Late Saturday night, in a historical vote of 220-215, the House passed the
Affordable Health Care for America Act (HR 3962) with thirty-nine democrats
voting “nay” (please see the attached article for a list) and one Republican,
Representative Joseph Cao, voting “yay”. Passage of the health care overhaul
legislation was no easy task; it took months to come to an agreement on the
final version introduced to the House and even on Saturday, it was not clear
whether or not there would be enough votes to pass it.
Prior to passing the massive overhaul legislation, the House passed an amendment
introduced by Representative Bart Stupak. The amendment prohibits federal
funding of abortion in the newly created insurance program “exchanges” and the
public option program. The amendment was adopted by a vote of 240-194.
Many of the newly created provisions of the health care bill will go in to
affect in 2013. Individuals are given the option to keep their current health
plan as a “grandfathered” plan, but all individuals who do not already have
health insurance through their employer, will be required to acquire some form
of health insurance. Employers with payrolls over $500,000 must offer health
care insurance to their employees or make an insurance contribution on behalf of
the employee. If employers fail to meet the requirement, a penalty will be
incurred. Small businesses that offer health insurance to their employees are
eligible for a tax credit.
Health insurance exchanges will begin operations in 2013 and via an application
process, states are able to create and run their own state-based exchanges. A
public health insurance option will be run by the Health and Human Services
Department, the rates of which are to be no lower than under Medicare and no
higher than the average for private plans.
Those Americans that make up to 150 percent of the poverty level will be
eligible for Medicaid and the coverage gap for the Medicare prescription drug
program would be phased out by 2019. All children eligible for coverage under
the Children’s Health Insurance program will be transferred to either Medicaid
or the health insurance exchange in 2014.
Medicare Advantage payments will be reduced over a three-year period beginning
in 2011. The rates for Medicare Advantage will be the same as those for
traditional fee-for-service Medicare by 2014.
Funding for the recently passed version of health care overhaul will be through
a 5.4 percent surcharge tax on an individual whose adjusted gross income is
above $500,000 and $1 million for joint returns; estimated to raise $460.5
billion through FY2019. In addition, a 2.5 percent excise tax on the sales and
leasing of medical devices will fund health care and is projected to raise $20
billion over 10 years.
Although it’s come a long way in the House, health care overhaul seems to
continue to have a long road ahead. With a renewed hope of passing it’s version
of health care overhaul, an exact timeline in the Senate remains to be seen. The
combined Finance Committee (S 1796) and the Health, Education, Labor and
Pensions Committee (S 1679) version has not been released publicly; it was sent
directly to the Congressional Budget Office (CBO) for review on October 26 and
there is currently no projected date as to when the CBO will release the scores.
Even after the CBO scores are released, the Senate version is expected to have
difficulty getting majority support mainly, because of the hot issues of public
option, immigration and abortion.
If the Senate is able to get the 60 votes needed for passage, both the House and
Senate versions will then go to conference committee where they will be
combined. Although both versions contain similarities, they also contain many
differences. Some of the differences are on the more important provisions,
particularly how the new government run health care system will be funded.
Without a timeline in the Senate and the likelihood of difficulty combining the
House and Senate versions, it is improbable that the President will have a final
version of health care overhaul to sign before the end of the year.
Attached are several articles that we found of interest, one of which is a more
in-depth fact sheet on the provisions of Affordable Health Care for America Act
(HR 3962).
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