Health Care Reform Would Entail Major Changes for Americans

Democratic senators and White House officials are working behind closed doors to hash out final health care legislation that they hope will pass on the floor.

The main issue is how to resolve the differences between the bill passed by the Senate Finance Committee and the Health, Education, Labor and Pensions Committee in June.

ABC News video of Harry Reid discussing health care reform.Play

Meanwhile, the Congressional Budget Office (CBO) will review the House bill to assess its costs. Previous legislation was pegged at more than $1 trillion and President Obama has put the threshold at $900 billion for a suitable plan.

Democratic lawmakers insist that health care legislation will pass, that it's just a matter of when and what it will include. White House officials, including Chief of Staff Rahm Emanuel and director of the Office of Health Reform Nancy-Ann DeParle, have been closely involved in negotiations with leaders in the Senate. Even Obama is trying to fire up his own party to get momentum and quick action.

Video of ABC News Top LinePlay

"Sometimes Democrats can be their own worst enemies," the president said during a speech in New York City Tuesday. "Democrats are an opinionated bunch. You know the other side, they just kind of do what they're told. Democrats -- ya'll [are] thinking for yourselves. I like that in you, but it's time for us to make sure that we finish the job here, we are this close and we've got to be unified."

At a separate event that same day, Obama expressed confidence about the negotiations.

"We've got people who are engaging even if they don't want to engage," he said, "because they are realizing it's not a matter of what, it's a matter of when."

Video of ABC News Top LinePlay

Most Americans agree that health care reform is needed, but they differ on what an overhaul should entail and on the elements of the different plans being proposed. Costs are a key concern among both lawmakers and the public. An ABC News/Washington Post poll found that 68 percent of Americans thought reform would increase the federal budget deficit, but from that group, nearly half -- 46 percent -- said it's still worth it.

Whatever the final bill, any overhaul in the nation's health care system likely will impact all Americans, even those who are already covered. Here's a look at some key components being discussed by lawmakers in the Senate and what they mean for Americans:

Public Option

The idea of a government-run insurance option is one of the main points of contention, not just between the right and the left, but among Democrats themselves.

In the summer, Democratic lawmakers faced rowdy constituents protesting the idea of government involvement in their health decisions, but an ABC News/Washington Poll released this week found that a majority of Americans -- 57 percent -- actually do support a public option. That figured jumped to 76 percent if a public option is limited to those who can't get affordable private insurance. In fact, Americans in the poll, by 51-37 percent, said they'd rather see Democrats pass a plan without Republican support if it included a public option based on affordability, than pass a plan with Republican backing but no such option.

Because the plan proposed by Senate Finance Committee Chairman Max Baucus, D-Mont., includes no such option, and the one by the health committee does, several lawmakers have attempted to propose variations.

Senators are leaning toward a plan proposed by Sen. Chuck Schumer, D-N.Y., in which states would be able to opt out of a government-run insurance option.

Another option on the table is that of a "trigger" public option, a plan pushed by Maine Sen. Olympia Snowe, the only Republican to vote for a Democratic health care bill. Under this plan, a public option would go into effect in those areas where private insurers failed to provide affordable, accessible coverage to Americans.

Baucus said instead of a public option -- which he claims will not garner enough votes on the Senate floor to pass a bill -- member-owned, nonprofit co-operatives would be able to better compete with private insurance providers.

Public Option in Health Care Reform Debate

Liberal Democrats, such as House Speaker Nancy Pelosi, D-Calif., are standing firmly behind the public option. Pelosi favors a public option plan modeled after Medicare. But some fiscally conservative Democrats are concerned about spiraling costs that could result from such a measure. The White House so far has been mum on the issue of whether the president would support a bill without such an option.

"I shockingly don't have a lot new on this," White House press secretary Robert Gibbs said Tuesday when pressed by reporters on the issue. "We want to see, in legislation that goes throughout this process, that ensures choice and competition."

Sen. Joe Lieberman, I-Conn., whose vote Democrats will need to overcome a Republican filibuster of health care reform, rejected altogether the notion of a public option in a speech on the Senate floor Wednesday.

"I don't remember another case where our answer to a concern about fairness in the marketplace -- in this case whether there is real competition in the health insurance business, whether the health insurance companies are being fair in their rates, et cetera, et cetera, all important, reasonable questions -- I don't remember another case where the answer to that was to create a government-owned corporation to compete with the private sector," Lieberman said.

Some Democrats are also skeptical about whether a public option will help the health care sector.

"I am not a big fan of public option," said Sen. Mary Landrieu, D-La., who chairs the Senate Committee on Small Business and Entrepreneurship, on Fox News Wednesday. "We already have two public options that most people in America understand, Medicaid and Medicare. Both have very, very serious problems. One is going to be bankrupt in seven years, and the other one doctors don't want to participate."

