As Congress prepares to pass the final health care reform legislation early next year, health care lobbyists are mobilizing legislatures in approximately 14 states to ratify constitutional amendments that would repeal all or parts of the new measure. “The states where the amendment has been introduced are also places where the health care industry has spent heavily on political contributions,” the New York Times notes:

Over the last six years, health care interests have spent $394 million on contributions in states around the country; about $73 million of that went to those 14 states. Of that, health insurance companies spent $18.2 million.

Overall, at least 21 states have indicated a desire to opt out of federal health care reform or block fundamental features of the reform bill, including mandatory health coverage. While Arizona, is the only state legislature to place an opt-out measure on the 2010 ballot, a significant number of gubernatorial and state legislature candidates across the country have also said that they are strongly “leaning towards” opting out of reform.

Lawmakers in Wyoming, New Mexico, Montana, Kansas, Texas, Pennsylvania, Utah, Virginia, Arizona, Alabama, Michigan, Missouri, Ohio, West Virginia, Louisiana, Alaska, Minnesota, North Dakota, Georgia Illinois and Florida have introduced ballot measures to protect their states from reform legislation or promised to spearhead such efforts if reform is enacted.

While it’s unlikely that conservatives and their health care industry allies could repeal health care reform, (they are more likely to water-down certain elements of reform), a successful challenge would devastate the populations suffering from the most pronounced health care crisis. A back-of-the envelope analysis conducted by ThinkProgress suggests that on average, the repealing states have experienced very substantial premium increases, high rates of uninsurance and annual percent growth in health care expenditures and higher insurance market concentration:

- 42% (9 of 21): have an uninsurance rate higher than the national average of 15.4%.

- 62% (13 of 21): have an average annual percent growth in health care expenditures that his higher than the national average of 6.7%.

- 62% (13 of 21): experienced premium increases of more than 75% between 2000 and 2007.

- 90% (19 of 21): are dominated by two insurers that control more than 50% of the health insurance market.

The effort to repeal health care reform “began at the conservative Goldwater Institute in Arizona” and was latter “picked up by the American Legislative Exchange Council [ALEC], a business-friendly conservative group that coordinates activity among statehouses.” As the New York Times points out, “five of the 24 members of its ‘free enterprise board’ are executives of drug companies and its health care ‘task force’ is overseen in part by a four-member panel composed of government-relations officials for the Blue Cross and Blue Shield Association of insurers, the medical company Johnson & Johnson and the drug makers Bayer and Hoffmann-La Roche.”

Earlier this month, Lee Fang reported that Joan Gardner, executive director of state services with the BCBS Association’s Office of Policy and Representation and a member of ALEC’s ‘task force’ “played a pivotal role in crafting this anti-health reform states’ rights initiative.”

Yesterday, Minority Leader Mitch McConnell (R-KY) refused to acknowledge that Republicans would campaign in future elections on a platform of repealing health reform, but former House Speaker Newt Gingrich predicted that Republicans would exploit the bill’s late implementation date to “run on an absolute pledge to repeal the bill“:

I suspect every Republican running in ’10 and again in ’12 will run on an absolute pledge to repeal this bill. The bill–most of the bill does not go into effect until ’13 or ’14, except on the tax increase side; and therefore, I think there won’t be any great constituency for it. And I think it’ll be a major campaign theme.

Watch it:

While the exchanges don’t go into effect until 2014, the Senate health care bill spends approximately $10 billion between 2011 and 2014 on interim benefits. The bill immediately prohibits insurers from rescinding coverage, imposing life-time or annual limits or denying coverage to children with pre-existing conditions. Applicants who are unable to find insurance in the individual market, can purchase catastrophic coverage and young adults can stay on their parents’ policies until their 27th birthday. Small businesses that provide health coverage will also be eligible for tax credits beginning in 2010.

The bill requires health insurers to spend 80 to 85 percent of all premium dollars on medical care and reduces the size of the coverage gap in Medicare Part D “by $500 in the first year.” The bill also guarantees “50 percent price discounts on brand-name drugs and biologics purchased by low and middle-income beneficiaries in the coverage gap.”

These benefits could also improve as the Senate bill moves into conference. Several House progressives have pledged to push the conference committee to move up the implementation date of the exchanges in the final bill and front load more benefits into the interim period of the final legislation.

