By Kristin Jensen and James Rowley

WASHINGTON – The biggest overhaul of America’s medical system since Medicare took a big step forward Saturday night, narrowly passing the House with a controversial amendment to restrict coverage of abortion.

The bill passed 220-215, with 39 Democrats voting no and one Republican, Rep. Joseph Cao (R-La.), voting in favor of the landmark bill.

House Speaker Nancy Pelosi was forced to allow the abortion amendment after a deal with conservative Democrats collapsed and they threatened to sink the reform bill.

The move enraged liberals, but most agreed to stay on board and President Obama traveled to the House to make a personal appeal and seal the deal.

Pelosi hailed the progress as delivering on the promise of Obama’s election.

“President Obama’s leadership gives our nation hope,” she said. “Today, with this legislation, we will give them health.”

The bill proposes to spend $1.055 trillion to add 36 million Americans to the insurance rolls, largely paid for with a 5.4% surtax on the top 0.3% of earners and cutting Medicare Advantage programs.

It would create an exchange where small businesses and the uninsured could buy coverage, including a government-run public option. The abortion amendment bars anyone who gets federal subsidies from abortion coverage. The public option does not cover any elective abortions.

Under the bill, no insurance company could consider preexisting conditions, out-of-pocket expenses would be capped, there would be no co-pays for preventive care and the so-called “donut hole” would be closed in Medicare prescription drug coverage.

“This is the most important legislation I’ve voted on in my 21 years in Congress,” Bronx Rep. Eliot Engel said.

Republicans argued the measure is too expensive, too tax-heavy, and a threat to jobs and American freedom.

Liberals savaged the anti-abortion provision. “This amendment threatens the health and rights of women to seek a legal procedure,” said Westchester Rep. Nita Lowey, calling it “unnecessary and reprehensible.”

But pro-choice Democrats voted for the overall measure anyway, helped along by Obama, who implored them to be on the “right side of history” and invoked the shootings at Fort Hood in his emotional appeal.

“He was absolutely inspiring. In a very moving way, he reminded us what sacrifice really is,” said Rep. Rob Andrews, a New Jersey Democrat.

“It made a lot of people feel a little less sorry for themselves about their political problems.”

A $61 billion GOP substitute bill failed after Democrats mocked it, noting that non-partisan number crunchers found it did little to help people get insurance.

Democrats win key victory on health care

(11-07) 04:00 PST Washington - — President Obama and House Speaker Nancy Pelosi achieved a stupendous – but still incomplete – victory Saturday, winning House passage of the biggest expansion of health care coverage since Medicare’s creation in 1964, in the face of nearly unanimous Republican opposition.

As a matter of policy and politics, the 10-year, $1.05 trillion legislation, which passed 220 to 215 late Saturday night, is among the most complex and difficult Congress has ever considered. Enactment would prove the signal achievement of Pelosi’s speakership. Success or failure will define Obama’s presidency. In the hours before the vote, Obama traveled to Capitol Hill to urge fellow Democrats to answer a “call to history” and fulfill last year’s voter mandate for change.

“This bill is change that the American people urgently need,” Obama said Saturday in a Rose Garden speech. “This is their moment, this is our moment to live up to the trust that the American people have placed in us – even when it’s hard; especially when it’s hard.”

Yet for all its significance, House passage would be but one step along a path to a White House signing ceremony that remains fraught with uncertainty. Senate action has stalled, and if it restarts, a long debate could widen already deep differences between the two chambers over new taxes and mandates on individuals to buy coverage and employers to offer it.

The House bill promises to expand coverage to 96 percent of Americans, but many key provisions, including a new insurance exchange where those without insurance could choose between a government option or private plans, would not take effect until 2013, after next year’s midterm elections and after the 2012 presidential election.

In the interim, those denied insurance due to pre-existing conditions would have access to a government-subsidized high-risk pool. A potentially unpopular requirement that individuals buy insurance would also not begin until 2013.

Part of the delay is due to the complexity of implementing changes to a $2.6 trillion industry that consumes $1 of every $6 Americans spend; part is due to budget maneuvering that delays expenditures to meet Obama’s pledge not to add to the burgeoning federal deficit within a 10-year budget window.

Pelosi spent months in tense negotiations to knit together the wide ideological spectrum of her caucus, from Bay Area liberals who insisted on a public option to moderate Democrats from GOP-leaning districts wary of rising deficits. Moderates succeeded in watering down the public option by untethering it from Medicare, and won a 240-194 vote on an amendment to expand a ban on public funds being used for abortion. Liberals accepted the amendment rather than bring down the entire bill.

