March 12 (Bloomberg) -- Republicans said they won a parliamentary victory as they try to fight Democrats’ efforts to pass legislation to overhaul the U.S. health-care system.
Republicans said President Barack Obama has to sign a Senate health-care bill into law before the House and Senate can approve changes to it under a process called reconciliation. The Senate parliamentarian told Republicans that a reconciliation bill has to “make changes in law,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell.
“This would be another headwind for Democrats in the House” who oppose provisions in the Senate bill, said John Sullivan, a health-care analyst at Boston-based Leerink Swann & Co. “Their biggest fear has been that they vote for the Senate version and they never get the relief they’re looking for.”
Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada, declined to comment.
The prospect of longer odds for passage sent U.S. stocks up yesterday, reversing earlier losses. The Standard & Poor’s 500 Index rose 0.4 percent. The S&P 500 Managed Health Care Index climbed 1.6 percent, led by Bethesda, Maryland-based Coventry Health Care Inc., which rose 3.4 percent.
“I would expect that this would put a big barrier to this moving forward,” said Ana Gupte, a health-care analyst at Sanford C. Bernstein & Co. in New York. “I would not expect the House” to pass the Senate bill, she said.
Reconciliation, which requires a simple majority vote in the Senate, is at issue because Democrats are trying to find a way to complete their work on health care now that they control only 59 of the 100 seats in the chamber. Senate Democrats passed their original bill in December with 60 votes, the number generally required to push through major legislation.
Obama is asking the House to pass the Senate bill as well as another measure to make changes to it under reconciliation, a process designed for budget items. The Senate would then also approve the changes under reconciliation.
The problem is that House Democrats object to some parts of the 10-year, $875 billion Senate bill, so they are seeking assurance that the package of changes will also become law. They wanted Obama to hold off signing the Senate bill until the reconciliation measure passed both chambers.
Illinois Senator Dick Durbin, the No. 2 Senate Democrat, said on March 9 that he understands why some House Democrats might not trust the Senate to act on the reconciliation changes.
‘Right to Be Skeptical’
“The House has a right to be skeptical,” Durbin told reporters. “They have almost 300 bills they’ve passed” that are “somewhere lost in the Senate,” he said.
The news from Republicans, who unanimously oppose the legislation, came on the same day that House and Senate leaders said they had reached agreement on the majority of the language in the new reconciliation bill. The leaders presented the outlines of the plan to House Democrats yesterday.
“The decisions are made, the choice has to be made” by lawmakers, House Speaker Nancy Pelosi told reporters.
Democrats are calling for the biggest changes to the medical system since the Medicare health program for the elderly was created in 1965. Their plan would require Americans to get insurance, covering tens of millions more people, and offer new purchasing exchanges and government aid to help.
Insurance company executives including WellPoint Inc. Chief Financial Officer Wayne DeVeydt say the legislation doesn’t have strong enough penalties for people who don’t buy insurance and doesn’t do enough to curb medical costs. That means insurers, who would be required to accept people with pre-existing conditions, would have to raise rates, DeVeydt said on March 10.
Obama is pushing Congress to act before lawmakers leave for a two-week recess on March 26. Pelosi said the vote “is not something we are going to drag out” and that the lawmakers are awaiting a cost analysis by the Congressional Budget Office. The White House estimated that a proposal Obama put forth last month, which is providing the basis for the reconciliation bill, would cost $950 billion over 10 years.
Pelosi said the legislation will eliminate 80 percent of an excise tax on high-priced insurance plans in the Senate measure and replace the lost revenue with a Medicare payroll tax on unearned income. It will increase Medicare prescription-drug benefits to eliminate a gap in coverage for seniors, she said.
Leaders haven’t reached agreement on the level of subsidies to help low-income Americans purchase insurance and how much extra help to give states such as New York that offer more generous Medicaid benefits, said a House Democratic leadership aide who spoke on condition of anonymity.
The leaders also haven’t yet decided whether to include House legislation to revamp the college student-loan program, said California Representative Henry Waxman, who’s helping oversee the health-care effort. The House-passed measure would expand a government student-lending program to eliminate the role of private lenders making federally-guaranteed loans.
The House Budget Committee will take up the reconciliation measure on March 15, said a congressional aide familiar with the schedule.