The Catholic Health Association — which represents hundreds of Catholic hospitals across the country — said said in a statement that it was ‘encouraged’ and ‘increasingly confident‘ that the abortion compromise in the Senate health care bill “can achieve the objective of no federal funding for abortion.’” The announcement represents a break from the the United States Conference of Catholic Bishops’ strong opposition to the Senate’s less stringent restrictions and provides critical political cover for pro-life Democrats who are hesitant to vote for a bill opposed by Catholic organizations. Under the Senate measure, women are required to purchase abortion services with private premiums and pay for the care with a separate transaction. States could also prohibit insurers in the exchange from offering abortion services.

The NYT explains the theological underpinnings of the endorsement:

“The Catholic Health Association seems to be using traditional principles of cooperation with evil,” said Prof. M. Cathleen Kaveny of the Notre Dame University Law School. Such principles, she said, could permit support for “imperfect legislation,” as long as one’s intent was not to “further abortion,” one made every effort to “minimize the harm,” and one achieved “an extremely important good that can’t be achieved any other way.”

In contrast, she said, “some bishops have adopted a prophetic stand against abortion that wants to eliminate any form of cooperation with evil no matter how remote.”

Catholic hospitals (like any hospitals) hope to minimize the number of uninsured patients who receive uncompensated care and achieve the “extremely important good” of expanding health care coverage to everyone. Earlier this month, Ellen-Marie Whelan and Jessica Arons analyzed the Catholic Bishop’s criteria “that they set as priorities to be included in health reform legislation” and concluded that health care reform meets these self-imposed goals:

As our analysis shows, there are a number of ways both bills would achieve the Bishops’ “pro-life” goals: they would save the lives of thousands each year, reduce the suffering of millions, and increase the dignity with which people are treated when ill. Moreover, providing quality health care to women and families in need is a much more effective and humane way to reduce the number of abortions than restrictions on funding ever have been. In the United States, as throughout the world, restrictions on abortion make the procedure more expensive and less safe; they do not make it less common.

The question before any pro-life Catholic organization is this: “Is it worth jeopardizing legislation that would provide nearly universal access to health care, improve quality, be much more affordable, assist the poor and low income, reduce fraud and waste, protect the conscience of providers, and so much more simply because it would preserve the status quo on public funding for abortion but not impose new restrictions on private coverage?” Fortunately, the Catholic hospitals have decided that it is not.

Rep. Bart Stupak (D-MI), meanwhile, has responded to the hospitals’ endorsement by reiterating his opposition to the Senate language, arguing that he has commitments from at least 10 Democrats who voted for House health care bill to oppose the final bill if it doesn not reflect the House bill’s compromise.

Moments ago, the Senate passed a comprehensive health care reform bill by a vote of 60-39, ending more than four weeks of contentious floor debate.

“This morning is not the end of the process,” Reid reminded his colleagues and progressives dissatisfied with the Senate bill. “It’s only the beginning.” “We must strive for progress and not surrender for want of purity,” he said, promising to build on reform in the years to come.

The chamber erupted in laughter several times during the vote, most notably when Reid initially cast the wrong vote and Sen. Bernie Sanders (I-VT) missed the first round of roll call, running into the chamber in the middle of the vote.

Sen. Robert Byrd (D-WV), the longest serving Congressperson in the nation’s history, cast his vote saying, “Mr. President, this is for my friend Ted Kennedy. Aye.”

Watch the highlights:

Republicans opposed the bill. “I guarantee you the people who voted for this bill will get an earful, when they finally get home for the first time since Thanksgiving,” Minority Leader Mitch McConnell (R-KY) said. “This fight isn’t over…my colleagues and I will work to stop this bill from becoming law.”

Sen. Jim Bunning (R-KY) was the only senator who didn’t vote on the measure. The bill will now move into a conference committee where it will be reconciled with its House counterpart.