Rep. Pete Stark, D-Fremont, a longtime advocate of a single-payer system run by the government, spoke to the House accompanied by his two young children, Hannah and Andrew. “At my age, I’ve learned to take what you can, when you can get it,” he said.

Pelosi could afford to lose up to 40 Democrats and still prevail, and for some members from very conservative districts a yes vote would have been political suicide.

Rep. Mike Thompson, a moderate Blue Dog Democrat from St. Helena, said his constituents are divided, with about 60 percent for the bill, 30 percent against it and about 10 percent wanting a single-payer system.

Asked if he’s gotten any complaints from constituents, Thompson said, “I’ve been getting blowback for 19 years about the health care system we have. I’ve been working my entire time in elected office trying to fix it.”

Republicans – who led a “tea party” protest at the Capitol on Thursday – blasted the bill as a “job killer” filled with new taxes and mandates, the wrong prescription for the economy when the national unemployment rate is more than 10 percent.

Waiting until a week before the vote, Republicans offered a much slimmer alternative that would barely expand coverage, but would seek to lower premiums through market-based mechanisms such as allowing insurance companies to sell policies across state lines.

Just one Republican voted for the Democrats’ bill, Anh “Joseph” Cao, a Vietnam immigrant from Louisiana. All but Cao continued a GOP boycott of the Obama agenda that began with last fall’s $787 billion fiscal stimulus. Republicans hope to tap growing displeasure with federal deficits and unemployment among independent voters, who last week handed the GOP big gubernatorial victories in Virginia and New Jersey.

The health care bill meets a key test of reducing deficits under Congressional Budget Office guidelines, through a combination of a 2.6 percent surtax on individuals earning more than $500,000 a year and cuts to private insurance companies under the Medicare Advantage program, along with reduced payments to doctors and hospitals. Democrats removed a $210 billion increase in payments to doctors and hospitals to achieve what many experts believe is a phantom budget neutrality.

Experts also believe the legislation is too timid in its attempts, mainly limited to pilot programs, to attack the rise in overall health care costs that is driving premiums skyward. A notable exception is a provision Pelosi granted to Rep. Ron Kind, D-Wis., that could force changes to the fee-for-service payment method that rewards physicians for the quantity of services they deliver, a major factor in rising costs.

Democrats emphasized coverage expansions and the new security promised to millions whose employment-based coverage is threatened by rising premiums. The legislation would also impose new regulations on insurance companies, banning such practices as cancellation of policies when people get sick, and strip the industry of its antitrust exemption.

House Democrats Pass Landmark Healthcare Bill with Lone GOP Vote

WASHINGTON – The House of Representatives Saturday approved the most sweeping healthcare legislation since the creation of Medicare 44 years ago and gave an important boost to President Obama’s campaign to guarantee health coverage to all Americans for the first time in history.

The gargantuan Democratic measure passed 220-215 with a single Republican vote, capping a contentious day-long debate that underscored the vast ideological divide separating the two parties over healthcare.

The bill includes an 11th hour compromise that would prohibit federally subsidized insurance plans from offering abortion services.

Although the Senate is still working on its healthcare bill, the House vote meant Democrats had cleared a critical hurdle – and reached a historic landmark: The party has been trying to extend the government’s social safety net to include healthcare since the Great Depression.

The House plan would cover an additional 36 million people by 2019, leaving 4% of the nation without coverage, compared with the estimated 17% who do not have insurance now, according to the nonpartisan Congressional Budget Office.

“For generations, the American people have called for affordable, quality healthcare for their families. Today, the call will be answered,” said Pelosi, who rallied her members behind the legislation after weeks of cajoling and deal-making.

Republicans, who have fought Obama’s healthcare campaign for most of the year, charged Democrats with pushing the nation toward government-run healthcare and threatening to bankrupt the treasury at a time when the deficit is skyrocketing.

“People have a grave concern about what Washington is doing to them, not for them,” Virginia Rep. Eric Cantor, the No. 2 House Republican, said Saturday, citing last week’s GOP electoral victories in Virginia and New Jersey.

Louisiana Rep. Anh “Joseph” Cao was the only Republican to cross the aisle and vote for the bill. Thirty-nine Democrats voted against it.

The legislation – which includes more than $1 trillion of new healthcare spending over the next decade while also reducing the deficit by an estimated $106 billion – will ultimately have to be reconciled with the Senate bill.

