Published on Tuesday, September 29, 2009 by the Associated Press

Senate Finance Panel Rejects Govt Insurance Option

by David Espo

WASHINGTON - Liberal Democrats failed Tuesday to inject a government-run insurance option into sweeping health care legislation taking shape in the Senate Finance Committee, despite widespread accusations that private insurers routinely deny coverage in pursuit of higher profits.

The 15-8 rejection marked a victory for Sen. Max Baucus, D-Mont., the committee chairman, who is hoping to push his middle-of-the-road measure through the panel by week's end. It also kept alive the possibility that at least one Republican may yet swing behind the overhaul, a key goal of both Baucus and the White House.

An audience member hold up a small sign with the words 'Public Option' as President Barack Obama spoke at a rally on health care reform, Thursday, Sept. 17, 2009, at the Comcast Center at the University of Maryland in College Park, Md. (AP Photo/Charles Dharapak)

"My job is to put together a bill that gets to 60 votes" in the full Senate, the Montana Democrat said shortly before he joined a majority on the committee in opposing the provision. "No one shows me how to get to 60 votes with a public option," the term used to describe a new government role in health care. It takes 60 votes in the 100-member Senate to overcome delaying actions that Republicans may attempt.

Undeterred, supporters of a new role for government in U.S. health coverage immediately launched a new attempt to prevail.

The maneuvering occurred as the committee plunged into a second week of public debate on legislation that generally adheres to conditions that President Barack Obama has called for. The bill includes numerous new consumer protections, including a ban on companies denying insurance on the basis of pre-existing conditions. At the same time it provides government subsidies to help lower-income Americans afford insurance that is currently beyond their means. It also includes steps that supporters say will begin to slow the growth in health care costs nationwide.

After weeks of delay, both the House and Senate appear on track to vote on different versions of health care legislation in October. Passage in both houses would set the stage for a compromise to be voted on deeper into the fall.

Inside the Senate Finance Committee, the first effort to remake a key portion of the bill came from Sen. Jay Rockefeller, D-W. Va., who said his proposal was far from the government takeover of health care that critics portray. "It's not. It's optional," he said, adding it was designed to offer competition and a lower-priced, reliable choice for consumers shopping for coverage.

Rockefeller assailed the insurance industry in withering terms. "I hate to use the word 'rapacious,'" he said - but quickly added it was warranted. He said omission of a government option from the measure was a virtual invitation to insurance companies to continue placing profits over people, adding they would raise their premiums substantially once the legislation went into effect.

All 10 Republicans on the committee voted against the proposal to allow the government to compete directly with insurance companies, Sen. Olympia Snowe among them. Democrats are hoping the Maine lawmaker will eventually break ranks with her party and support the legislation.

Also opposed were Baucus and fellow Democrats Kent Conrad of North Dakota, Blanche Lincoln of Arkansas, Bill Nelson of Florida and Tom Carper of Delaware.

Sen. Chuck Schumer, D-N.Y., backed an alternative approach that he said would introduce more competition into the insurance market nationwide. His version differed from Rockefeller's chiefly in that it would have allowed for the government to negotiate payments with doctors, hospitals and other health care providers for an initial two-year period rather than pay them at the same rates as under Medicare.

Republicans countered that the proposals would lead to the demise of the private insurance industry and result in a system that is completely run by the government.

"Washington is not the answer," declared Sen. Orrin Hatch, R-Utah.

Sen. Charles Grassley, R-Iowa, cited private studies - one by the conservative Heritage Foundation, the other by the Lewin Group, owned by United HealthCare - saying millions would be pushed out of private insurance as the government held fees to doctors at artificially low levels. He said the result would be a violation of Obama's pledge that consumers would be able to keep their current insurance if they wanted once the legislation went into effect.

While Baucus voted against the proposal, he was at pains to counter Rockefeller's charge that the legislation increased subsidies that would go to insurance companies without dictating changes in past practices.

He said the legislation raises taxes on insurers, bans the practice of denying coverage because of pre-existing medical conditions and limits the extra premiums that can be charged on the basis of age.

Associated Press writer Erica Werner in Washington contributed to this story.

© 2009 Associated Press