Sen. Harry Reid’s (D-NV) decision to replace the so-called Botox-tax in the Senate health care bill with a 10 percent levy on indoor tanning salons has sparked quite the outrage. Republican lawmakers, appalled at the idea of using spray tans to maintain those artificial orange glows for the C-SPAN cameras, stumbled and stuttered their way through an incoherent critique of the tax, demanding that Democrats “explain” the new fee and joking that that the government could tax “anyone who goes to the beach” or doesn’t wear sunscreen that blocks “everything that the sun might produce.” Victor Zapanta compiled this video:

In part, Republicans are just playing dumb. Over the summer, the International Agency for Research on Cancer “raised their warning of tanning beds from ‘probably carcinogenic to humans’ to ‘carcinogenic to humans,’” concluding that “the ultraviolet light used in tanning beds (as with the sun’s rays) has been shown to raise the risk of skin cancer.” “The report cited the group’s own research analysis published in 2006, finding the use of tanning beds before age 30 to be associated with a 75% increase in melanoma risk.”

Taxing the cancer causing activity would dissuade Americans from sliding under the UV rays, lower national health expenditures and improve quality of life.

Cross-posted on ThinkProgress.

On Monday, Sen. Joe Lieberman (I-CT) warned warned the House and Senate conference committee against significantly altering the compromises in the Senate bill. “This bill as it appears it will emerge from the Senate is delicately balanced,” he said. Sens. Kent Conrad (D-ND) and Max Baucus (D-MT) expressed similar concerns, arguing that to attract the 60 votes to cut off debate in the Senate, the final legislation would “have to be very close to the bill that has been negotiated here. Otherwise you will not get 60 votes in the United States Senate.”

Indeed, while the conferees are unlikely to adopt the House’s public option provisions or loosen the abortion compromise, the conference can strengthen the final legislation by adopting certain provisions from the House health care bill. These changes would improve the regulation of private insurers and provide Americans more affordable coverage and more coverage choices in the period between enactment and full implementation. Some proposals require no new expenditures of funds:

Yesterday, Sen. Ben Nelson (D-NE) took to the Senate floor to defend a provision in the Senate health care bill that requires the federal government to fully fund Nebraska’s Medicaid expansion. Nelson insisted that the deal “lay down” a marker “so that every state could object to this manner of unfunded mandates.” “There is no carve out. Each state between now and 2017…will have an opportunity to come back in and get this bill changed”:

As a governor — and my colleague is a former governor — we fought against federal unfunded mandates. And as a senator back here, I’ve also fought against unfunded and underfunded federal mandates. And this was in fact exactly that. While we weren’t able to get in this legislation an actual opt-out or opt-in for a state-based decision, what we did get was at least a line, if you will, so that in the future other states are going to be able to come forward and say, hey, either the federal government pays for that into the future or the state will have the opportunity to decide not to continue that so that we don’t have an unfunded federal mandate.

Watch it:

Nelson read from his correspondence with Nebraska Governor Dave Heineman, in which the governor asked that the state be protected from the unfunded mandate but later criticized the matching fund proposal. “On the 20th of December I again wrote to the governor,” Nelson explained. “I pointed out that within hours after the amendment was filed, my colleague from Nebraska objected to the inclusion of these funds. ‘As a result, I’m prepared to ask that this provision be removed from the amendment in conference if it’s the governor’s desire,” Nelson said.

Last night, Heineman told Fox News, “We’re embarrassed by what’s going on. We’re very surprised. Nebraskans are angry and upset about what occurred. And so they need to set this straight.”

This afternoon, in uncharacteristically impassioned and frank speech on the Senate floor, Sen. Max Baucus (D-MT) challenged “courageous” Republicans to “break from their leadership” and “work together to pass health care reform.” Baucus argued that the Republican party was more interested in winning seats during the 2010 election than offering sensible alternatives to the health care crisis and accused the Republican leadership of pressuring members of ‘Gang of Six’ to abandon bipartisan negotiations.

Sens. Snowe, Enzi and Grassley “wanted to pass health care reform,” Baucus insisted. “They asked very good questions,” but “one by one by one they started to drift away. They wanted to pass health care reform, they wanted to act in a bipartisan basis but they were pressured, pressured from their political party not to do it.”

