Health Care Hurdles: Legislation's Fate Hangs in the Balance

Democrats wait for guidance from President Obama's State of the Union address.

Jan. 27, 2010— -- President Obama will likely press lawmakers to find common ground on health care in his first official State of the Union address tonight, but the fate of the bill remains in limbo as Democrats ponder options after losing the Massachusetts Senate seat to a Republican.

Despite telling Congress last week not to "jam" through a health care bill right now, the president is urging members of Congress to reach a consensus on core principles on which most members can agree.

"As we move forward, we've got to make sure that we're focused on what is actually helping the American people deal with what is a very serious problem," Obama said Monday in an ABC News interview.

But many Democratic lawmakers who are up for re-election are jittery about their own political futures and the leadership is not confident that the party will garner enough votes to pass a bill.

Democratic leaders are even weighing the option of not passing health care legislation altogether, which would be a major blow to the president's agenda.

Here's a look at where lawmakers stand on some of the major components of health care overhaul:

Insurance Industry Reforms

Democrats, and possibly even some Republicans, may be able to reach a consensus on what reforms need to be implemented in the insurance industry. Most lawmakers agree on eliminating pre-existing conditions and barring insurance companies from rejecting patients based upon those.

Obama has urged Congress members to look for such commonalities and possibly even draft a new bill, taking the most popular ideas and scrapping the rest.

The Senate and House health care bills are also similar in that they expand Medicaid coverage, create insurance exchanges in which those who do not have insurance can compare and buy coverage and cut what some lawmakers deem as inefficiencies in Medicare.

But they also vastly differ in their language on abortion, the option of a government-run insurance plan and how to fund the cost of health care overhaul.

House Democrats have also objected to the concessions that some Democratic senators, such as Ben Nelson of Nebraska, received in return for their votes.

Cadillac Tax

One of the thorniest points of the Senate bill among House Democrats is the proposed tax on high-premium insurance plans, which some blame for rising insurance costs. The Senate bill imposes an excise tax on such plans, a move that irked some liberal Democrats who say it inadvertently hurts labor unions and some teachers who opt for a lower salary in exchange for a high-end insurance plan.

Senate and House Democrats reached a deal earlier this month that would exempt union-negotiated plans from any tax until 2018. But with Democrats rethinking their health care strategy, the fate of the so-called Cadillac tax is unclear.

Scrapping the Public Option

Another significant difference between the House and Senate bills was the option of a government-run insurance plan. The Senate eliminated such a plan but some House Democrats insist they won't support a health care bill without a public option.

The few Republicans who initially supported health care overhaul, such as Maine Sen. Olympia Snowe, were strongly against public option. Republicans say such a move would stifle the private sector and make it difficult for insurance companies to compete.

To pass health care legislation, Democrats may have to scrap the public option altogether if they can get enough votes in the House to support such a move.

Dropping Health Care

House Majority leader Rep. Steny Hoyer of Maryland Tuesday said one of the options lawmakers are mulling is to do nothing.

"There are no easy choices," the Maryland congressman said of the difficulties Democrats face in passing their health care bill after losing the seat in Massachusetts to Scott Brown. "The first [choice], of course, is not to pass a bill."

Democrats will be looking for guidance from Obama tonight on the next steps they should take.

"By next week, we need to come to focus on the way we want to move forward," Hoyer told reporters. "I think the president's discussion will certainly add to our information ... to make that decision."

The president will continue to push Congress to pass a health care bill. He will likely talk about the ramifications on Americans -- high insurance costs and high premiums while insurance companies profit -- and the high costs of health care to the economy to drive his point across.

Health Care Hurdles

The future of health care overhaul is unclear. Republican leaders, such as Sen. John McCain, R-Ariz., have said Congress needs to scrap what has already been done and start from the beginning. But Obama is urging lawmakers to instead find common ground.

His advisers say Democrats need to make a move on health care to save themselves politically.

"I think where we stand is the health care plan has become a caricature," Obama's 2008 campaign manager and White House adviser said last week. "And if we walk away from it now, everyone who supported it is going to have all of the downside and none of the upside. We have to deliver. If we don't deliver, I think voters will rightfully say, you know, 'What's going on here?'"

Democratic leaders are working behind closed doors to launch a last-ditch effort to save the health care bill. Senate Majority leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., are mulling a plan in which the House would "fix" the things it doesn't like about the Senate health care bill, such as a tax on high-premium insurance plans.

The changes would be included in a bill passed under special budget rules, called reconciliation, which would only require 51 votes to pass the Senate. Once there's agreement on those changes and they pass in the Senate, the House would move to pass the original Senate bill along with the companion reconciliation bill.

It remains to be seen whether that plan can actually go into effect. Many Democrats are not happy with cutting out the many provisions in the original bills. Shaken by Democrats' loss in Massachusetts, many are growing weary of the health care bill and the public opposition.

Others continue to argue that something is better than nothing and that overhaul is much needed.

For now, Democrats are in a hold pattern awaiting further guidance from today's State of the Union address.

"It's certainly on the front burner but there is no rush that we have to do something this week or next week," Sen. Charles Schumer, D-N.Y., told reporters Tuesday, "but there is a feeling that we have to do something."