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Universal healthcare coverage appears elusive

With Tuesday's planned Senate committee vote, hospitals and insurance companies fear the key goal will slip further away. Democrats insist they'll keep pushing for it.

October 13, 2009|Noam N. Levey

WASHINGTON — As a key Senate committee prepares today to pass its plan to overhaul the nation's healthcare system, senior Democrats are acknowledging that it may be impossible to provide coverage to all Americans -- a central goal of President Obama and his congressional allies.

That is fueling growing alarm among hospitals and insurance companies, which have made universal coverage a condition of their support.

On Monday, the insurance industry stepped up its warnings that leaving a large segment of the population without coverage would accelerate a rise in premiums for everyone else. The bill that has emerged from the Senate Finance Committee would leave about 17 million people uninsured.

But leading Democrats are standing behind the committee's series of compromises that are designed to control the cost of government subsidies for consumers forced to buy insurance.

They say the approach -- which would keep the cost of the legislation under its 10-year target of $900 billion -- is necessary to attract the moderate and conservative votes vital for passage.

"I'd like more [insurance coverage]," said Sen. Christopher J. Dodd of Connecticut, a Democrat who over the summer shepherded a version of the bill proposed by the late Sen. Edward M. Kennedy (D-Mass.) through the Senate health committee.

"But that's a pretty good start. . . . Sen. Kennedy was a great advocate of the idea that you do the best that you can."

The bill that comes out of the finance committee must be reconciled with the health panel's version before the legislation can be brought to the full chamber for a vote. A similar effort is underway in the House.

Rep. Henry A. Waxman (D-Beverly Hills), the House Energy and Commerce Committee chairman and a leading author of the chamber's healthcare bill, also said that compromises might be necessary over how many Americans and legal immigrants would be covered. There are 40 million in the country without insurance, excluding illegal immigrants.

"The effort to reform healthcare is a balancing act," Waxman said Monday. "And we are limited in how much money we can spend."

Sen. Charles E. Schumer (D-N.Y.), a leading member of the finance committee, said Senate Democrats shared the concern about federal spending.

"We're focused on the budget number," he said. "That's the most important number right now."

Liberal lawmakers and consumer groups long have nurtured dreams of covering all Americans. More recently, universal coverage emerged as a key goal of insurance companies and healthcare providers, who would gain tens of millions of customers. And hospitals would benefit as the number of uninsured patients receiving free care diminished.

Industry leaders and healthcare experts also consider universal coverage as crucial to making other changes to the healthcare system -- such as restraining the cost of premiums and prohibiting insurers from denying coverage for preexisting medical conditions.

"The larger the insurance pool, the better able you are to spread risk," said Peter Harbage, a healthcare consultant who has advised Democrats in Washington. "If you have universal coverage, you will have the most efficient system and best achieve affordable coverage."

Congressional Democrats have agreed on a series of steps to expand coverage, including a requirement that most Americans get insurance, and billions of dollars in federal subsidies to help low- and moderate-income people pay their premiums.

But under pressure to keep the 10-year cost under $900 billion, the Senate Finance Committee bill -- which many consider a kind of centrist template -- limited those subsidies.

The legislation being voted on today includes $463 billion in subsidies over the next decade and would result in 94% of Americans having insurance coverage, according to an estimate by the nonpartisan Congressional Budget Office.

That is substantially less than the $773 billion in subsidies that House Democrats have proposed in their healthcare bill. The CBO estimated that the House bill would achieve near-universal coverage, or cover about 97% of those eligible.

About 83% of those eligible currently have health insurance.

In addition to devoting less money to subsidies, Senate Finance Committee lawmakers decided to scale back the fines on those who do not buy insurance. The current bill would phase in the fines over five years and limit them to $750 a person or $1,500 a family.

"They got locked in to spending less than $900 billion," said Len Nichols, an economist who heads the healthcare program for the centrist New America Foundation. "That has required trade-offs. . . . Now they are in a situation where they have to do the best they can."

That, however, does not sit well with advocacy groups across the spectrum.

"From a moral point of view, we should do better," AARP legislative director John Rother said Monday. The senior citizens' group has been a leading advocate of expanding coverage.

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