Senate Finance Panel Passes Health Reform

From left to right, Sen. Kent Conrad, D-N.D., Sen. Jay Rockefeller D-W.V. and Chairman of the Senate Finance Committee Sen. Max Baucus, D-Mont. applaud as they near the conclusion of a hearing on heath care reform legislation on Capitol Hill in Washington, in this Oct. 2, 2009 file photo. AP Photo/Pablo Martinez Monsivais

Updated at 5:25 p.m. ET

President Obama's plan to remake the nation's health care system is one step closer to reality after the pivotal Senate Finance Committee approved sweeping legislation Tuesday requiring nearly all Americans to purchase insurance and ushering in a host of other changes to the nation's $2.5 trillion medical system.

The committee approved the measure by a vote of 14 to 9, with all Democrats supporting it, along with one Republican - Sen. Olympia Snowe of Maine.

"Ours is a balanced plan that can pass the Senate," Committee Chair Max Baucus (D-Mont.) said Tuesday before the vote. "Our bill should win the support of Republicans and Democrats alike... My colleagues, this is our opportunity to make history."

Baucus ultimately failed at winning any more than one Republican vote, even after marathon negotiating sessions.

Republican Sen. Orrin Hatch (R-Utah) called the vote another step toward the "flawed solution... of more spending, more government and more taxes."

Snowe cautioned that her vote for the committee bill did not indicate she would support the Democrats' final plans.

"I [support the committee bill] with reservations because I share my Republican colleagues' trepidation about what will transpire on the Senate floor" and later on in the legislative process, Snowe said. Still, she said she would vote for the measure because "when history calls, history calls."

She urged her colleagues to "contemplate the decades of inaction that has brought us to these crossroads."

Much work lies ahead before a bill can arrive on Mr. Obama's desk, but the action by the Finance Committee still marks a significant advance.

CBSNews.com Special Report: Health Care

Four other congressional committees acted before August to pass health legislation, so for months all eyes have been on the Finance Committee, the remaining one. It's also the panel whose moderate makeup most closely resembles the Senate as a whole. And the committee's moderate legislation is seen as the best building block for a compromise plan that could find favor on the Senate floor.

Speaking from the White House Tuesday afternoon, Mr. Obama praised the committee for reaching a "critical milestone." Despite "significant details and disagreements" to work out, he said the bill "has brought us significantly closer to achieving the core objectives I laid out" for reform.

"I want to particularly thank Sen. Olympia Snowe for both the political courage and seriousness of purpose that she has demonstrated throughout this process," the president said.

By supporting the Democratic measure Tuesday, Snowe may be risking her chance of earning a new Republican leadership position, according to reports. She is next in line to serve as the top Republican on the Commerce, Science and Transportation Committee when the current senior Republican, Sen. Kay Bailey Hutchison (Texas), leaves the Senate to run for governor. The other Republicans on the committee may choose someone else to serve as the ranking member, however, because of Snowe's health care vote.

Senate Minority Leader Mitch McConnell said in a statement that Snowe called him Tuesday morning to notify him she would vote for the bill in spite of her reservations.

"I share her concerns about the direction of this bill once it leaves the committee, and her call for transparency before we vote to proceed to any bill on the floor," McConnell said.

Snowe said today she would not support a motion to proceed with health care legislation on the Senate floor until a cost estimate of the final bill were posted online.

The bill includes consumer protections such as limits on co-pays and deductibles and relies on federal subsidies to help lower-income families purchase coverage. Insurance companies would have to take all comers, and people could shop for insurance within new state marketplaces called exchanges.

Medicaid would be expanded, and though employers wouldn't be required to cover their workers, they'd have to pay a penalty for each employee who sought insurance with government subsidies. The bill is paid for by cuts to Medicare providers and new taxes on insurance companies and others.

Unlike the other health care bills in Congress, Baucus' would not allow the government to sell insurance in competition with private companies, a divisive element sought by liberals.

"To cut costs we must have a public option in the final bill," Sen. Chuck Schumer (D-N.Y.) said. He added, "This is clearly not anyone's ideal bill, but it is a good bill."

While the Congressional Budget Office has predicted the bill would ultimately save the government money, other Democrats reiterated Schumer's point that the bill is far from perfect.

Sen. Ron Wyden (D-Ore.) pointed out some middle-income families would have to spend $13,000 on health care before qualifying for subsidies.

"Those middle class families are going to seek an exemption [from the proposed requirement to acquire insurance] given those costs and be uninsured," he said.

The bill would leave about 25 million uninsured by 2019, the CBO estimates.

"This bill does not go far enough to protect vulnerable populations," Sen. Jay Rockefeller (D-W.V.) said.

Last-minute changes made subsidies more generous and softened the penalties for those who don't comply with the proposed new mandate for everyone to buy insurance. The latter change drew the ire of the health insurance industry, which said that without a strong and enforceable requirement not enough people would get insured, and premiums would jump for everyone else.

America's Health Insurance Plans commissioned a study to prove just that, alleging the bill would add thousands of dollars to a typical policy. Democrats and their allies scrambled Monday to knock down the report -- the White House called it "distorted and flawed," and AARP's senior policy strategist, John Rother, called it "fundamentally dishonest."

"The insurance industry ought to be ashamed of this report," Sen. John Kerry (D-Mass.) said Tuesday.

The insurance industry report was timed just ahead of the vote on Baucus' bill, but the industry was already looking ahead to negotiations on a final package to bring to the Senate floor.

Now that the Finance Committee has acted, the dealmaking can begin in earnest with Senate Majority Leader Harry Reid, D-Nev., working with White House staff, Baucus and others to blend the Finance bill with a more liberal version passed by the Health, Education, Labor and Pensions Committee.

A major question mark is whether Reid will include some version of a so-called public plan in the merged bill. Across the Capitol, House Democratic leaders are working to finalize their bill, which does contain a public plan, and floor action is expected in both chambers in coming weeks. If passed, the legislation would then go to a conference committee to reconcile differences.

See below for a look at the health care bill's progress so far on Capitol Hill and the road ahead. For more, visit CBSNews.com's Health Care Progress Report.

(CBS)

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