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LAURIE MCGINLEY: Good day. I am Laurie McGinley with Kaiser Health News. Today, we’re talking about Health on the Hill with Mary Agnes Carey and Eric Pianin of Kaiser Health News. Thank you for joining us.

Well, as we all know, President Obama and his family are enjoying a vacation on Martha’s Vineyard. Does that mean that the rest of us get a break in the debate about health care reform?

MARY AGNES CAREY: No, we don’t. We are busy as ever. Reporters of course will continue to write about this. Proponents and opponents of reform will continue to pick away at pieces of the plan they like or they don’t like. I think this issue has a life of its own and it will continue to resonate throughout the August break and well into September when lawmakers return after the Labor Day recess.

LAURIE MCGINLEY: Can you give us an update, Mary Agnes, of where the bipartisan negotiations are that involve the six members of the Senate Finance Committee, the three Democrats and the three Republicans that are trying to hammer out a bipartisan agreement?

MARY AGNES CAREY: They had a teleconference last week, it lasted about 90 minutes. They are trying to focus in on making health care more affordable and making the bill more affordable as well. The thought is they are trying to scale back provisions of the bill, whether it is the subsidies that are there, whether it’s other elements of the package, perhaps the Medicaid expansion, or the benefits that would be required in an insurance plan.

So they are trying to look at it to make it, I think, a smaller bill that could attract more support from the Republican party and perhaps maybe even more Democrats who may not necessarily be on board right now.

LAURIE MCGINLEY: Eric, what do you think the odds are of politically some kind of a compromise coming out of that panel?

ERIC PIANIN: I think it’s getting harder and harder for them to reach a bipartisan deal that would fly in both the House and the Senate. And I think we are already seeing signs from the Senate, Democratic leadership in particular, that they are getting very impatient with these talks that they have been dragging on now for months and months while other committees have completed their work.

There is less and less optimism that Senator Max Baucus who is the chairman of the Finance Committee and Senator Chuck Grassley who is the ranking Republican can finally reach agreement on something that would be sailable in both chambers.

Over the weekend, Senator Chuck Schumer of New York, who is a leader in the Senate, made it very clear on “Meet the Press” that time is running out and the Democrats are thinking very hard about a go-it-alone strategy, which they would put together a bill that would have great appeal to a wide-spread number of Democrats.

The centerpiece of it might include a public insurance option program, something that the Republicans say they would never support something that a lot of conservative Democrats say they do not support, so you can see that people are getting very impatient and Baucus has set a September 15th deadline for completing the work. So we will just have to see whether that deadline holds.

LAURIE MCGINLEY: If they move forward with a go-it-alone strategy as they have been talking about, what are some of the practical implications of trying to pass a bill through budget reconciliation rules?

ERIC PIANIN: Well, that is probably the route they would have to go. The big concern is overcoming a Republican filibuster and that requires getting at least 60 votes and right now I don’t think there are 60 votes for any proposal kicking around in the House or the Senate. But there is a feeling that if need be they can use these special budget rules to pass legislation with a simple majority of votes, 51.

They can get to 51, but budget reconciliation is kind of an arcane budget procedure that was devised back in the ’70s and ’80s really to pass budgets and deficit reduction plans and tax proposals that were very controversial. It wasn’t really designed to pass major social policy reforms, although it has been used from time to time for that purpose.

LAURIE MCGINLEY: Mary Agnes, where do things stand now with the public plan? President Obama is in a very difficult place where the left is angry at him for waffling about the public plan, but moderate Democrats and Republicans don’t seem a bit interested in the public plan.

MARY AGNES CAREY: Right. I think Eric just made an excellent point with this idea that some Democrats feel so strongly about the public plan that they want it in a bill and they may use these Senate procedures to pass it to get it in a bill.

In the House, Nancy Pelosi as the speaker of the House has said she has to have it in a bill but Steny Hoyer who is her deputy has been a little more flexible about it, that it is important but he also wants to pass the bill. So I think this remains a critical area of the bill that people are going to be talking about and looking at.

As we’ve talked before in the Senate Finance Committee, they are talking about this idea of a co-op that could be a middle ground on the public plan option, a lot of progressives do not like that and want a different type of public plan. So I think as we watch the debate continue, this will continue to get a lot of focus and a lot of scrutiny.

