By David M. Herszenhorn and Robert Pear

After a long day of acid, partisan debate, Senate Democrats held ranks early Monday in a dead-of-night procedural vote that proved they had locked in the decisive margin needed to pass a far-reaching overhaul of the nation’s health care system.

The roll was called shortly after 1 a.m., with Washington still snowbound after a weekend blizzard, and the Senate voted on party lines to cut off a Republican filibuster of a package of changes to the health care bill by the majority leader, Harry Reid of Nevada.

The vote was 60 to 40 — a tally that is expected to be repeated four times as further procedural hurdles are cleared in the days ahead, and then once more in a dramatic, if predictable, finale tentatively scheduled for 7 p.m. on Christmas Eve.

Both parties hailed the vote as seismic.

Democrats said it showed them poised to reshape the health system after decades of failed attempts.

“Health care in America ought to be a right, not a privilege,” said Senator Christopher J. Dodd, Democrat of Connecticut. “Since the time of Harry Truman, every Congress, Republican and Democrat, every president, Democrat and Republican, have at least thought about doing this. Some actually tried.”

Republicans said that the bill was fatally flawed and that voters would retaliate against Democrats at the polls in November.

“It’s obvious why the majority has cooked up this amendment in secret, has introduced it in the middle of a snowstorm, has scheduled the Senate to come in session at midnight, has scheduled a vote for 1 a.m., is insisting that it be passed before Christmas — because they don’t want the American people to know what’s in it,” said Senator Lamar Alexander, Republican of Tennessee.

Mr. Alexander added, “Our friends on the Democratic side seem determined to pursue a political kamikaze mission toward a historic mistake.”

Each side blamed the other for the extraordinary series of votes — at dawn Saturday, after midnight Monday, at dawn again on Tuesday, at 1 p.m. on Wednesday and finally on Christmas Eve, when most Americans will be sequestered for the holiday.

The Democrats charged the Republicans with obstinately throwing every procedural obstacle in their way, including filibusters and the full 30 hours of debate allowed under the rules after each filibuster is broken by a vote of 60 senators.

The Republicans charged the Democrats with recklessly rushing to adopt a dizzyingly complex 2,700-page bill that would affect virtually every American, and would reshape one-sixth of the nation’s economy at a cost of $871 billion over 10 years.

“If the Republicans want to exercise every single right they have under the rules, they can keep us here until Christmas Eve, no doubt about it,” said Senator Tom Harkin, Democrat of Iowa. “But to what end, I ask? To what end? We’re going to have the vote at 1 a.m. that requires 60 votes, and then why stay here until Christmas Eve to do what they know we’re going to do?”

Senator John Cornyn, Republican of Texas, said he and his colleagues had a duty to fight until the last minute.

“There is nothing inevitable about this,” Mr. Cornyn said. “The only thing I think inevitable about it is in the light of the unpopularity of what is being jammed down the throats of the American people, there will be a day of accounting. We don’t know when that day of accounting will be. Perhaps the first day of accounting will be Election Day 2010.”

Adoption of the legislation is not a certainty.

The Senate bill, once completed, must be reconciled with the bill adopted by the House last month, and there are substantial differences between the two. The House measure, for instance, includes a government-run health insurance plan, or public option, that was dropped from the Senate bill.

The House speaker, Nancy Pelosi, has said the House would not just accept the Senate bill. And some Senate Democrats have warned that they could turn against the bill if changes made during negotiations with the House are not to their liking.

Read the rest at New York Times.

Posted from Wall Street Journal

The Baucus plan would make insurance even more expensive

Senate Finance Chairman Max Baucus finally unveiled his health-care plan yesterday to a chorus of bipartisan jeers. The reaction is surprising given that President Obama all but endorsed the outlines of the Baucus plan last week. But the hoots are only going to grow louder as more people read what he’s actually proposing.

The headline is that Mr. Baucus has dropped the unpopular “public option,” but this is a political offering without much policy difference. His plan remains a public option by other means, imposing vast new national insurance regulation, huge new subsidies to pay for the higher insurance costs this regulation will require and all financed by new taxes and penalties on businesses, individuals and health-care providers. Other than that, Hippocrates, the plan does no harm.

The centerpiece of the Obama-Baucus plan is a decree that everyone purchase heavily regulated insurance policies or else pay a penalty. This government mandate would require huge subsidies as well as brute force to get anywhere near the goal of universal coverage. The inevitable result would be a vast increase in the government’s share of U.S. health spending, forcing doctors, hospitals, insurance companies and other health providers to serve politics as well as or even over and above patients.