At one point, Sen. Roger Wicker (R-MS) explained the unanimous Republicans opposition by suggesting that members of the Gang of Six wanted to support a compromise but “it dawned on them that my friends on the other side of the aisle wanted to Europeanize the health care system of the United States of America.” Baucus responded angrily. “I want to tell this Senator that is not what happened,” he shouted, waiving his index finger at Wicker:

I want to tell the Senator that that is not what happened. I was in the room constantly, constantly. I talked to those Senators many many times. That is not what happened. I”ll tell you what did happen. Your leadership pressured them, pressured them, pressured them not to work together. There is no European style effort in that room, that is a totally untruthful statement. Totally untruthful statement. None whatsoever….That assertion of working towards a European solution is entirely untrue. It’s entirely false.

Watch it:

“I just want the public to know that we worked very hard to get a bipartisan bill that side of the aisle started working with us but gradually they began to bleed politically,” Baucus said. They realized “that they would do a better chance in the 2010 elections by just not working with us, but just attack attack attack attack attack and try to score political points to defeat any honest effort to get health care reform.”

This morning, the Senate cleared series of procedural votes on the health care bill, clearing the way to passing reform on Christmas Eve. All 60 members of the Democratic caucus voted in favor of the three motions, suggesting that Republicans are waging a losing battle to delay the passage of reform.

In fact, given the inevitability of passage, a divide appears to be forming between Republicans who want to head home for the holidays, and those who wish to drag out the debate. Following today’s vote, Minority Leader Mitch McConnell (R-KY) suggested that he is ready to leave. McConnell announced that he is “working on an agreement that would give certainty to the way to end this session.” “Hopefully the two of us together can be recommending something that makes sense for both sides in the not too distant future,” he said. Watch it:

Since reaching 60 votes, Democrats have argued that the chamber waive the 30-hours of debate between each cloture vote, offering unanimous consent agreements to expedite the Senate schedule. But at least some Republicans are intent on running out the clock and staying until Christmas. “The flight I have is Christmas morning,” Sen. Robert Corker (R-TN) told reporters, “I don’t plan on changing that.” This morning on Washington Journal, Sen. John Barrasso (R-WY) also said, “I’m committed to stay here all the way through the final vote.”

Republicans will attend a 1pm caucus lunch today where they’ll decide whether or not to delay the vote until Christmas eve.

This evening, Sen. Joe Lieberman (I-CT) took to the Senate floor to “declare” his support for the health care bill and explain his opposition to the public option and the Medicare buy-in. Lieberman, who has previously insisted that the White House never pressured him to support the public plan, argued that the popular provision is “not necessary” and suggested that President Obama never advocated on its behalf:

The creation of a new government-run health care, so-called public option or the expansion of Medicare to people under 65 is not necessary. Neither proposal would extend coverage to one person who will not be benefited by the new provisions of this bill….I believe President Obama never said a public option was essential to the reform goals he set out to achieve and that most of us have. When the president spoke earlier this year to the joint session of Congress, he said that a public option is, and I quote — ‘an additional step we can take’ end quote. An additional step, he said, but not an essential one. And then he added, and I quote again — ‘the public option is only a means to that end’ end quote. And concluded that we should remain, and I quote again — ‘open to other ideas that accomplish our ultimate goal.’

Watch a compilation of Lieberman’s speech:

During his address, Lieberman delighted — without the slightest hint of irony — in the fact that the Senate bill would expand coverage to “31 million more Americans.” “We say that so often, I think we forget the power of it,” he said. “Thirty-one million people who don’t have health insurance today will have it after this bill passes. That is a giant step forward for our society.”

Lieberman also warned against changing the Senate bill in conference. “This bill as it appears it will emerge from the Senate is delicately balanced,” he said. “I hope there will be no attempt to reinsert a so-called public option in any form in the conference report. That would mean that I would not be able to support the report, and I want to support it.”

Over at Firedoglake, Jane Hamsher outlines 10 reasons to kill the Senate health care bill. The comprehensive list relies on the competent work of FDL’s team of health care bloggers and some of the critique is not without merit; other points are overstated. For instance, the claim that “many will be forced to buy poor-quality insurance they can’t afford to use,” is a bit baffling. The newly uninsured would have access to a minimum benefits package that is far more comprehensive than the available options in the individual market. Two-thirds of these “forced” Americans would pay less for more substantive coverage, not more. And the poorest Americans would have their out-of-pocket costs capped.

