House panel pushes health bill to brink of passage

WASHINGTON -- After a bruising struggle, Democrats pushed sweeping health-care legislation to the brink of passage in a key congressional committee Friday, clearing the way for a September showdown in the House on President Barack Obama's top domestic priority.

As part of a last-minute series of changes, the Energy and Commerce Committee agreed to limit increases in the cost of insurance sold under the bill, and also to give the federal government authority to negotiate directly with drug companies for lower prices under Medicare.

The new provisions were part of an intensive effort Democrats have made in recent days to satisfy the conflicting demands of liberals and conservatives on the panel. "We have agreed we need to pull together," said Rep. Henry Waxman, D-Calif., the committee chairman.

The measure is designed to extend health insurance to millions who now lack it, at the same time it strives to slow the growth in medical costs nationwide -- Obama's twin goals.

In the run-up to final approval, the panel handed the drug industry a victory, voting 47-11 to grant 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. The decision was a setback for the White House, which had hoped to give patients faster access to generic versions of costly biotech medicines like the blockbuster cancer drug Avastin.

Democrats also turned back a Republican bid to strip out a provision allowing the government to sell insurance in competition with private industry. The vote was 31-28, reflecting the narrow working majority Democrats had on a committee with 59 members.

Passage would clear the way for a vote in the full House on Obama's drive to remake the face of health care once lawmakers return from a five-week vacation.

The pace is far slower than the White House or Democratic leaders had hoped, but still faster than in the Senate.

There, Democrats said a deadline of Sept. 15 had been imposed on marathon talks aimed at producing a bipartisan compromise. Several officials said Sen. Max Baucus, D-Mont., had informed fellow senators he intends to convene his Finance Committee to begin voting by then.

Without a bipartisan bill, Baucus would presumably have to produce a measure tailored to Democratic specifications, a step he has said repeatedly he would rather avoid.

It wasn't clear how much the deadline was Baucus' idea, and how much it reflected growing impatience at the White House and on the part of Senate Majority Leader Harry Reid of Nevada.

The Energy and Commerce Committee was the third of three House panels to act on the legislation, a measure that numerous lawmakers note would rearrange one-sixth of the nation's economy.

Under the bill, insurance companies would be required to sell coverage to all seeking it, without exclusions for pre-existing medical conditions. The federal government would provide subsidies for lower-income families to help them afford policies that would otherwise be out of their reach.

The bills would set up so-called exchanges, in effect national marketplaces where consumers both with and without subsidies could evaluate different policies and choose the one they wanted.

The main expansion of coverage would not come until 2013 -- after the next presidential election.

Even so, the political stakes are enormous for Obama and the Democrats as they strive to pass legislation that has proven elusive for years. Republicans are overwhelmingly opposed to the approach they chose, and outside groups on both sides of the issue arranged a heavy dose of television advertising over August.

"Let me assure you: There will be a health care reform bill passed and it will make a big difference in the lives of the American people," Speaker Nancy Pelosi, D-Calif., said in an interview.

But the House Republican Leader, John Boehner of Ohio, countered that "Democrats are in for a long, hot summer once they return to their congressional districts, where Americans are lining up in opposition to a government takeover of health care. "

On a vote that crossed party lines, abortion opponents failed in an attempt to bar insurance plans that offer abortion services from accepting customers with government subsidies. The vote was 31-27.

On Thursday night, the panel agreed on a provision saying the government could neither require nor prohibit abortion services in insurance plans sold in the exchange.

Waxman's announcement of a series of last-minute changes capped a tumultuous period that began more than two weeks ago when conservative and moderate Democrats on the panel sought changes.

Needing their votes, Waxman began negotiations that grew to include Pelosi and White House Chief of Staff Rahm Emanuel. An agreement at midweek excluded more businesses from a requirement to offer insurance to their workers and reduced subsidies for lower-income uninsured.

It also swiftly triggered a counter-revolt among liberals, who demanded the subsidies be restored in full.

The final deal accommodated them without sacrificing the concessions made earlier to the conservatives, and included numerous other provisions.

Insurance plans sold in the exchange would need government approval before increasing premiums by more than one and half times medical inflation. The Bureau of Labor Statistics calculated that medical prices rose at an annual rate of 3.6 percent annually for the three months ending in June.

The provision giving the federal government the right to negotiate for better drug prices under Medicare has long been a goal of Democrats who say it could lower costs for seniors. Critics argue that is unlikely unless Congress also limits the drugs than can be sold, thereby giving the government the ability to play one company off against another.

That has long been viewed as politically unfeasible under Medicare, because it would limit the choice that seniors now enjoy.

But including restrictions in the government health insurance option would place it in line with Medicaid, the government program for the poor, as well as the Department of Veterans Affairs and many private plans that limit drug choice.

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Associated Press writer Ricardo Alonso-Zaldivar contributed to this report.