Senate negotiators struck a tentative agreement Tuesday night to replace the controversial government-run insurance plan in their version of health-care legislation, hoping to remove one of the last major roadblocks preventing the bill from moving to a final vote in the chamber.
"We have a broad agreement," Senate Majority Leader Harry M. Reid (D-Nev.) told reporters at the Capitol. "Tonight, we've overcome a real problem that we had."
The announcement came after six days of virtually round-the-clock negotiations between five liberals and five moderates who had been tasked by Reid to work out their differences on the public option. Appearing with Sen. Charles E. Schumer (D-N.Y.), the leader of the liberal faction, and Sen. Mark Pryor (D-Ark.), the moderate leader, Reid declined to detail the agreement, pending a review by congressional budget analysts.
However, when asked whether the agreement means the end is in sight after nearly a year of work on President Obama's most important domestic initiative, Reid smiled. "The answer's yes," he said.
Earlier in the day, the Senate turned back an amendment that would have barred millions of Americans from purchasing subsidized insurance policies that cover abortion, as Democratic leaders struggled to maintain a delicate party coalition in their push for the landmark legislation.
Both issues have made the $848 billion Senate bill move forward slowly, despite Reid's pledge to hold a final vote before Christmas.
The abortion amendment was rejected 54 to 45. Although the outcome of the vote was not a surprise, the amendment's defeat could cost Reid the support of Sen. Ben Nelson (Neb.), a conservative Democrat who has threatened to join a GOP filibuster bill unless restrictions on abortion are tightened.
Nelson is one of five moderates in the Democratic caucus demanding changes to the legislation, forcing Reid to balance their concerns with those of liberals as he seeks to maintain the 60 votes needed to push a bill across the finish line. The biggest challenge has been determining the fate of the public option, a chief priority for Democratic progressives.
Key liberals said they were prepared to abandon a government-run insurance program if it would move the chamber closer to a final deal, provided it was replaced with other coverage options and tighter restrictions on insurance companies. "I don't think we're going to get that right now," Sen. John D. Rockefeller IV (D-W.Va.) said of the public option. "So we're going for as strong a regulation guidance as we possibly can."
Democrats made a different calculation on abortion. Although the House included language that would restrict funding for the procedure in its version of the bill, Senate Democrats rejected Nelson's measure, despite the potential threat to final passage. Six Democrats joined all but two Republicans to support the tighter rules, but some Democratic abortion opponents -- including Reid -- opposed the amendment as too far-reaching.
Reid said the current Senate language, which would allow individuals who qualify for insurance subsidies to purchase abortion coverage with their own money, represented "a fair middle ground."
He told reporters he would seek other avenues in attempting to allay Nelson's concerns, but added, "This is not the right place for this debate. We have to get on with the larger issue at hand." After the vote, Nelson said he would not rule out supporting the final Senate measure. "Let's see what develops. One thing I've found is that the future sometimes can surprise you," he said.
A series of pending amendments, including several popular measures, must be resolved before Reid can begin ending debate on the bill and calling a final vote. On Wednesday, the Senate is expected to consider a bipartisan effort to allow cheaper prescription drugs to be imported from Canada and other countries. And a group of Senate Democratic freshmen are pushing a package of cost-control provisions, including an expansion of an independent Medicare advisory board that would allow it to recommend changes to the entire health-care system.
Despite the full slate, Reid said he is optimistic. "Every day that we work on these amendments and do the negotiations we're doing, the closer we get to the finish line," he told reporters.
As lawmakers scramble to complete the bill, even the abortion provision drew a relatively brief and muted exchange, consuming only several hours of floor time. Nelson, in his closing remarks before the vote, sought to dampen any intraparty rifts. "Our amendment does not take sides on abortion," he said. "It's about the use of taxpayer money."
After the vote, Nelson returned to join 10 Democratic moderates and liberals in finding alternatives to the public insurance plan. Senators involved said the group is considering four approaches.
The most popular idea would create at least two national insurance plans offered by private firms but with rates negotiated by the Office of Personnel Management, the agency that oversees coverage for federal workers. Under the proposal, OPM would lay out criteria for coverage and seek responses from private firms, which the agency could authorize to participate.
The group also weighed an expansion of Medicaid eligibility for people with annual incomes of up to 150 percent of the federal poverty level, an idea that would add about $50 billion over the next decade to the Medicaid costs under the Reid bill. Liberal negotiators also were seeking to create a Medicare buy-in program for people as young as 55 who do not have access to coverage through an employer.
By some estimates, that idea could add as many as 3 million people to Medicare. The Congressional Budget Office has estimated that those individuals could face annual premiums of as much as $7,600. And because such a program could encourage people to retire earlier than they might otherwise, a buy-in program could increase Social Security costs for the government.
Key senators, including Olympia J. Snowe (Maine), the only Republican to have supported Democratic reform efforts so far, are resisting an additional expansion of Medicaid, citing the greater burden on states. But even moderates are willing to discuss a Medicare buy-in program, as long as states with particularly low Medicare reimbursement rates were compensated and a mechanism was adopted to ensure that Medicare would not take a financial hit.
Snowe -- whose vote would become crucial if Nelson defects -- relayed her concerns to Reid in a private meeting Tuesday. "It's an expansion of government at a time when we should be moving in an opposing directly," she said of the Medicare and Medicaid proposals. "You can design incentives in this legislation to maximize and empower the marketplace and make sure that the industry performs. You can do that without having to delve into expanding government in the process and creating unintended consequences of government assuming greater financial liability."
Negotiators acknowledged the challenge, but expressed confidence that a deal could be struck.
"What we're trying to figure out here, certainly within our caucus and then maybe with Olympia, is how much government involvement there should be in health care, how much private involvement," said Schumer, the liberal leader of the public option talks. "And there are disagreements. And what we're trying to do is reconfigure that, not having more of one or less of one, but in different ways that are more acceptable to people."