Hamsher claims that the bill “allows insurance companies to charge people who are older 300% more than others.” This is true, but it’s a massive improvement from the status quo, which allows insurers to charge older people as much a 11 times more for equivalent coverage. The 3:1 ratio may be excessive but it also recognizes that older people use more care than younger people and permits insurers to attract younger applicants with lower rates. Finally, the argument that “the cost of medical care will continue to rise,” also misses the point. National health expenditures will naturally increase, but under the Senate bill, they will raise at a slower rate.

On the whole, Hamsher is right to argue that the Senate bill is a deeply flawed piece of legislation which, as Paul Krugman observes, “we’ll spend years if not decades fixing it.” In fact, “with few exceptions, sweeping initiatives in the U.S. system start small, are often flawed, and then are expanded, sometimes improved, sometimes not.” Medicare began as smaller program that was expanded to cover “hospice benefits, mammograms and pap smears to detect cancer, and most recently, under the Republicans, prescription drugs.”

Fixing something that’s broken is better than not having anything to fix. Buying a fixer-up home is more appealing than remaining homeless for the next 10 to 20 years. In time, you’ll be able afford to change the tile in the bathroom or fix the leaky roof patch, but for the time being you’ll have a place to sleep, eat, and keep warm. A newer house would have caused less problems, but it — like the Senate health care bill — was simply out of reach.

The top 10 list isn’t reason to kill the bill, it’s reason to improve it in the years to come. After all, the choice isn’t between passing this bill or a better bill — it’s between passing this bill or nothing at all. Seen in this context, the Senate health care bill provides an adequate foundation for transforming the system in the years to come.

Here is a graphic representation of the choice lawmakers face:

This afternoon, on a press call with reporters, RNC Chairman Michael Steele suggested that the Democrats’ effort to pass the health care bill in the Senate was equivalent to flipping the bird to the American people:

STEELE: I mean, it just annoys and irritates me on something so fundamentally important. That this Congress, this leadership, is so tone deaf and so hell bent on propping up a policy that the American people doesn’t want, that they’re willing to basically flip the bird to the American people on this issue and slip it in in the dead of night.

Listen:

Of course, the only reason why Congress held the cloture vote at 1am this morning, was because Republicans filibustered the bill. Last night, Sen. Tom Harkin (D-IA) offered a unanimous consent agreement to move the 1am vote to 9am this morning if Republicans agreed to forgo the optional 30 hours of debate between each cloture vote and still pass the final legislation before Christmas. Sen. Mike Enzi (R-WY), who had also sternly criticized the early morning vote, objected to the measure.

While the public is weary of health care reform, public disapproval of health care reform intensified as progressives were forced to sacrifice liberal provisions to find common ground with more moderate lawmakers. As the bill became more conservative, public option began to wane. A recent CBS News/New York Times Poll found that while 50% of Americans disapprove of the way “Barack Obama is handling health care,” 59% favored “offering some people who are uninsured the choice of a government-administered health insurance plan.”

Moments ago, the Senate voted 60-40 to end the Republican filibuster of the manager’s amendment to the Senate health care bill, clearing an important hurdle to passing health care reform before the end of the year.

The Senators voted from their desks — a customary practice reserved for the most significant votes. Once the presiding president read the final tally, Democrats rushed over to congratulate Majority Leader Harry Reid (D-NV).

Watch it:

This bill “acknowledges finally that health care is a fundamental right,” Reid said before the vote. It’s “a human right, not just a privilege for the most fortunate.” Sen. Tom Harkin (D-IA) insisted that “this is not the end of health care reform. It’s the beginning. But we must make this beginning in order to fulfill that dream and really make health care a right, not a privilege.”

Harkin recalled Sen.Ted Kennedy’s influence over the process, reminding his colleagues that health care reform was Kennedy’s life work. “There is really only one author of this bill, Sen. Ted Kennedy, it’s his bill.”

“The other side says fear, we say hope. The other side says no way, we say yes. We say yes to progress, yes to people, yes to health care as an inalienable right for every American citizen,” Harkin insisted.

The Senate will vote on Tuesday, December 22nd at 7am to adopt the amendment and will hold another cloture vote on the Reid substitute — the Senate’s version of the health care bill. On Wednesday December 23 at 1pm, the Senate will vote to adopt the substitute and to invoke cloture on the underlining bill. A final vote on the Senate bill is scheduled for Thursday, December 24th at 7pm. It requires a simple majority.

