Senate Votes for Cloture on Health Care Reform; Bill Inches Towards Final Vote
Despite the fireworks caused by the night-owl Senate vote for cloture on the “Patient Protection and Affordable Care Act” by a margin of 60-40, the real questions remains – what is health care reform going to mean for America? While the Senate and House versions of health care reform legislation are similar in scope, bills contain significant differences in how the legislation will be paid for.
The hotly-contested Senate bill, which does not contain the “public option” insurance coverage provision in its House counterpart, was heralded by President Obama this morning as “a big victory for the American people.” However, given the call for bi-partisanship that emanated from last year’s presidential election, the vote was not a political victory. The vote was so evenly divided down party lines, with every single Republican Senate member opposing the bill, that Democrats were forced to coax votes from waffling Senators such as Joe Lieberman (I-Conn.) and Ben Nelson (D-Neb.) by slicing provisions from the legislation. Specifically, in order to garner Nelson’s vote, amendments were made to the bill’s abortion provisions and a provision was added requiring the federal government to cover Nebraska’s costs for expanded Medicaid coverage after 2016. (No other state is currently slated to receive this benefit.) Additionally, the public option and Medicare expansion program was jettisoned to appease Lieberman and middle-of-the-road Democrats.
The Senate will hold additional procedural votes on the health care bill this week, and a final vote is scheduled for Christmas Eve. If the bill passes (as expected), the Senate version will then head to a conference committee, where it will be merged with a House health care bill passed last month. Both the House and Senate will then have to approve the final version before it goes to President Obama to be signed into law.
Comparing the House and Senate Versions
Both the House and Senate versions require nearly all individuals to maintain a minimum level of health insurance or pay a penalty, with the House version calling for a penalty of 2.5 percent of adjusted gross income over a certain level ($9,350 for singles and $18,700 for couples). Individuals who cannot afford health insurance will receive subsidies to do so. The House bill provides for the creation of a single-payor, government run insurance plan where individuals can obtain coverage; the Senate bill would instead create new nonprofit private plans overseen by the federal government.
After the jump - comparing the House and Senate bills (continued)
Employers also face a much stricter penalty in the House version for not providing insurance coverage to employees. The House bill requires companies with a payroll of more than $500,000 to provide insurance, or face a penalty of up to 8 percent of their payroll. The Senate bill requires companies with more than 50 employees to pay a fee of up to $750 per worker if any of its employees rely on government subsidies to purchase coverage.
Under both versions, insurers would be barred from charging higher premiums based on a person’s gender or medical history (i.e., pre-existing conditions). The Medicaid program would also be significantly expanded under both versions.
The House bill is, overall, the more expensive piece of legislation. The House package finances subsidies by a combination of tax surcharges on wealthy Americans (individuals with annual incomes over $500,000 and families earning more than $1 million would face a 5.4 percent income tax surcharge) and new Medicare spending reductions. The Senate bill also cuts Medicare by approximately $500 billion, and instead of a tax increase for the wealthy imposes a 40 percent tax on insurance companies that offer “Cadillac” (i.e. high end health plans). The Senate bill additionally increases the Medicare payroll tax for those earning more than $200,000.
The “Tab” for the Bills
The non-partisan Congressional Budget Office has said that the Senate bill will reduce the deficit by $132 billion in the first ten years, and another $1.3 trillion between 2019 and 2029. The initial price tag for the Senate bill has been estimated at $849 billion over the next decade. CBO estimates for the House bill have hovered around $1 trillion over the next ten years.