The plan essentially rewrites all insurance contracts, including those offered by businesses to their workers. Benefits and premiums must be tailored to federal specifications. First-dollar coverage would be mandated for many services, and cost-sharing between businesses and employees would be sharply reduced, though this is one policy that might reduce health spending by giving consumers more skin in the game. Nor would insurance be allowed to bear any relation to risk. Inevitably, costs would continue to climb.

Everyone would be forced to buy these government-approved policies, whether or not they suit their needs or budget. Families would face tax penalties as high as $3,800 a year for not complying, singles $950. As one resident of Massachusetts where Mitt Romney imposed an individual mandate in 2006 put it in a Journal story yesterday, this is like taxing the homeless for not buying a mansion.

The political irony here is rich. If liberal health-care reform is going to make people better off, why does it require “a very harsh, stiff penalty” to make everyone buy it? That’s what Senator Obama called it in his Presidential campaign when he opposed the individual mandate supported by Hillary Clinton. He correctly argued then that many people were uninsured not because they didn’t want coverage but because it was too expensive. The nearby mailer to Ohio primary voters gives the flavor of Mr. Obama’s attacks.

And the Baucus-Obama plan will only make insurance even more expensive. Employers will be required to offer “qualified coverage” to their workers (or pay another “free rider” penalty) and workers will be required to accept it, paying for it in lower wages. The vast majority of households already confront the same tradeoff today, except Congress will now declare that there’s only one right answer.

Read the rest at Wall Street Journal.

Posted from the Examiner

President Obama and congressional Democrats this week, following focus group testing, altered their rhetoric by beginning to refer to their proposed health insurance exchange as a the creation of a health insurance marketplace. The change in rhetoric is simple enough to understand, as the term marketplace is more soothing to a general public that has grown accustomed to more than 200 years of a capitalist based economy. But, the question remains as to whether the term marketplace is an accurate depiction of the proposed Health Insurance Exchange or rather just creative marketing designed to create a false perception.

A marketplace, by 200 years of evolving definition, is a forum that promotes healthy competition between businesses offering a diversity in products and services at varying prices. A marketplace is the the ultimate exercise in capitalism as the public, not the operators of the forum or businesses, determine which products are purchased and which companies survive. The best example of a marketplace is simply a flea market, whereas any vendor is allowed to sell the products they design or choose and the consumer has the ability to determine what products they will purchase and at what price. If the administration wanted to create a true health Insurance marketplace they could do so in three very easy steps:

#1) The largest factors in Health insurance premiums are the size of the insurance pool and the claims experience of those insured. The more individuals covered under a policy, the more manageable, predictable and stable the claims payouts become. However, the federal government does not allow health insurance companies to offer policies across state lines and does not allow small groups or businesses to create associations in order to increase their insurance pool. As a result, the insurance pool of a policy is limited by the number of individuals covered within a single geographic location and in the case of employer-sponsored coverage by the number of employees. A simple change in federal regulations allowing companies to sell policies across state lines and allowing small businesses to combine their plans would dramatically increase the size of insurance pools and provide more manageable and stable premiums.

#2) Under the current system, not only are plans limited to an individual state, but the government controls which plans may be offered within the state and which companies will be allowed to sell policies in the state. As a result, the marketplace is limited by the government and regulations greatly vary from state to state. By removing regulations that prohibit interstate selling and uniform standards companies new competition would enter into most states, creating a diversity in options and ending a practice of preferential treatment of companies by state regulators.

#3) Creating a uniform system of small business and low income tax credits designed to encourage inclusion to the health insurance marketplace at a minimum coverage level, rather than a penalizing tax structure or mandated benefits level, will encourage small businesses and the uninsured to purchase at least catastrophic coverage while maintaining the right to choose a level coverage based upon individual preferences. The adoption of such simple steps would create a true health insurance marketplace designed to promote competition and allow the public the opportunity to determine coverage levels and premiums. Within a true health insurance marketplace, the consumer has the ability to determine what benefits and coverage levels they will purchase while choosing what premium is acceptable for that coverage.

So can the proposed health insurance exchange be considered a marketplace?

No, the Health Insurance Exchange, as currently written neither promotes competition nor public choice.

Read the rest of the article