This morning, Howard Dean walked back from earlier statements encouraging Democrats to “kill” the Senate health care bill. On Thursday, Dean wrote that “this bill would do more harm than good to the future of America,” but during his appearance on Meet The Press, Dean argued that yesterday’s manager’s amendment significantly improved the legislation. “I would let this thing go to conference committee and let’s see if we can fix it some more,” Dean said:

Well, let’s start with the positive things. Over the last week, there were things that were improved. There were some cost containment mechanisms that were gutted. They got restored. I would certainly not vote for this bill if this were the final product, but there are, the House bill is quite a good bill. This bill has improved over the last couple of weeks, I would let this thing go to conference committee and let’s see if we can fix it some more…so there are a lot of things that need to be fixed, but if they are fixed you may actually get the foundation of a bill, coming out of the House. If most of the House provisions survive, then we can have a bill that we could work with…I hope this isn’t the compromise that’s been achieved. I think we have yet to see the compromise that we could achieve.

Watch a compilation:

Dean didn’t advocate for pushing the bill through the reconciliation process or restarting reform after the midterm elections, as he had suggested several days earlier. Instead, the former Vermont governor expressed optimism that the bill could be improved in conference, going so far as to say that some of the goals of the public option could be accomplished through regulatory means.

“Here is the major problem,” Dean said. “We have committed to go down a path in this country where private insurance will be the way that we achieve universal health care. That means we’re going to have a 30-year battle with the insurance industry every time we try to control costs and try to get them to do things.” “My position is let’s see what they add to this bill and make it work, if they can make it work without a public option, I’m all ears. I don’t think that’s possible,” he said.

Daily Kos founder Markos Moulitsas, who strongly opposed the Senate bill, also appeared to moderate his position. “This, this is not a done deal, we still have reconciliation to go to,” he said during a round table following Dean’s appearance.

This morning, during an appearance on Fox News Sunday, Sen. Kent Conrad (D-ND) stressed that the final health care bill will have to reflect the language in the existing merged Senate legislation, suggesting that moderate Sens. Ben Nelson (D-NE) and Joe Lieberman (I-CT) would vote against the bill if the conference committee loosened the Senate’s abortion restrictions or inserted a public option:

I think any bill is going to have to be very close to what the senate has passed because we’re still going to have to get 60 votes. Anybody who has watched this process can see how challenging it has been to get 60 votes….It is very clear that the bill, the final bill, to pass in the United States Senate is going to be — have to be very close to the bill that has been negotiated here. Otherwise you will not get 60 votes in the United States Senate.

Watch it:

While the Senate has surpassed the all-important 60 vote hurdle, the process of reconciling the Senate bill with the House legislation may create new problems for Democrats and force many progressives to swallow the Senate’s weaker affordability standards and tax provisions:

Rep. Bart Stupak (D-MI), a co-sponsor of the restrictive abortion language in the House, has already promised to oppose the Senate’s abortion language while Reps. Diana DeGette (D-CO) and Louise Slaughter (D-NY) are raising the possibility that the the Senate’s abortion language may be unconstitutional. In the past, House Democrats have argued that the Senate’s excise tax on so-called Cadillac plans would disproportionately affect union workers or Americans in high-risk professions and claimed that the weaker employer responsibility provision could discourage employers from bringing on new lower income hires.

The Congressional Budget Office’s analysis of the merged Senate health care bill, incorporating the manager’s amendment, concludes that the legislation would cost $871 billion over 10 years, reduce the deficit by $132 billion over 10 years and by $1.3 trillion over 20 years. The bill would extend insurance to 31 million individuals, covering approximately 94% by 2019.

Here is how the new merged bill compares to the earlier version:

Some of the changes include:

- Holding Insurers Accountable: Insurers in large group market have to maintain a medical loss ration of 85%. Insurers in the small group market have to maintain a medical loss ration of 80%. Insurance companies who jack up their rates will be barred from competing in the exchange.

- Regulations For Children: Starting immediately children cannot be denied health coverage due to pre-existing conditions.

