A first look at the Senate health care reform bill

Senate Majority Leader Harry Reid has unveiled the long-awaited health care reform bill that he hopes to bring to the Senate floor for debate. The Patient Protection and Affordable Care Act would reduce the number of uninsured Americans by 31 million at a cost of $849 billion over ten years, according to the nonpartisan Congressional Budget Office (CBO). Furthermore, CBO estimates that the bill would reduce the federal budget deficit by $130 billion over the next ten years.

So how does the Senate bill measure up against the Minnesota Council of Nonprofits’ health care principles, and what are some of the major differences from the House bill?

1. Support for small employers, including nonprofit employers. Unlike the House bill, the Senate bill does not include a mandate requiring employers to offer health insurance coverage to employees. However, medium and large employers would pay a fee if the federal government provides subsidies so that their employees can purchase coverage. Tax credits of up to 50 percent of premiums would be available to small businesses and small nonprofits to make coverage more affordable.

2. Make health care affordable for low-income Minnesotans. The bill mandates that nearly all individuals obtain health care coverage, but includes an exemption for economic hardship. The bill includes premium tax credits and cost-sharing assistance to help households with incomes between 133 percent and 400 percent of the federal poverty line (up to $88,000 for a family of four) to afford health insurance.

Medicaid, the joint federal-state health care program for low-income people, would be simplified and expanded in 2014 to cover Americans under age 65 with incomes below 133 percent of the federal poverty level. This is a smaller expansion than in the House bill, which would cover people with incomes up to 150 percent of the federal poverty level.

3. Provide adequate federal funding. The Senate bill has different funding sources than the House bill, such as a new fee on insurance companies when they sell high-cost health insurance plans and a 0.5 percent increase in the Medicare payroll tax for individuals who earn more than $200,000 and couples who earn more than $250,000.

The federal government would pay 100 percent of the cost for people who would now qualify for Medicaid under the proposed expansions through 2016, and in future years would cover an average of 90 percent of the cost. This is a critical step for ensuring that the federal government does not shift too much of the cost of health care reform to the states.

4. Contain unsustainable cost increases. The bill creates health insurance exchanges to help make coverage more affordable and accessible. The bill also includes a public health insurance option, but with a provision permitting states to opt out.

The Senate bill also includes numerous insurance reforms, including prohibiting insurers from discriminating based on pre-existing conditions, imposing lifetime limits on benefits, rescinding coverage except for fraud, and establishing eligibility rules that discriminate in favor of higher-wage employees.

Majority Leader Reid hopes to bring the bill to the Senate floor in the near future, with debate expected to proceed for approximately two to three weeks. Reid will need to garner 60 votes again to cut off debate (cloture) and proceed to a final vote. If the Senate passes its bill, conferees will be appointed to work out the differences between the House and Senate bills before a final vote on a conference report.

Stay tuned for further details in the continuing health care reform debate.

-Steve Francisco

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About Steve Francisco

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