Committee Passes Baucus's $829 Billion Healthcare Bill

After two weeks of debate and a closely watched examination by the Congressional Budget Office , Sen. Max Baucus's healthcare bill has, for now, proved resilient. On Tuesday, after several final hours of debate, Baucus's Senate Finance Committee approved the bill by a 14-9 vote, as Maine Sen. Olympia Snowe, a moderate Republican, joined the committee's 13 Democrats in voting yes.

As Snowe rightly pointed out, Tuesday's vote is merely the first step of a process that will intensify in the coming weeks. Democrats now have to decide among themselves how they want to iron out conflicts between various wings of their party.

Up to this point, the success of the Baucus bill has rested largely upon its financial promises, mainly its pledge not to increase to the federal deficit.

It got a major boost last week when Congress's number crunchers, said it would in fact lower the federal budget deficit by $81 billion over the next 10 years. The bill's overall cost is $829 billion, significantly lower than the other bills floating around Congress.

For Baucus, that must have been a relief. In June, the first draft of his bill came in around $1.6 trillion, prompting him to slow down and, in effect, kill President Obama's hope of having a healthcare bill by the August recess. Now Baucus seems to have redeemed himself.

The CBO's numbers, however, are more than just bottom lines. The analysis gives an overview of what the bill will and won't do and hints at the debates that are expected over the next few weeks.

The $829 billion will be spent mainly in two ways. More than half will go to help lower-income people buy health insurance. Much of the rest—about $340 billion—will expand existing government programs that cover children and the really poor. In other words, the bill's costs are mainly associated with giving insurance to those who don't have it.

To pay for the bill, Baucus is looking in several places. He'll raise about $200 billion by taxing expensive insurance plans, and additional money by fining people who refuse to buy insurance. But the bulk of the money, more than $400 billion, will come from curbing government payments to hospitals and doctors who treat Medicare patients.

All of these ideas have advocates and detractors. For example, the bill sets up a Medicare Commission, an independent group made up of doctors and policy experts. If government spending on healthcare doesn't come down enough, the commission would be required to propose spending cuts, which would take effect automatically unless Congress stopped them. The bill prohibits the commission from cutting elderly people's benefits. But many Republicans warn that the commission could make changes that would eventually force people on Medicare to spend more of their own money for health coverage.

Now that the bill is out of committee, Senate Majority Leader Harry Reid will have to combine it with the Senate Health Committee's reform bill. Perhaps the biggest question Reid faces is the fate of the public option. Baucus, in his plan, opted for "healthcare cooperatives" instead of the public option, saying that co-ops would provide the same competition to the private insurance market. But the CBO isn't buying it. "The proposed co-ops had very little effect" on its estimates, it wrote, "because . . . they seem unlikely to establish a significant market presence in many areas of the country." That should give liberal Democrats something to talk about.

In fact, this morning, Sen. John Kerry reiterated that liberal Democrats will continue to fight for the public option. Kerry lashed out a new study, released Sunday by the insurance industry, claiming that the Senate Finance bill will raise insurance costs. The study, prepared by Pricewaterhouse Coopers, has been heavily criticized by experts who say it ignored important parts of the bill, and Kerry took his criticism a step further.

"It's extraordinary that in the final hours of this effort, as we come to a vote, that the industry remains right where it's remained all along," Kerry said. "There is your argument right there [for a public option]...and it's one we are going to make on the floor."

• See photos of anger at healthcare town hall meetings.
• Read 10 Things You Didn't Know About Olympia Snowe.