Senate Majority Leader Harry Reid (D-Nev.) is working to unite his members in time to hold a vote on the Senate bill before Christmas, a critical deadline if Democrats are to send healthcare legislation to Obama’s desk by the end of January.

With the unemployment rate continuing to rise and the public increasingly jittery about Obama’s healthcare campaign, Democrats are racing to push through an overhaul before what many see as a historic opportunity slips away.

Pelosi had hoped to get a bill through the House sooner than November. But she and her lieutenants had to spend months hammering out a series of difficult compromises to satisfy the liberal and conservative wings of the party.

New requirement on businesses and insurance companies have already alienated major industry groups, many of which actively fought the House bill, charging that it would actually make healthcare less affordable.

“The country … needs to put in place a strategy to reduce medical costs, which are 50 percent higher than in any other industrialized country,” America’s Health Insurance Plans warned in a letter last week to leaders of the House.

But even as opposition to the bill has stiffened, Democratic leaders managed to diffuse major disagreements over the shape of a new government insurance plan and the scope of new income taxes on wealthy Americans.

They picked up major endorsements from the AARP and the American Medical Association, which joined a collection of leading consumer groups, patient groups and labor unions that have backed the healthcare campaign all year.

And facing the possible collapse of the legislation late Friday night, they brokered a deal to settle a debate within Democratic ranks over abortion.

Under pressure from a group of socially conservative Democrats and the U.S. Conference of Catholic Bishops, Pelosi and other lawmakers who favor abortion rights were forced to accept a last minute compromise that placed tight restrictions on federal funding for abortion services.

The amendment was added to the bill Saturday by a coalition of 240 Republicans and conservative Democrats; 194 Democrats voted against the amendment.

The move outraged many liberals. But in the end, just enough rallied behind the bill after a furious several days of lobbying by party leaders, including the president.

“There comes a time (when) men must act according to the dictates of their conscience and not according to political expediency,” Civil Rights era veteran Rep. John Lewis (D-Ga.) said on the House floor. “We have a moral obligation to lead this nation into a new era where healthcare is a right and not a privilege.”

Obama, too, called on lawmakers to seize the moment, reminding them during a midday visit to Capitol Hill of the party’s successful fights to create Social Security and Medicare.

“If we do not get it done this year, we will not get it done anytime soon,” the president said at a closed door meeting, according to a senior Democratic aide who was in the room.

The more than 2,000-page legislation is designed to largely preserve the current employer-based healthcare system in which most Americans get insurance through work.

But the bill would also dramatically expand federal regulation of healthcare and provide more than $1 trillion in new healthcare aid to poor and middle-class citizens, embodying the Democratic belief in a government safety net.

Federal law would for the first time require insurance companies to cover all Americans, regardless of their health status, and would prohibit insurers from denying coverage to people who become sick.

Individuals would be required to buy insurance. And large employers would have to provide their employees with health benefits or face a penalty.

The bill would open the nation’s 44-year-old Medicaid insurance program for the poor to all Americans making less than 150% of the federal poverty line — $16,245 for an individual or $33,075 for a family of four.

The government would also create entirely new insurance marketplaces for millions of Americans who do not get coverage through work.

Commercial insurers, as well as the government, would offer plans in these marketplaces, or exchanges, and be required to provide a minimum set of benefits , including mental health services, maternity care and preventive care.

The most expensive feature of the new bill is a new commitment by the federal government to provide nearly $600 billion in subsidies over the next decade to help millions of low- and moderate-income Americans buy insurance in an exchange.

The Democratic bill is also designed to give relief to small businesses, providing some $25 billion in tax subsidies to help them offset the cost of offering their employees health benefits.

And the legislation would make prescriptions more affordable by closing the Medicare drug coverage gap, known as the “doughnut hole.”

The major expansion in federal assistance to tens of millions of Americans is not without a cost.

To pay for their legislation, Democrats approved a new surtax on wealthy individuals making more than $500,000 a year and couples making more than $1 million.

The bill would also cut more than $400 billion from Medicare payments to hospitals, nursing homes and insurance companies that provide Medicare Advantage plans, a provision that proponents hope will ultimately help make the system more efficient.

House approves historic health care reform legislation

After six months of town hall meetings, debates, studies, lobbying and negotiations, the House approved historic legislation Saturday that would fundamentally change American health care.

The vote was 220-215. Thirty-nine Democrats agreed with 176 Republicans and voted no.

The nearly 2,000-page bill isn’t law yet — the Senate is struggling with its version, which will have to be merged with the House bill before a final vote.

