Thursday, January 14, 2010

The White House has reached a tentative agreement with union leaders to tax high-cost medical plans, one of the final obstacles in the way of President Obama’s health care remake, officials said Thursday.

Details of the agreement were not immediately available. The tentative deal was expected to be presented to congressional leaders Thursday as negotiators try to wrap up an agreement on core elements of the sweeping legislation as early as Friday.

The proposed tax has been a major sticking point because early versions from the Senate would have hit union members, who have negotiated generous health benefits, sacrificing higher wages. House Democrats were strongly opposed and did not include the tax in their bill. But Mr. Obama favored the tax, citing the consensus of economists that it would help hold down costs by nudging workers into less pricey coverage.

Union and Democratic officials spoke about the tentative deal on condition of anonymity because the talks were private.

Word of it came as the pace of negotiations quickened.

Rep. Charles B. Rangel, New York Democrat, who chairs the House Ways and Means Committee, told reporters that negotiators are pushing toward a broad agreement on the legislation by Friday, and would send the package to the Congressional Budget Office for its estimates. The agreement in principle would cover key issues such as how many Americans would get coverage and how to pay for it. Certain issues, including restrictions on taxpayer funding for abortion, would be resolved later.

“We’re shooting for tomorrow,” Mr. Rangel said early Thursday after meeting with House Speaker Nancy Pelosi, California Democrat, and other leaders. “We hope to have the whole thing, as much as we can have (for the budget office) to be able to start working.” The budget referees must review the legislation before Congress can cast a final vote and send the bill to Mr. Obama.

On the high-cost-insurance tax, officials familiar with the negotiations said Wednesday that options being considered to lessen the impact on union members included raising the threshold at which the tax would be levied — it’s $23,000 for family plans in the Senate-passed bill — and exempting collective bargaining agreements negotiated before 2013 from the tax.

Under that scenario the tax wouldn’t hit until union contracts were renegotiated, delaying its impact on most union health plans until perhaps 2015 or 2016. There was also discussion of lessening the impact of the tax in high-cost regions of the country, where insurance premiums cost more, by imposing the tax on a sliding scale.

Mr. Obama and Democratic leaders spent all day Wednesday working intensely to resolve differences between the House and Senate versions of the legislation, which would expand coverage to more than 30 million people now uninsured, bar insurers from denying coverage to people with medical problems and attempt to rein in ruinous increases in health care costs. Mr. Obama and senior Democrats emerged from the marathon talks late Wednesday with a declaration that they had made tough gains but no deal just yet.

Negotiators were to meet again Thursday at the White House, and Mr. Obama planned to go to Capitol Hill to make a personal appeal to House Democrats, who are being asked to make major concessions.

Public support for the health care remake continues to drop, perhaps in part because of the messy debate in Congress, and lawmakers are feeling the pressure of other issues, from unemployment to ballooning budget deficits. In Massachusetts, the race to fill the seat of the late Sen. Edward M. Kennedy is turning into a referendum on the health care overhaul, with Republicans hoping to capitalize on voters’ misgivings.

House Democrats are uneasy over concessions they are being asked to make to preserve the 60 votes needed to pass the bill in the Senate. That includes dropping the government-run insurance option liberals have fought for and accepting some form of the high-cost health-insurance-plan tax.

House Democratic leaders are pushing for more generous subsidies to help make health insurance affordable to a greater number of middle-class households, as well as other concessions.

To help pay for that, Democrats want health care providers to bear more of the cost, said lobbyists speaking on condition of anonymity because conversations within the industry were confidential. One said Democratic proposals include adding $10 billion to the $80 billion over 10 years that the drug industry had agreed to contribute, and raising the $20 billion in Senate-approved fees imposed on medical- device manufacturers by $10 billion.

Susan Feeney, spokeswoman for the American Health Care Association, said Wednesday that White House and Senate officials recently have asked the nursing-home industry to agree to additional concessions.

Rep. Frank Pallone Jr., New Jersey Democrat and a senior member of the Energy and Commerce Committee, predicted Thursday that despite numerous complaints from rank-and-file House Democrats about losing liberal priorities in deference to a handful of Senate moderates, the House ultimately would sign off on the deal taking shape at the White House.

House leaders “clearly go to the White House knowing what is acceptable to the caucus, so I think that once that is negotiated with the caucus’ views in mind, it should be something that the caucus will accept and would pass.”

“The goal is to get it finalized and voted on in the next few weeks,” Mr. Pallone said.

The House and Senate passed the bills with just one Republican vote, and the GOP was not invited to the White House talks. Republicans say they still have a chance to derail the bill.

Associated Press writers David Espo, Alan Fram and Sam Hananel contributed to this report.

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