How to fix health policy.

Let the Amending Begin!How to fix the Senate health reform bill.

By Timothy NoahPosted Sunday, Nov. 22, 2009, at 3:00 PM ET

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Health care reform limped to the Senate floor on a party-line vote, 60-39, after Democratic Sens. Blanche Lincoln of Arkansas, Mary Landrieu of Louisiana, and Ben Nelson of Nebraska gave their reluctant consent. (Republican Sen. George Voinovich of Ohio, who opposes the bill, was not present.) Statistically, the Congressional Research Service has found that 97.6 percent of all Senate bills that cleared this procedural hurdle during the past 10 years eventually won final Senate passage (though some would surely argue that unique circumstances make health reform an excellent candidate to become one of the 2.4 percent of all such bills that do not). Senate Democrats now risk finding themselves in the position of a dog that, after chasing a car, finally overtakes it. When the Senate returns from a Thanksgiving recess, it will be to reform health care in the United States. Er, how?

A few suggestions:

Keep the public option. On ABC News' This Week on Nov. 22, Nelson said, "[W]e could negotiate a public option of some sort that I might look at, but I don't want a big government, Washington-run operation that would undermine the private insurance that 200 million Americans now have." (In her statement explaining her vote to proceed with debate, Lincoln said she, too, would not abide a "new government-run health care plan.") What sort of public option was Nelson talking about? Possibly he had in mind a convoluted plan by Sen. Tom Carper, D-Del., to require states that fail to meet an affordability standard to include a nonprofit public option over which the president, the Senate, and the Health and Human Services Department would have some vaguely defined control.

At its worst, the Carper option would combine the lame "trigger" scheme of Sen. Olympia Snowe, R-Maine, which Landrieu has signaled she might support, with the lame "health cooperatives" scheme of Sen. Kent Conrad, D-N.D. At its best, the Carper option might serve as a Trojan horse for creation of a more robust public option down the road. But if that's the case, won't Nelson, Landrieu, Lincoln, and the redoubtable Sen. Joe Lieberman, Connecticut independent, sniff that out? Better to just leave the public option as it is, which is a pretty sad and withered thing already.

I don't actually believe that will happen. I think the Senate will end up stripping out the public option altogether. But it shouldn't.

Leave the abortion language as is. Another deal-killer for Nelson. The Senate bill basically revives a compromise reached in the House before Rep. Bart Stupak, D-Mich., and the U.S. Conference of Bishops inserted tougher language virtually forcing private insurers operating in the newly established exchange not to cover abortion. The Senate language requires any plan offered in the exchanges to establish elaborate procedures to segregate federal funds, which may not pay for abortions, from funds raised from premiums, which may do so. It's analogous to a compromise that 17 states have enacted in allowing the state-federal Medicaid program to cover abortions with specially segregated state funds rather than federal funds. The Health and Human Services Department, which funds Medicaid, is forbidden to pay for abortions under the 1976 Hyde amendment.

I don't expect to get my way on this one, either.

Tweak the Medicare tax. The Senate bill raises the Medicare tax, which currently is a flat 1.45 percent for everybody, to 1.95 percent for families earning more than $250,000. Henry Aaron of the Brookings Institution points out that this could distort compensation by encouraging a shift to nonsalaried forms of pay like stock options. "I would rather see Congress rely on broad tax instruments like the income tax," he told the Wall Street Journal. The House bill already does that by imposing a 5.4 percent surtax on family incomes above $1 million. That remains the best option of all. But assuming it's unsellable in the Senate, then perhaps Reid could extend that 1.95 percent Medicare tax for families earning more than $250,000 to cover investment income, too. Merely extending the current 1.45 percent tax to cover investment income would raise $160 billion through 2019, according to Citizens for Tax Justice, a labor-affiliated nonprofit. That's more than three times the $54 billion that the current Medicare tax proposal would raise. Add in that $54 billion and the difference between 1.45 percent and 1.95 percent, and the new Medicare tax could raise well over $200 billion.

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