November 30, 2009

Senate Begins Debate On Sweeping Healthcare Reform

The U.S. Senate is set to begin debate today on sweeping legislation that would overhaul the nation's healthcare system. 

Among the contentious issues involved in the legislation are a government-run insurance plan, abortion coverage and how the plan can reign in spiraling healthcare costs.

The debate, set to begin at 3 p.m. EST on Monday, is expected to last three weeks or longer, with Republicans pledging to do whatever they can to block or delay passage of the bill.

The Senate plan seeks to control healthcare costs, expand health insurance coverage to some 30 million uninsured Americans and end the practice of denying coverage to those with pre-existing medical conditions.

In a report that provided plenty of validation to both Democrats and Republicans, the nonpartisan Congressional Budget Office (CBO) estimated on Monday that insurance premiums could increase by 10 to 13 percent by 2016 for those purchasing coverage independently under the new plan.

However, federal subsidies to those with lower incomes would reduce the actual costs for about half of the group, the CBO said.

The legislation's impact would be much less for those who receive coverage through their employers, the CBO said, while those purchasing plans independently would incur higher premiums because they would receive greater benefits.

Monday's CBO estimate came at the request of Senator Evan Bayh (D-IN).  The CBO said the report included a "substantial degree of uncertainty," and that the results would vary according to the amount of coverage purchased and other factors.

Shares of health insurers were down following the CBO report, with the Morgan Stanley Health care Payor stock index and the S&P Managed Health Care stock index both down more than 1 percent during late morning trading.

Many senators have expressed concern about the legislation's impact on consumer costs and insurance premiums.  

Given that Democrats control 60 seats out of the 100-member Senate, there is no margin for error in gaining the necessary support to overcome Republican opposition.

The Senate debate will include consideration of a government-run public health insurance option, which supporters say will create more competition for insurers.  But critics of the public option say it essentially amounts to a government takeover of the industry. 

Efforts to tighten language prohibiting the use of federal funds for abortions will also be included in the debate.

The House of Representatives passed its own healthcare reform bill on November 7.  If the Senate passes its plan, the two versions will have to be reconciled and passed again by each chamber before being submitted to President Obama for his signature.