 members think is a good thing,” he says.

Some progressive Democrats, including Congressman Weiner, want to have a floor vote to record support for a robust public option.

Taking on the insurers

The House plan would challenge elements of the deal worked out between President Obama and key corporate stakeholders.

At a May 11 White House meeting, healthcare providers agreed to find $2 trillion in savings over 10 years to help lower healthcare costs. The Pharmaceutical Research and Manufacturers of America pledged $80 billion to that cause, with the understanding that, in return, Congress would not touch a law that bans Medicare from bargaining for lower drug prices from the drug companies.

The Senate Finance panel respected that unwritten deal. But the House plan does not. It calls asks for the group to provide more than $80 billion in savings, and it also would allow Medicare to negotiate lower drug prices.

In addition, it requires that insurance companies spend 85 percent of their earnings on care for the sick, rather than administrative costs or profit.

“If we passed a bill that the pharmaceutical companies aren’t complaining about, we probably didn’t do something right,” says Weiner.

No House Republicans are likely to vote for the plan.

“I don’t believe Democrats have the votes,” says Rep. Adam Putnam (R) of Florida. “They’re raising stakes on themselves to try to create an impression in inevitability, but they have misread the appetite for change and have overreached.”


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