- Nonprofit Insurers Excluded From Tax: Nonprofit insurers are excluded from the tax on the insurance industry.

- Employers Can Offer Vouchers: Individuals and families under 400% of the federal poverty line who receive employer-sponsored coverage and spend 8-9.8% of their income on premiums, could “convert their tax-free employer health subsidies into vouchers that they can use to choose a health insurance plan in the new health insurance exchanges.

- Changes To Medicare Commission: The Medicare Commission will now examine the effect programs have on National Health Expenditures and will be prohibited from increasing premiums. The committee will make non binding recommendations if the Medicare spending rate is below or on target.

- New Choice Of Coverage From Nonprofits: Individuals could enroll in a national health insurance plan managed by the Office of Personnel Management, the same entity that oversees health plans for Members of Congress.

- Investment In Community Health Centers/Rural Areas: A substantial investment in Community Health Centers and more funding for rural health care providers and training programs for physician and other types of health care providers.

- Expands Small Business Tax Credit: The credits begin a year earlier – in 2010 and small businesses are eligible for up to six years. The wage thresholds for small business tax credits is also increased.

- Satisfying Gun Owners: Does not require individuals to disclose whether they own a gun. Gun ownership cannot be factored into premiums or coverage decisions.

- New Taxes: Increases the payroll tax on high income earners from 0.5% to 0.9%; the tax begins in 2013. A 10% tax is imposed on indoor tanning services and the ‘botox tax’ is removed.

Majority Leader Reid will file three cloture motions tonight and the Senate could pass the final legislation on Thursday, December 24th at 7pm. The Senate is expected to vote for cloture on the manager’s amendment Monday at 1am. The second cloture vote on the substitute is scheduled for Tuesday morning and the final cloture vote on the underlining bill could occur Wednesday afternoon.

Note: my colleague Emma Sandoe of DC Progressive contributed greatly to this post.

This morning, Sen. Ben Nelson (D-NE) held a press conference to announce that he would provide the 60th vote for cloture on the Senate bill with the manager’s amendment.” Nelson praised the Obama administration and Majority Leader Harry Reid (D-NV) for addressing his concerns but warned his colleagues, “I reserve the right to vote against cloture vote if there are material changes to this agreement in the conference report. ”

Abortion and Medicaid expansion may have been the largest sticking points to winning over Nelson’s votes, but Nelson dodged a question about the extra Medicaid matching funds for his state and instead highlighted the amendment’s changes to flexible savings accounts (FSA), rural hospitals, and a new report that would study successful malpractice reforms “to find out more information out about it,” Nelson said.

The abortion language — which allows states to prohibit abortion in their exchanges and requires strict segregation of private and public funds — may be the most significant alteration. In the video below, Nelson lays out the compromise:

First of all there are 12 states that have banned abortion in public plans and there are 5 states that have banned abortion in both private and public plans. We wanted to make sure in this legislation that it was clear that there was no preemption of the right of states to continue to make those bans.

Watch Nelson explain how the funds would be segregated:

“My chief of staff and I basically developed this idea…We already agreed how to account for the money, the premium dollars so finding then the mechanism for coverage was the next. And this we just stumbled on to,” Nelson admitted before confirming that abortion was the last unresolved issue.

The new managers amendment to the merged Senate bill incorporates Sen. Bob Casey’s (D-PA) language strengthening the segregation of private and public funds and increasing federal support for adoptions, with a new provision that would allow states “to prohibit abortion coverage in qualified health plans offered through an Exchange in such State if such State enacts a law to provide for such prohibition” (page 38 of the amendment).

In other words, states can opt-out of abortion coverage that goes beyond the Hyde amendment. A state may also repeal the prohibition and allow plans in the exchange to offer abortion coverage, so long as those procedures are financed with private premiums.

In states that don’t prohibit abortion coverage within the exchange, federal dollars can only be used to pay for abortions when the pregnancy threatens the life of the mother or results from rape or incest; private premiums must be used to pay for any other type of abortion, including those for health reasons. Each exchange will also have to offer at least one plan that does not offer abortion.

The managers amendment also gives state Commissions of Insurance the ability to audit insurers to ensure compliance with the segregation of funds in states where abortion is available, increases the Adoption Tax Credit and federal support for adoption.

