Democrats consider dropping Medicare expansion

WASHINGTON (AP) - December 14, 2009 "Democrats aren't going to let the American people down," Majority Leader Harry Reid said after a closed-door meeting called to discuss last-minute trade-offs in the legislation that President Barack Obama has made a top priority. "I'm confident that by next week, we will be on our way toward final passage."

Liberals sought the Medicare expansion as a last-minute substitute for a full-blown, government-run insurance program that moderates earlier insisted be jettisoned. But it drew strong opposition from Sen. Joe Lieberman, I-Conn., and quieter concerns from a dozen Democrats - all of whose votes are essential for Democrats to overcome implacable Republican opposition.

"Put me down tonight as encouraged about the direction these talks are going," Lieberman said less than 24 hours after he rattled Democrats with his threat to join side with Republican opponents unless he got his way.

Reid did not say flatly that Democrats had decided to drop the proposal for uninsured Americans as young as 55 to purchase coverage under Medicare. But several senators said it appeared inevitable, and liberals sounded resigned to it. "I want to see health care reform," Sen. Sherrod Brown, D-Ohio, said.

One official said participants at the meeting broke into applause when Sen. Arlen Specter of Pennsylvania, who switched parties earlier in the year, said he had made his move to become the 60th vote for health care.

And with all Democratic senators invited to meet with Obama at the White House complex on Tuesday, that appeared a prime opportunity for him to join his guests in a display of unity.

The overall measure, costing nearly $1 trillion over a decade, is designed to expand coverage and ban the insurance industry practice of denying coverage on the basis of pre-existing medical conditions. Obama also has urged Congress to slow the rate of growth in health care spending nationally, and several days after Reid submitted a package of revisions, lawmakers awaited final word from the Congressional Budget Office on that point.

Disputes over abortion and the importation of prescription drugs from Canada and other countries also flared as the Senate entered a third week of debate on the legislation.

The president met Monday with Sen. Bob Casey, D-Pa., who has been trying to negotiate a compromise on the abortion issue with Sen. Ben Nelson of Nebraska. Both senators oppose abortions, but Nelson has been outspoken in demanding changes in the bill before he can vote for it.

In a gesture that Democrats said was aimed at the AARP, Reid promised late in the day that any final compromise with the House would completely close a gap in Medicare prescription drug coverage generally known as a "doughnut hole." The Senate bill goes only part way toward that goal.

Less than two hours later, AARP CEO A. Barry Rand dispatched a letter to the Nevada Democrat saying his organization "urges timely passage" of the measure.

There was no let-up in Republican criticism.

Kentucky Sen. Mitch McConnell, the party's leader, said the legislation includes "a half a trillion dollars in cuts in Medicare, $400 billion in higher taxes and higher premiums for everyone else."

Sen. Byron Dorgan, D-N.D., led the effort to lift a long-standing ban on the importation of prescription drugs from Canada and elsewhere. Obama favored the plan as a senator, but the pharmaceutical industry is opposed, and the White House appeared anxious not to jeopardize a monthslong alliance with drug makers who have been helpful in trying to pass the overhaul. A vote was set for Tuesday.

But the obstacle that loomed largest was the Medicare expansion proposal, vestige of a monthslong debate over the role of government in the newly revised health care system. It emerged last week as part of a framework agreement between moderates and liberals struggling to define the role of government in the newly revised health care system. Additionally, the proposal calls for creation of nationwide plans run by private insurance companies under the supervision of the Office of Personnel Management, the agency that oversees the system through which federal employees and lawmakers obtain coverage.

The two provisions were seen as a replacement for Reid's initial call for a government-run insurance plan to compete with private industry. The one unrelated to Medicare is expected to survive - but without standby authority for the OPM to set up a government-run plan if no private coverage options materialize.

Liberals have long wanted a government-run option, but moderates oppose it as an unwanted intrusion into the health care system. In announcing the agreement last week, Reid told reporters he could finally see the finish line for his effort to pass a health care bill.

Despite that optimism, opposition to the Medicare changes blossomed from doctors and hospitals, who are paid less to treat patients under Medicare than those covered by private insurance companies.

Lieberman announced his opposition over the weekend, triggering an unusual round of finger-pointing in which Senate aides anonymously accused him of having flip-flopped on the issue after privately indicating to Reid he was in favor of it.

The Connecticut senator denied it. But his consistency came under question when House Democrats circulated a videotape from September in which he spoke favorably of allowing uninsured men and women as young as 55 to purchase Medicare coverage.

Lieberman wasn't the only critic.

"We appreciate the rationale underlying the proposed Medicare expansion but fear that provider shortages in states with low reimbursement rates such as ours will make such a program ineffective, or even worsen the problems states are experiencing," a dozen Democrats from across the political spectrum wrote Reid.

--- Associated Press writers Donna Cassata, Andrew Miga, Ricardo Alonso-Zaldivar and Erica Werner contributed to this report.

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