Congress Passes Final Piece of Healthcare Legislation

Noam N. Levey

Washington DC Bureau

March 25, 2010

After a final surge to overcome Republican opposition, Congressional Democrats Thursday approved the last piece of their health overhaul, sending President Obama a package of changes to the main health bill the president signed Tuesday.

The so-called reconciliation package, which also includes a major reorganization of the federal student loan program, passed the Senate Thursday afternoon 56-43 on a nearly party-line vote after a grueling night and day of roll-call votes during which Republicans sought to derail the bill.

Later Thursday evening, House Democrats approved the same package 220 to 207 and formally concluded Democrats' tortuous 14-month drive to move major healthcare legislation through Congress for the first time in nearly half a century.

"More than 80 years ago, Franklin Roosevelt identified four freedoms: freedom of religion, freedom of speech, freedom from want and freedom from fear," said Sen. Christopher Dodd (D-Conn.), one of the architects of the healthcare overhaul.

"Today in many ways we are fulfilling that last of the great freedoms, the fear that you or your family could suffer a health-care crisis."

The president, who traveled to Iowa Thursday to tout the healthcare overhaul, is expected to the sign the legislation in the next several days.

Paralleling earlier healthcare votes this year, not a single Republican voted for the final package in the House or Senate.

Many GOP lawmakers have criticized the legislation as an unwarranted expansion of federal authority over the healthcare sector. And Thursday, Republicans kept up their call to roll back the legislation, previewing a debate that is expected to only intensify as election day approaches this fall.

"The important thing now … is to replace those who voted for the healthcare bill and to repeal it when we get some new members here," Sen. Jim DeMint (R-S.C.) told Fox News Channel's Sean Hannity Thursday.

Three Senate Democrats and 32 House Democrats also voted against the package Thursday, including several facing difficult reelection campaigns in traditionally Republican states such as Arkansas Sen. Blanche Lincoln.

The bill required only a simple majority in the Senate because Democrats used the budget reconciliation process to avoid a filibuster, which requires a 60-vote supermajority to squash.

The 153-page reconciliation package represents a small fraction of the gargantuan healthcare legislation that the House approved over the weekend and the president signed Tuesday.

But it makes several major changes to the main healthcare bill, including expanding subsidies that the federal government will provide to low- and moderate-income Americans starting in 2014 to help them buy health insurance.

The package also scales back a new 40% excise tax on high-end "Cadillac" health plans and delays its implementation until 2018.

It imposes a new tax on couples making more than $250,000, who will pay a 3.8% Medicare tax on capital gains and other investment income for the first time.

The bill boosts federal aid to states to help them expand their Medicaid programs, replacing a provision in the main healthcare bill that singled out Nebraska for special assistance.

And it would gradually close the gap in Medicare drug coverage known as the "doughnut hole," phasing it out completely by 2020.

Together, the healthcare legislation signed by the president and the reconciliation package approved Thursday are expected to cover an additional 32 million Americans by 2019, boosting the percentage of non-elderly Americans with insurance from 83% to 94%, according to estimates by the nonpartisan Congressional Budget Office.

The bill also establishes a broad new framework of government regulation to prevent insurance companies from denying coverage to people who are sick and to require insurers to provide a minimal level of benefits.

The coverage expansion would not be cheap, requiring an estimated $938 billion over the next decade to expand Medicaid, to give tax credits to small businesses to help them cover their employees and to provide insurance subsidies to Americans who do not get benefits at work.

Most Americans will for the first time be required to carry health insurance or pay a penalty.

Because the cost of the expanding coverage is offset by new taxes and cuts in what Medicare will pay insurers, hospitals and other providers over the next decade, the Congressional Budget Office estimated that the legislation will actually reduce the deficit slightly by 2019 by an estimated $143 billion.

Republicans have repeatedly criticized the new taxes and Medicare cuts.

And over a day and half of almost continuous voting on amendment, GOP senators tried to get Democrats to remove sections of the bill designed to raise revenue to pay for the legislation.

In the end, however, it was a provision of the bill unrelated to healthcare that almost tripped up the legislation.

The reconciliation bill includes a major change in the way the federal government helps students pay for college, giving the government authority to provide loans directly to students, instead of using private financial institutions as intermediaries. The student loan section of the legislation would use part of the projected savings from this change to expand the federal Pell Grant program for low-income students.

But very early Thursday morning, Republicans successfully objected to a minor provision designed to prevent the Pell Grants from decreasing in periods of deflation. The provision did not reduce the deficit, as required by the budget rules.

That forced Democrats to change the package, which in turn forced the House to take it up Thursday even though the House had approved an earlier version Sunday.

A spokeswoman for the House Education and Labor Committee said Democrats may add the provision to future legislation in the future if there are any signs of deflation.