Health care reform moves forward in U.S. Senate, House

The U.S. Senate’s Health, Education, Labor and Pensions (HELP) Committee has become the first Congressional committee to report out a comprehensive health care reform bill. The Committee approved the “Affordable Health Choices Act” on a 13 to 10 party-line vote on July 14. Some key provisions in the bill include:

  • Every American would be required to carry health insurance and there would be substantial discounts for people who cannot afford to purchase insurance.
  • Eligibility for Medicaid, the joint federal-state health program for low-income Americans, would be expanded.
  • Businesses with 25 or more employees would be required to offer health insurance to their workers or pay a $750 annual fee per full-time employee. Small businesses with fewer than 25 workers would be exempt from the mandate.

While the HELP Committee bill includes most of the policy changes sought by the Obama administration, it will be up to the Senate Finance Committee to figure out how to pay for health care reform. The Finance Committee hopes to report a bill soon.

In the U.S. House, Democratic leaders unveiled their bill, H.R. 3200, “America’s Affordable Health Choices Act” on July 14. The House bill is headed for a mark-up (the committee amendment process) in the Energy and Commerce Committee on July 16. Similar mark-ups are now expected in the Ways and Means Committee and the Education and Labor Committee before Congress leaves for its August recess.

The House bill would cover approximately 37 million Americans over the next decade by requiring people to purchase health insurance, providing subsidies for low-income individuals to purchase insurance and expanding eligibility for Medicaid (a so-called “public option”). Democratic leaders estimate the proposal would ensure that 97 percent of Americans were in a health plan by 2015, at a cost of $1.2 trillion over the next decade.

To cover some of this cost, the House bill proposes a new surtax on individuals earning more than $280,000 a year and families earning more than $350,000 a year beginning in 2011. According to the Washington Post, the new surtax would start at 1 percent on income exceeding $350,000, rise to 1.5 percent on income exceeding $500,000, and top out at 5.4 percent on income exceeding $1 million a year. The Tax Policy Center estimates that the new surtax would affect only about 2.1 million of the wealthiest taxpayers in the nation, raising $544 billion over the next decade.

The introduction of the House bill was delayed by nearly one week after a group of House “Blue Dog” Democrats expressed opposition to an earlier draft of the bill because of concerns over the cost of the bill, insufficient cost containment provisions and inadequate help for rural hospitals (we blogged on this the other day). While House leaders have indicated that they have tried to address some of these concerns in the new bill, it is unclear whether the “Blue Dogs” will support the revised House bill.

-Steve Francisco

About Steve Francisco

Steve Francisco is the former federal policy analyst for the Minnesota Budget Project.
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