Senate Democrats Near Deal On Health Care Senate Democrats may have reached a compromise that could pave the way for passage of a sweeping health care overhaul before Christmas. The package reportedly redefines the public option to allow nonprofit insurers to sell policies regulated by the government, and may include allowing baby boomers to buy into Medicare early.
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Senate Democrats Near Deal On Health Care

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Senate Democrats Near Deal On Health Care

Senate Democrats Near Deal On Health Care

Senate Democrats Near Deal On Health Care

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Details continue to trickle out about the potential deal reached Tuesday night among a small group of Senate Democrats to try to spring the health care overhaul bill from its state of legislative limbo.

Five moderates and five liberals appointed by Senate Majority Leader Harry Reid may have found a compromise on a government-sponsored health insurance option that can win the 60 votes he needs. For the most part, the plan that's now getting its cost estimated by the Congressional Budget Office is still largely under wraps. It's unclear whether it will garner enough support to move the bill to a final vote.

Despite how little is known about the agreement, President Obama took a minute from a community health center event Wednesday to praise the potential compromise.

"The Senate made critical progress last night with a creative new framework that I believe will help pave the way for final passage and a historic achievement on behalf of the American people. I support this effort, especially since it's aimed at increasing choice and competition, and lowering cost," Obama said.

Whether or not the plan includes a public option — a federally run health plan — will apparently come down to how you define "public option." There will likely be a role for the federal Office of Personnel Management, which now oversees the hundreds of private plans that cover 9 million federal workers and their families, including members of Congress. It's known as the Federal Employees Health Benefits Program, and it's often held up as a model for public-private cooperation on health care.

Exactly what the Office of Personnel Management would oversee under Reid's new plan remains unclear. What's being discussed includes having the office oversee a group of private, nonprofit health plans.

Expanded Medicare Coverage

The package will likely include a proposal to let some people aged 55 to 64 buy into Medicare coverage early. That pleases senators like West Virginia Democrat Jay Rockefeller, who's been pushing for such a change for years.

"I would love to get that," said Rockefeller of the proposed change. "It's a lot of people, and it's really good."

Good is not the word Republicans are using to describe the idea. Particularly because they've spent most of the past week castigating Democrats for cutting Medicare spending in the bill.

"How in the world can we take $1 trillion out of Medicare, and add 34 or 35 million more Americans a chance to opt in it, at a time when the trustees have said it's going broke in five years?" asked Republican Sen. Lamar Alexander of Tennessee.

Alexander's numbers don't quite add up — no one's talking about adding that many more people to the program; it's more likely to be in the 3 million range. But the sentiment that adding more people to Medicare at a time when it's struggling financially is one that's shared not just by Republicans, but by health care provider groups.

Hospitals And Medicare Payments

And some of those provider groups have been major backers of the health overhaul effort. The American Hospital Association is one of them. "No one wants to see expanded coverage more than America's hospitals," said the group's Executive Vice President Rick Pollack. "However, we're extremely concerned about this kind of an approach, because it moves people away from the private sector into government programs that are chronically underfunded."

Pollack said the average hospital already gets about 40 percent of its revenue from Medicare, and that the payment doctors and hospitals receive from the program isn't enough.

"Medicare pays even less than the cost of delivering services," he said. "And as more patients are reimbursed at levels below the cost of providing the service, it obviously makes it difficult to maintain essential public services that patients and communities depend upon."

Insurance Companies Fear More Cost-Shifting

Hospitals typically make up that shortfall by passing the costs to privately insured patients. Those patients usually pay more. That's made the idea of letting younger patients join Medicare not very popular with the insurance industry, either.

"Families and employers are paying higher premiums to offset under-reimbursements from the Medicare program today," said Robert Zirkelbach, a spokesman for the group America's Health Insurance Plans. "Expanding the number of people in the Medicare program will exacerbate this underfunding and increase costs for people with private coverage."

There's another element of the emerging compromise plan that's drawn fire from the insurance industry. Insurers may be required to spend 90 percent of each premium dollar on direct health care services, and only 10 percent for administrative costs.

But Zirkelbach said that could curtail some of the very programs the government wants to expand. "Administrative costs include programs like disease management, care coordination, prevention and wellness; all of these things have broad support," he said.

Senate Democrats are meeting tonight to go over the deal. If all 60 members of their caucus approve of the new idea, the bill will move closer to a final vote, perhaps as early as Christmas.