US Senate Passes Healthcare Reform Bill 60-39 on Christmas Eve

The United States Senate scheduled what might be the most important vote on domestic issues for 2009 for a special late legislative session on Christmas Eve. Republicans say Democrats are trying to manipulate the process and punish them for opposing the measure, while Democrats say obstructionist Republicans made it necessary to extend the legislative session in order to hold the vote this year. This morning, the bill passed by a vote of 60 to 39, along party lines.

The vote means both houses of Congress have now passed bills addressing Pres. Obama’s signature domestic policy issue. At 8:48 am, Pres. Obama spoke to the public in order to commend the Congress for its efforts and celebrate virtues of healthcare reform. He noted that both bills ensure that no American will now be denied coverage due to a “pre-existing condition” or be refused treatment or reimbursement due to illness. Insurers will no longer be allowed to dump contributors whose health status they consider a “risk”.

The legislation comprises one of the most complex and sweeping achievements in American legislative history. It imposes stiff new regulations on health insurers, designed to attack standard practices that Sen. Barbara Boxer (D-CA) calls “price gouging”, and will extend health insurance coverage to an estimated 31 million new people. Sen. Edward M. Kennedy’s widow observed the vote from the Senate gallery and was visibly moved to see the work of her husband’s life finally pass the Senate.

Almost overnight, the tenor surrounding this central issue of controversy throughout 2009 has swelled in Obama’s favor. The New Republic magazine is now calling the healthcare reform legislation “the greatest social achievement of our time”. Jonathan Chait writes that:

At some level, it is possible to understand the roots of liberal frustration. The machinery of Congress has ground away at the health care bill, as it does to almost any bill. But at a broader level, the liberal mood is insane. What has emerged from that machinery is not merely “better than nothing” or “a good start.” It is the most significant American legislative triumph in at least four decades. Why can so few people see that?

Pres. Obama has been assailed from all quarters for the legislative infighting, the fractious Democratic party negotiating process and the significant compromises needed to get the bill to passage. Having observed how disastrous Pres. Clinton’s healthcare battle was, when the White House attempted to push its own bill through both houses of Congress, Pres. Obama sent a framework proposal to both houses, tasking them with crafting the legislation and negotiating passage.

Building consensus is not an easy task, and it is seriously thankless. But representative democracy requires it, and Obama’s approach to shaping and passing this historic legislation is a marked departure from the Washington politics of the last decade, in which the success of the presidency was measured by the president’s ability to strong-arm Congress into passing his precise desires, at times with little to no debate. But now comes perhaps the most fearsome negotiating process, that of reconciling the House and Senate versions of the reforms.

After the new year, the healthcare reform bill will go to conference committee, where negotiators from both houses will work to find common ground and craft the language of one single piece of legislation that can pass in both houses. Among the sticking points to be hashed out is how the reforms will be funded: the Senate bill taxes so-called “Cadillac plans”, health insurance policies costing more than $8,500 for an individual. While organized labor and some progressive groups have criticized this provision, it is designed to force insurers to lower the rates they charge.

As the New Republic notes:

This tax represents the partial fulfillment of a longtime goal of both the right and the left. Employer-sponsored health insurance is tax-deductible, while wages are, of course, taxed. This means an additional dollar of health care benefits costs less than an additional dollar in wages—an anomaly that has contributed to runaway health care costs.

The tax policy change is thought to be a way to motivate price competition among insurers, as employers search for ways to cover their employees for less than $8,500. Insurers are “compensated” by the huge expansion of the insurance market, an estimated 31 million people or more. There will also be tough fights to influence how the conference committee negotiates differences regarding a public option for low-cost full-coverage health insurance —the House includes one, the Senate does not— and language restricting the ability of insurers to provide coverage for abortion procedures.

The Sydney Morning Herald reports that:

Obama pledged in a television interview Wednesday that he would “absolutely” take a hands-on role in the reconciliation process in coming weeks.

“We hope to have a whole bunch of folks over here in the West Wing, and I’ll be rolling up my sleeves and spending some time before the full Congress even gets into session,” he said on PBS.

Sen. Olympia Snowe (R-ME), a moderate Republican who had worked with the Democratic caucus in an effort to remove the public option from the Senate proposal, not only opted to vote against the bill, but joined 38 other Republicans in voting for a resolution proposed by Sen. John Ensign (R-NV) that would declare the bill “unconstitutional”. The Ensign resolution says the bill violates both the 5th Amendment and the Commerce Clause of the United States Constitution.

Progressives are angry because the Senate bill does not include the public option for low-cost full-coverage insurance and instead imposes an individual mandate that all citizens must buy health insurance or face potential fines. But proponents of the Senate approach say it is vitally important that the reforms would not only reduce the federal budget deficit by over $130 billion over the first ten years and by $1 trillion over the second ten years, but that it would also ensure that the tens of thousands of deaths per year owing to lack of insurance coverage would not occur.

Republicans have now begun to decry the fact that a provision not relevant to the insurance-related work of the healthcare reform bill, something called the “doctor fix” —a reprieve on cost cuts for Medicare reimbursements to doctors— is not “fully paid for” by these reforms. The doctor fix is controversial, because it is meant to prevent a Republican-engineered slash in Medicare payments to doctors —passed in 1998— from taking effect, and now, Republicans seek to smear the entire reform process as “too costly”, despite its historic deficit reduction provisions, for not ensuring doctors suffer those cuts.

House leadership are now expected to be pushing the argument that the Senate bill’s provisions are acceptable and might even be “the best Trojan horse” for an eventual move toward a single-payer system. That will be a tough sell, and the reconciliation process continues to promise an uphill battle, but the Senate has, today, handed Pres. Obama one of the most significant legislative victories in decades. It is likely Democrats will use the passage of this legislation and the expected continued bad behavior of insurance companies to push for more pervasive reforms, designed to continue reducing costs to consumers and improve access to care.