But Democrats were jubilant. “There are few moments when we have the opportunity to do so much good with one vote. This is one of those moments,” said Rep. Steny Hoyer, a Maryland Democrat.

The final vote was in doubt for much of the day. It took a visit to Capitol Hill by President Barack Obama — and a last-minute compromise allowing a vote on tougher restrictions on abortion funding — to persuade enough reluctant conservative Democrats to provide the margin of victory.

“When I sign this in the Rose Garden, each and every one of you will be able to look back and say, ‘This was my finest moment in politics,’ ” Obama reportedly told Democrats in the private meeting.

Republicans said they would continue to battle the measure.

“We are going to have a complete government takeover of our health care system faster than you can say, ‘This is making me sick,’ ” said Rep. Candice Miller, a Michigan Republican.

During the sometimes contentious debate, which lasted all of Saturday, GOP members repeatedly complained about the size and complexity of the measure, some feigning injury as they lugged a copy of the massive blueprint to the floor.

The bill is complicated, although many parts are well known. It requires almost everyone to get insurance, and for most employers to provide it. It expands subsidies for people too poor to afford coverage and sets up a public company to compete with private insurers. It raises taxes and cuts Medicare and prohibits insurers from denying coverage because of pre-existing medical conditions.

It would also provide health insurance to 96 percent of all Americans by 2019, according to the Congressional Budget Office.

But millions of Americans may soon learn how dramatically other, less familiar parts of the legislation would change virtually every part of the health care system, which now takes up 16 cents of every dollar in the U.S. economy.

The House bill:

•Creates a Health Choices Administration to oversee health care reform.

•Establishes a Health Benefits Advisory Council, chaired by the surgeon general, which will recommend an “essential benefits package” that people must buy and employers must pay for in part.

•Creates the Center for Quality Improvement to develop national priorities for improving health care delivery.

•Requires doctors, pharmacists, and other providers to disclose financial relationships with drug makers, equipment providers and other suppliers.

•Phases out the State Children’s Health Insurance Program, known as SCHIP, and moves families either into Medicaid or onto health “exchanges” to buy subsidized coverage.

•Doubles the penalty for withdrawing money from a health savings account to pay for non-health-related items.

•Prohibits different insurance rates for men and women of the same age.

•Allows drug makers exclusive rights to biologic drugs for 12 years before generic equivalents can be offered.

•Gives money to the states to experiment with plans to reduce malpractice lawsuits.

Republicans argued Saturday that all of these provisions were too complicated and too expensive. One — Rep. John Shadegg of Arizona — held a toddler in his arms as he criticized the bill.

“We can’t afford it,” said Rep. Lynn Jenkins, a Kansas Republican.

The GOP offered an alternative measure that was dramatically cheaper, according to the CBO, but would have actually increased the number of uninsured Americans by 2019. “This is a common-sense approach,” said Rep. John Boehner, an Ohio Republican.

The House rejected the Republican alternative, 258-176.

Democrats were able to avoid a collapse of the measure over the abortion issue, which has caused the leadership serious headaches in the past several days.

Rep. Bart Stupak of Michigan — a Democrat who opposes abortion rights — insisted on tougher language to prohibit use of subsidies and credits to purchase coverage that includes abortion services.

Early Saturday morning the House Rules Committee allowed Stupak to offer those tougher regulations as an amendment, prompting him and some other anti-abortion Democrats to drop opposition to consideration of the overall bill.

The Stupak amendment passed 240-194, with one member voting “present.” Liberal Democrats are expected to try and remove the amendment as the bill advances.

Republican Reps. Sam Graves and Jenkins voted for the amendment, as did Democratic Rep. Ike Skelton. Reps. Dennis Moore and Emanuel Cleaver voted no.

The final vote on the House reform package came as polls show increasing skepticism about health care reform. Since July, according to the Web site Pollster.com, a variety of surveys has shown a small but consistent majority opposing a health care overhaul.

The latest survey, from Ipsos/McClatchy, showed 49 percent of those questioned in late October were against the reform plan, while just 39 percent supported it.

The White House, which has called health care reform its top priority, pointed to recent endorsements from leading senior and physician organizations as a reason to support the plan.

“It’s crucial for the Obama administration,” said James Thurber, an expert on Congress at American University. “It’s the first big step for a very tough bill.”

That, in turn, has raised the stakes for Republicans and reform opponents, who long ago closed ranks against the measure.

Several thousand opponents from around the country descended on Capitol Hill last week under the banner of the tea party movement, shouting, “Kill the bill.”