But Senate Majority Leader Harry Reid, D-Nev., who is leading the closed-door negotiations, said he's still in support of a government-sponsored insurance option.

"I'm glad I'm in the majority," Reid said Wednesday, referring to the popularity of public option in polls. "I support a public option."

Insurance Market Overhaul

Analysts say that of all the various measures in the proposed bills, consumers will first and most significantly feel the impact of changes in the health insurance market.

Across the political spectrum, members of both parties -- in what is one of the few points of agreement in the health care debate -- are calling for the removal of pre-existing conditions that deter many Americans from getting affordable coverage, if any at all.

"It doesn't matter what you do, with the insurance industry, you lose," Reid told reporters Wednesday. "You're predetermined to lose, because the rules keep changing. And the only one that determines the rules is the insurance industry. ... When you don't have a referee, and you have the person that's conducting the game setting the rules, this is what happens."

Some people want insurance companies to remove limits on lifetime coverage altogether. Such measures could open up access for many uninsured Americans, but could also boost costs because insurance companies cite these measures as a way to keep their costs down.

On Wednesday, the Senate -- on a bipartisan basis -- voted down the "Doc Fix," which would have countered a cut in payments to Medicare doctors at a cost of $245 billion over 10 years. However, many lawmakers opposing the cost created by the "Doc Fix" will ultimately vote for a shorter fix financed by spending cuts elsewhere. It is unclear when that shorter fix will be offered.

Mandatory Coverage

Reid said the subject of an employer mandate has taken up the most amount of time at the negotiations in his office and would be in the final bill. But he did not elaborate on how it would manifest itself in the final legislation.

"We'd spent two nights talking about that, and that's something that will be in the bill," he said.

The mandate is stronger in the health committee bill, which requires that companies with more than 25 employees would pay $750 for every uninsured employee. Under the more centrist Finance Committee bill, companies with more than 50 employees would pay $400 per worker.

The proposed measure has drawn skepticism from both liberals and conservatives.

Snowe said Wednesday she has "serious concerns" about a strict employer mandate.

"It penalizes employers not offering health insurance to their workers. ... This is not the time, you know, to be penalizing businesses across the board at a time when we're facing a precarious economic landscape," Snowe said at a committee hearing Tuesday. "I would hope that this is one issue that would not find its way in the merge legislation. We've already lost 7.2 million jobs since the onset of this recession. So I think it would move in the wrong direction."

Yet, liberal groups say the mandate doesn't go far enough even in the health committee bill, and that it would be cheaper for employers to pay the fine than pay for insurance.

As for an individual mandate, in the ABC News/Washington Post poll, 56 percent of Americans favored a law requiring all Americans to have health insurance -- and the number jumped to 71 percent, if it included financial assistance in obtaining insurance for families below a certain income line.

More than 15 percent of Americans do not have health coverage and the numbers continue to rise, according to the latest census.

While an individual mandate would not affect 85 percent of the population, which is insured, it would have a significant impact on the more than 46 million Americans who don't have any type of health coverage.

Proponents of this measure say it will encourage individual responsibility but critics claim it will put a burdensome onus on low-income individuals and households. Politically, some GOP lawmakers argue that it constitutes an additional tax and, essentially, goes against the president's promises of no additional taxes.

All Democratic bills include additional subsidies and financial aid for low-income families and individuals who are not able to afford insurance, and analysts say the overall effect will depend on the effectiveness of those measures.

The Senate committees and House Democrats are proposing to provide subsidies to those individuals and families whose incomes are up to 400 percent of the federal poverty level. For a family of four, that was gauged at $22,050 for 2009. There are also provisions for tax breaks for small businesses and expansion of Medicaid.

Tax on 'Cadillac Plans'

Another controversial measure that would impact a small, albeit important, group of Americans is a tax on high-value "Cadillac" plans, generous insurance packages that include luxuries such as no co-payments and deductibles and that some critics say are a big source of costs for the insurance industry.

Under Baucus' plan, insurers would pay tax on plans for which premiums exceed $8,000 for individual coverage and $21,000 for family coverage, starting in 2013.

Most Americans oppose such a tax, with 61 percent in the ABC News/Washington Post saying it should not be imposed.

Most Americans aren't covered by such plans. In 2009, the annual premiums for employer-sponsored health insurance averaged $4,824 for single coverage and $13,375 for family coverage, according to the Kaiser Family Foundation's 2009 Employer Health Benefits survey.

Some Democrats and most Republicans in Congress also oppose this measure.

GOP leaders say taxing insurance providers means taxing people because companies will simply pass on their new costs to people in the form of higher co-payments and deductibles. Some Democrats oppose the plan because of their union supporters, who fear it will impinge on their often generous benefits packages, which they take in exchange for lower pay.

ABC News' Z. Byron Wolf contributed to this report.