The bill that is under the veto threat has the support of most of the Senate's Democrats. Sponsored by Sens. Edward Kennedy (D-Mass.) and Bush rival John McCain (R-Ariz.), it would allow consumers to sue plans in state and federal courts. For HMO decisions that are subject to a medical review, the Kennedy-McCain measure would allow economic, "pain-and-suffering", and punitive damages in state courts, limited only by state rules.
The bill's main competition is a Bush-endorsed measure from Sens. John Breaux (D-La.), and Bill Frist, MD, (R-Tenn.), who is the Senate's only physician member. It would allow suits only in federal courts.
The Breaux-Frist bill would allow unlimited economic damages, but would cap pain-and-suffering awards at $500,000 and not allow punitive damage payments.
According to official congressional budget estimates, the Kennedy-McCain bill would raise private health insurance premiums by 4.2% over the next five years, while the Breaux-Frist proposal would increase premiums by 2.9% over the same period.
According to Bush adviser Mark McClelland, MD, the cost increases that Kennedy-McCain would bring would further erode employer-based coverage. This week, the Center for National Policy reported that health benefits have declined since 1979 in most industries and in firms of all sizes.
But Kennedy charged that the lawsuit provisions of the Breaux-Frist plan were a "mockery of fair play" and could actually roll back rather than expand legal protections for consumers.
Meanwhile, House Republicans are scrambling to prepare their own bill that they hope to pass by the end of the month. At the same time, however, maverick GOP Rep. Charles Norwood (Ga.), a fierce and prominent critic of HMOs, announced this week that he was siding with the Kennedy/McCain bill.
In 1999, Norwood's HMO bill passed the House, over the objections of Republican leaders.
"Now there is a much greater impetus for the president to compromise sooner rather than later," Ornstein tells WebMD. "He doesn't want to compromise by first vetoing a bill and making it look like Republicans are against patients' rights. If I were Bush, I would cut the deal sooner, and get something where I could declare victory."