Michael Franc, vice president of government relations at the Heritage Foundation, a conservative think tank, noted that by the government’s own accounting the bill would put Washington on the hook for more than half of the nation’s health care spending in less than a decade.

“The House bill clearly equals a government takeover of our health care sector,” he said.

Republicans in the Senate said Saturday they would step up efforts to stop the reform effort on the other side of the Capitol. Senate rules make it easier for the minority to block legislation, and some vowed to use those rules in the weeks ahead.

Should health reform eventually get through the House and Senate and to the president’s desk, though, experts said Democrats might reap political benefits.

“It’s pretty significant,” said John Holahan, director of the Health Policy Research Center at the nonpartisan Urban Institute, speaking about the House bill. “Nobody’s going to get a bill that they like every aspect of. It would do the country a lot of good.”

Read more HERE

Pelosi has the votes

POLITICO reports:

Hours before an expected vote on a sweeping health care bill, House Democrats believe they’ve secured the 218 votes they need to approve the bill, several party insiders said.

House Speaker Nancy Pelosi took to the House floor about 6:30 p.m. to say, “Today we will pass the Affordable Health Care for America Act.. . .We will make history. We will also make progress for America’s working families.”

Thirty-two Democrats have publicly declared their opposition to the bill, giving party leaders the narrowest possible margin to push the bill across the finish line. But numerous sources said Democrats believe they do have the votes after a day of intense lobbying of wavering Democrats.

FACTBOX-Health company winners, losers in US House bill

 WASHINGTON, Nov 7 (Reuters) - The U.S. House of
Representatives voted 220-215 on Saturday to pass legislation
overhauling the nation's $2.5 trillion health care system.

 The Senate must also vote on its version of a bill, which
is not expected until December at the earliest, and both
chambers would then meet to work out a final measure.

 Following are some of the winners and losers in the U.S.
healthcare industry based on language in the House bill.

 LOSERS ...

 HEALTH INSURERS

 Health insurers such as UnitedHealth Group Inc (UNH.N),
Cigna Corp (CI.N) and others could see greater competition,
more scrutiny and fewer protections under the bill.

 The sector has said it would take a big hit from a
government-run insurance plan that Democrats say would force
insurers to streamline. Cooperative exchanges and the sale of
insurance plans across state lines also aim to give consumers
more information and choices that could redefine the market.

 Profit margins could also shrink with the bill, forcing
insurers to give customer rebates if less than 85 percent of an
enrollee's premiums are spent on actual care.

 The public plan itself could also undercut insurers by
paying doctors, hospitals and others rates as low as those
offered by the Medicare plan for the elderly and disabled. Rate
hikes by private insurers would also be scrutinized.

 The bill also eliminates the exemption health insurers had
from antitrust laws, explicitly barring them from price fixing,
bid-rigging or dividing up markets.

 And while individuals would have to buy a plan or pay a fee
-- a move backed by insurers -- more smaller businesses would
be exempt from the requirement to offer coverage.

 Government reimbursement for private Medicare Advantage
health plans would also see cuts.

 DRUGMAKERS

 Drugmakers would take a larger hit under the House bill
than with another Senate version, which included an agreement
with the industry to provide $80 billion worth of savings over
10 years.

 The House version would require drug companies to pay
rebates to the government for drugs used by elderly and
disabled Medicare patients who also are on Medicaid, the health
program for the poor. It also would require the health
secretary to negotiate drug prices under Medicare.

 Drugmakers, which include Pfizer Inc (PFE.N),
GlaxoSmithKline Plc (GSK.L) (GSK.N), Merck & Co Inc (MRK.N) and
others, have opposed both ideas.

 The House bill would gradually eliminate the Medicare
"doughnut hole," when prescription drug costs are not covered,
by 2019. The drug industry had agreed to provide a 50 percent
discount for drugs in the doughnut hole over the next decade.

 ... AND WINNERS

 DEVICEMAKERS

 Lobbyists representing medical devicemakers such as Boston
Scientific Corp (BSX.N), Medtronic Inc (MDT.N) and Stryker Corp
(SYK.N) successfully whittled down an expected $4 billion
annual fee to $2 billion. The industry had wanted the fee
removed altogether.

 BIOLOGIC DRUGMAKERS

 Brand-name makers of biotechnology drugs would see their
medicines protected from cheaper copycats for at least 12
years. This is a win for the brand-name companies, such as
Amgen Inc (AMGN.O) and Roche Holding AG's (ROG.VX) Genentech
unit, and a defeat for generic drugmakers that want a shorter
period.