In the Finance Committee, they are trying to see if they can get a middle ground on it, but it is unclear right now if they can.

LAURIE MCGINLEY: The polls are showing, as we all have noticed, rising anxiety about the health care process in hammering out this legislation, what do you think is causing that? Is it concerns about the bill itself? Is it some of the rumors, some of which are wildly inaccurate that are going around about the bill? Is it fear of big government? Is it fear of problems in the economy or of growing deficits, what is your take on that, Mary Agnes?

MARY AGNES CAREY: I think it’s all of those things and even more. I think a bill this big, this sweeping, this comprehensive, is getting a lot of attention, especially now the American public is beginning to look at it. We saw this during some of these meetings over the August break. They will be ongoing as the August recess continues.

I think people are trying to look at the bill, find out what is in it for me, and they have honest inquiries, and of course opponents of the bill will seize on elements of the bill that they think will work in their favor to derail it. Conversely people who want legislation to pass, who think that this is their time, will work as hard as they can to show people what is in it for you, why this bill is good for you, so I think all of those factors and even more will contribute to the current state we are in.

LAURIE MCGINLEY: It is interesting that the pro-reform groups are spending much more money on advertising than the anti-reform and yet they don’t seem to be able to make a persuasive case. Why do you think that is, Eric?

ERIC PIANIN: I think the proponents in the White House are struggling to find the right message, the right voice. I think early on, President Obama and his advisors tried to portray this cassis [misspelled?] as A) a way to provide universal health care coverage for all Americans and B) to, as they say, try to bend the cost curve, try to save a lot of money over the next 10 to 15 to 20 years and try to stop what is viewed by just about everyone as runaway spending on health care.

I think that the Democrats gave the opposition many openings to go after health care reform. Part of it was just the whole legislative process of mini committees passing different versions of the same bill, giving opponents an opportunity to cherry pick and focus on a few things to scare people or to distort what the White House is trying to do. We certainly saw that with all this talk about death panels and other shortcomings, alleged shortcomings of the effort.

I think the White House in the next couple of weeks is going to have to come up with a much better focused campaign to explain to people why it is in their interest to have health care reform passed this year.

LAURIE MCGINLEY: What would you expect to happen after Labor Day, Mary Agnes? What are we getting ready to do?

MARY AGNES CAREY: Well, the Senate Finance Committee, of course, is going to try to put out a package. They have got the September 15th deadline. I am not quite sure how hard and fast that is, but we will have to watch and see what they are doing. In the House, you do have committees as Eric noted earlier that have already passed their bills, so they have got to merge those three into one, and bring it to the floor for a vote.

I think a key question to watch is how soon is that vote scheduled in the House? Will Speaker Pelosi want to see what the Finance Committee does before she asks her members to go make that floor vote? That vote could come at the end of September, it could come in October, and if Finance did pass a package, then of course you would look for floor action in the Senate and they would have to merge their package with what has already been passed by the Health Education Labor and Pensions Committee, and then you would have your House Senate conference. So it should be a pretty busy fall.

LAURIE MCGINLEY: One of the things that people are talking about is a scaled back bill in an effort to reduce the size and the cost of the bill, what would be the pros and cons of scaling back the bill from its current estimated size of $1 trillion do you think?

MARY AGNES CAREY: The pro is you could get far away from that $1 trillion mark, that gives some people heartburn, the idea that Congress would pass a bill that big. It could in theory attract some support maybe of some Republicans who are worried about too big of a package at this point.

I think one of the negatives is that, one other thought of passing a smaller package is you can come back and do more later. But there are people that feel like this is the year, this is the momentum, this is the time, Democrats control both chambers of Congress, and they control the presidency, the White House, so use that momentum and use that collateral if you will to get the biggest bill possible so I think those are some of the fights that are ongoing with those two ideas that you talked about.

LAURIE MCGINLEY: And Eric, what do you think, the Republicans, will they score a big victory or will they pay a price if they defeat health care reform?

ERIC PIANIN: They think they are going to score a big victory and I think it hearkened back to the failure of the Clinton Administration to pass major national health care reform back in the ’90s and as a result the administration was embarrassed, the Democrats were in disarray and the Republicans made great inroads in the following off-year election. I think they see a possibility of repeating that.

LAURIE MCGINLEY: Well, that is Health on the Hill from Kaiser Health News. Thank you for joining us. I am Laurie McGinley.

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