Health care bill faces many obstacles

WASHINGTON -- The drive to remake the nation's health-care system suffered yet another setback in Congress yesterday when a pivotal group of House Democrats rebelled against leadership-backed legislation taking shape.

"We need to slow down and do it right," Rep. Mike Ross, D-Ark., said outside a meeting of the Blue Dog Coalition, a group of 52 moderate to conservative Democrats. "It needs to do a much better job of cost containment" within the health-care system, he added.

Other lawmakers said they were concerned about proposed tax increases, the rules on any government-sold insurance, and other issues key to President Barack Obama's call for sweeping legislation.

Ross said he believes no vote should take place until the fall -- well after a midsummer informal deadline set by House Speaker Nancy Pelosi.

The group met as Democrats on the House Ways and Means Committee were laboring to put the final pieces in place on a bill that the White House has praised. The party's leadership hopes to unveil it today and push it through committee next week.

The developments came as a similar midsummer timetable appeared in danger of slipping away in the Senate.

There, the Democratic leadership is intent on scuttling a proposed tax on health-care benefits that long has been key to attempts at a bipartisan compromise.

As an alternative, Democrats are considering raising taxes on wealthy investors to help pay for health-care legislation, along with numerous other options, according to officials who spoke on condition of anonymity. The proposal to extend the current 1.45 percent Medicare payroll tax to capital gains earned by high-income taxpayers would bring in an estimated $100 billion over 10 years.

Any bill that emerges is expected to follow Obama's blueprint for reining in health-care costs overall while extending coverage to 50 million people who lack it.

Another objective is to make sure that insurance companies no longer can deny coverage or raise premiums to unaffordable levels to individuals with pre-existing medical conditions.

But gaining a consensus even among Democrats is proving difficult, despite their large majorities in both houses.

Some Democrats are demanding legislation that permits the government to sell insurance in competition with private companies.

Republicans overwhelmingly oppose such a plan, deeming it a stalking horse for universal government-run insurance, and many Democrats have concerns as well.

Democrats are divided on paying for the bill, with some preferring more tax increases than others, and some favoring more cuts in Medicare and Medicaid.

Efforts to raise money to pay for subsidizing the cost of insurance had focused on a tax on health-care benefits for workers with high-cost coverage provided by their employers.

Republican supporters argued that it also would have tended to reduce the cost of health care overall, as well as offset the cost of the bill.

But the Democratic leadership stepped in forcefully, citing poor public polling, opposition of organized labor, and concerns about taxing middle-income workers.