This compromise differs from the so-called Stupak language in the House bill that prohibits federal funds from being used for abortions or for plans that include abortion services. Nelson brought his own Stupak-like amendment to a vote on the Senate floor, but it ultimately failed.

This morning’s managers amendment to the merged Senate health bill goes a long way towards satisfying the demands of Democratic hold-out and all-important 60th vote Sen. Ben Nelson (D-NE).

Nelson has recently complained that the proposed expansion of Medicaid to those earning below 133% of the Federal Poverty Line (FPL) would burden his state of Nebraska and suggested that states should be able to opt-in to the program.

Under the current merged legislation (the version unveiled on November 18th), the federal government fully finances care for the expanded population for two years and increases its matching funds (known as FMAP) thereafter. Page 98 of the managers amendment specifically identifies Nebraska for higher federal matching funds, fully funding its expansion:

‘‘(3) Notwithstanding subsection (b) and paragraphs (1) and (2) of this subsection, the Federal medical assistance percentage otherwise determined under subsection (b) with respect to all or any portion of a fiscal year that begins on or after January 1, 2017, for the State of Nebraska, with respect to amounts expended for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be determined as provided for under subsection (y)(1) (A) (notwithstanding the period provided for in such paragraph)

Subsection (y)(1)(A) refers to page 399 of the original merged Senate legislation which fully funds state Mediciad expansions for the first two years. The manager’s amendment also provides 2.2% increase in FMAP to help states finance their existing Medicaid programs.

Adding to his demands for stronger abortion restrictions, Sen. Ben Nelson (D-NE) has announced that Senate Democrats would have to allow states to “opt-in” to the Medicaid expansion to secure his vote for the Senate health care bill. In a letter to Nebraska Governor Dave Heineman, who has previously raised concerns about the provision in the Senate bill that would expand Medicaid to 133% of the federal poverty line (FPL), Nelson wrote “In your letter you note that the current Senate bill is not in Nebraska’s best interest. I agree. That is why I continue to work to change it,” Nelson wrote. “Under my proposal, if Nebraska prefers not to opt in to a reformed health care system, it would have that right.”

But for a senator who is also concerned about the “cost” of the bill and controlling health care spending, proposing an ‘opt in’ policy is counter productive. If some states chose not to opt in, then Americans below 133% FPL would have to buy unaffordable and unsubsidized coverage from the exchange or the individual health insurance market. Most would go uninsured, but contribute to national health care expenditures once they enter the emergency room — increasing costs in the long run.

Alternatively, Democrats could change the Senate legislation to offer subsidies to poorer residents living in states without Medicaid expansions. But if the expanded Medicaid population can find subsidized coverage in the exchanges, governors would be discouraged from spending state dollars to help finance the expansion. Federal expenditures on subsidies would only increase, dramatically raising the price tag of the bill and irritating Nelson even further. The circular logic reveals the true consequence of Nelson’s position: should Congress insert a Medicaid opt-in provision while heeding Nelson’s cost concerns, poorer Americans would lack access to affordable health care coverage.

Medicaid is the “most efficient and least expensive way to cover the poor” and it’s especially designed to address the unique health needs of lower income populations. According to some estimates, “it would cost up to 30 percent more, in terms of total medical spending, to put poor people in subsidized private insurance plans rather than in Medicaid.” Individuals “would pay seven times as much–an estimated $771 per year in out-of-pocket expenses versus $109—in private plans, because Medicaid has low-cost sharing requirements.”

The Medicaid expansion would “have the biggest impact in states with high numbers of poor uninsured people and tight Medicaid eligibility standards.” Nebraska has the 23rd highest number of uninsured residents with incomes below 133% of FPL. Since the federal government would cover the first three years of Medicaid expansion, Nebraska would be required to insure some 80,000 Americans through its Medicaid program and spend “$45 million in extra expenses after six years, or from fiscal year 2014 through fiscal year 2019.”

In other words, Nebraska is not at the front lines of the Medicaid expansion controversy. Expanding the program wouldn’t come cheap but it wouldn’t overwhelm the state either. In the context of comprehensive health care reform, the policy would lower the cost of achieving near universal coverage and help reduce national health care expenditures. Nelson should want to share in that responsibility.