What It Means for House Democrats to Adopt the Senate Health Bill

First of all, take all the weeks of merger negotiations and throw them out the window: It’s looking more and more like the only way the Democrats can pass health care reform — and they must pass health care reform — in the wake of yesterday’s election in Massachusetts is to have the House take up the Senate-passed bill.

Sure, there are House Democrats who are choking on that very thought — folks like Rep. Anthony Weiner (N.Y.), who thinks parts of the bill are too conservative, and Rep. Bart Stupak (Mich.), who thinks other parts are too liberal. But the alternative is to have Democrats take to the campaign trail this year with the following message: “Yes, Congress spent most of 2009 haggling over health care as unemployment leapt, but it was just too hard to get the thing passed.” Not exactly the inspirational bulletin that wins elections.

Which leaves the question: What exactly would House Democrats be forced to swallow if they agree to adopt the Senate bill as it stands? A few biggies:

Funding: A central disagreement between House and Senate Democrats has been how to pay the tab of covering tens of millions of uninsured Americans. House leaders proposed a 5.4-percent tax hike on those earning more than $500,000 per year, while the Senate bill proposed a 40-percent tax on high-cost insurance plans. The loser here is the labor movement, which had recently negotiated a deal with Democratic leaders of both chambers to exempt union-negotiated plans from being hit by that tax for another eight years — a deal that would be nullified if the existing Senate bill becomes the final word. Even so, some of the labor leaders who pushed for that deal are already urging the House to pass the Senate proposal.

Illegal Immigrants: Members of the Hispanic Caucus lose big here. While both chambers have proposed to ban illegal immigrants from receiving subsidies on the exchanges, the Senate bill takes the strange step of also prohibiting those folks from paying full price for exchange coverage through U.S. companies using U.S. dollars. (The House bill would allow those unsubsidized purchases). The result? There will probably be more uninsured illegals making the emergency room their primary care stop — the very type of behavior that health reform was supposed to discourage.

Kids’ Care: At issue here has been the fate of the Children’s Health Insurance Program, the state-federal partnership that covers roughly 9 million low-income kids nationwide. The House has proposed to do away with CHIP at the end of 2013, while the Senate proposal would keep it alive and provide new funding through 2015. Many children’s welfare advocates, concerned that kids would lose coverage if they’re shifted to more expensive private plans on the exchange, prefer the Senate provision.

Abortion: Both the House and Senate bills include new restrictions on coverage of abortion among plans operating on the exchanges. The House provision, sponsored by Stupak, would prohibit such coverage on exchanges altogether; the Senate bill is a touch less strict, allowing abortion coverage but requiring women to write a separate check for those services to ensure that no federal funds go toward them. This allegedly leniency is the reason Stupak is threatening to vote against the Senate bill.

Anti-Trust: For more than six decades, the nation’s insurance companies have enjoyed an exemption to federal anti-trust laws, justifying the perk with the argument that sharing information encourages smaller companies to enter otherwise unknowable new markets. But critics say the exemption simply allows the companies to collude on pricing at the expense of competition. The House bill eliminates the anti-trust exemption; Senate leaders — bowing to Sen. Ben Nelson (D-Neb.), a former insurance company CEO — stripped that provision from their bill. Advantage: insurance industry.

That $80 Billion Pharmaceutical Deal: Hoping to get the nation’s drug makers to support health reform before the heavy negotiating began, Sen. Max Baucus (D-Mont.) made a pact last summer with the pharmaceutical lobby: If the drug makers put up $80 billion toward reform over the next decade, the deal went, Democrats would withhold support for a proposal allowing states to negotiate drug prices on behalf of their lowest income seniors. The White House quickly signed on, but House Democrats didn’t. Instead, Rep. Henry Waxman (D-Calif.) went ahead and included in the House bill the very provision that Baucus and Obama vowed to oppose. Adopting the Senate bill leaves the deal with Big Pharma intact. Advantage: Pfizer.

The Public Option: House liberals, behind Speaker Nancy Pelosi (D-Calif.), won a major victory in the lower-chamber bill by including a provision to create a national, not-for-profit insurance plan to compete with private companies. The Senate bill contains no such thing. This, on the surface, appears to be a big loss for House Democrats. But in reality, the merged bill would likely have dropped the provision anyways, because it doesn’t have the support of 60 senators.

All of this, of course, could change as the years go by and Congress dabbles at the edges of these provisions. But for the time being, it’s looking like the more industry-friendly Senate bill will form the backbone of health care reform.