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Democrats on Capitol Hill are divided over whether health insurance would be sold at the state or national level under their health care reform legislation, one of a series of differences between House and Senate plans that need to be ironed out before it can pass.
Labor unions, meanwhile, say they are standing their ground in opposition to a tax on high-priced insurance plans, driving a greater wedge between the House and Senate on how to pay for the reform bill.
Democrats have a series of differences to hammer out in the coming weeks before they send their bill to the president’s desk. House members returned to Washington on Tuesday to start talking about their negotiations with the Senate, which is scheduled to return next week. Some Democrats have said they hope to have a combined bill through both chambers by President Obama’s State of the Union address, which is expected to be held in early February.
Both the House and Senate’s reform bills would establish insurance exchange portals similar to Travelocity.com or Expedia.com where consumers and small-business owners would go to purchase insurance coverage. But while the House would authorize a new health choices administrator to set up one national exchange, the Senate wants the states to be responsible for setting up their own exchanges.
House Democrats said Tuesday that they plan to fight for the national plan.
“We want to make sure it’s the same all over the country,” said Rep. Louise M. Slaughter, New York Democrat.
Proponents of the national plan — a camp Mr. Obama fell in as a presidential candidate — say that having one central exchange would provide consumers enormous bargaining power that would drive down costs and would cut down on administrative costs that would be duplicated if each state had to do their own program.
But advocates of the state idea say the national plan risks overlooking regional differences in insurance coverage and that states already have insurance commissioners and insurance regulatory infrastructure in place, allowing them to more quickly and efficiently set up an exchange.
Most health insurance regulation exists now at the state level. Insurance commissioners say that they would not be an effective consumer advocate — under current law they are responsible for answering complaints against insurers for violations such as not addressing claims or denying coverage — if legislating authority moved to the national level.
“The thing that we fear the most is we would not have the ability to enact [state] laws to create greater consumer protections,” said Sandy Praeger, Kansas insurance commissioner and chairwoman of the health and managed care committee at the National Association of Insurance Commissioners. “We would see the problems and not really be able to solve them.”
In Texas, Democrats are worried that Republican state leaders won’t enact or would stall the implementation of a state exchange. Eleven Democratic lawmakers from the state wrote in a letter to House Speaker Nancy Pelosi and Majority Leader Steny H. Hoyer that the House plan would ensure that uninsured Texans would get coverage more quickly.
The Senate bill “not only reduces the market leverage of the exchange and increases complexity, but it also relies on states with indifferent state leadership that are unwilling or unable to administer and properly regulate a health insurance marketplace,” the lawmakers said in the letter. “A number of states opposed to health reform have already expressed an interest in obstruction.”
The House bill would allow states that want to set up their own plan to do so, as long as it meets national standards.
The bills would require nearly all Americans to carry health insurance and provide tax subsidies to low- and middle-income Americans. All health insurance would have to be purchased through the exchanges in a move designed to prevent fraud and ensure that all coverage meets minimum government standards.
The exchange idea is up and running in Massachusetts, where residents are required to carry insurance. They purchase it through the Massachusetts Commonwealth Connector, a Web site where residents insert their age, ZIP code and family size and receive coverage options to purchase.
Labor union leaders met with Mrs. Pelosi at the Capitol on Tuesday but declined to say whether they would accept the tax on high-priced insurance plans if the threshold was raised, a possible compromise when merging the bill with the Senate, which doesn’t have the tax.
But the International Association of Fire Fighters union said later that the unions plan to fight the tax.
“We’re very much holding the line,” said Harold A. Schaitberger, general president of the IAFF. “The House has it right. The Senate has it wrong.”
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