House Democrats announce health-care bill

House Speaker Nancy Pelosi says new health care legislation will make affordable, quality health care available to nearly all Americans and represents a historic step. (Oct. 29)
By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Friday, October 30, 2009

After six months of dealmaking, House Democratic leaders introduced a health-care reform bill Thursday that would expand coverage to almost all Americans and overhaul the insurance industry while asking the wealthiest taxpayers to pay much of the tab.

House Speaker Nancy Pelosi (Calif.) announced the 10-year $894 billion package on the Capitol steps, where she was surrounded by Democrats from all factions of her diverse caucus. "Leaders of all political parties, starting over a century ago with President Theodore Roosevelt, have called and fought for health-care reform and health-insurance reform," Pelosi said. "Today we are about to deliver on the promise."

The House bill is similar to its Senate counterpart, although a handful of key differences could make for protracted negotiations this year. For example, the House's surtax on those earning more than $500,000 a year is a non-starter in the Senate. And House Democrats oppose the Senate's main revenue measure, an excise tax on high-value, or "Cadillac," health-insurance plans. Both bills include a government insurance plan, but the Senate version would allow states to opt out of participating.

Under the House bill, 36 million uninsured Americans would become eligible for coverage. About 15 million of the poorest children and adults would enroll in Medicaid. An additional 21 million would purchase coverage on a new national insurance exchange, where private plans would compete with a "public option" backed by the federal government.

An analysis of the House bill released late Thursday by the nonpartisan Congressional Budget Office estimated that 6 million people would choose a public plan, making it a relatively small player, despite the issue's outsize role in the health-care debate.

The House bill would require most individuals to buy insurance and would require employers to provide health coverage to their workers or face a penalty, although employers with payrolls of less than $500,000 annually would be exempt.

House Minority Leader John A. Boehner (R-Ohio) derided the bill's 1,990 pages as 620 pages longer than President Bill Clinton's failed reform plan 15 years ago. The conservative Republican Study Committee warned of "higher taxes, job-killing employer mandates, choice-restricting individual mandates, government-run insurance, budget-busting entitlement expansions, and countless provisions that set Washington bureaucrats firmly between you and your doctor."

For weeks, House Democratic leaders have huddled behind closed doors, seeking to stitch together a 218-vote majority from disparate Democratic blocs. As many as 40 conservative Democrats remain unhappy with abortion-related provisions and are threatening to vote no. But with a debate on the House floor expected to begin late next week, most major differences appear to have been bridged.

Before the official unveiling, House Democrats gathered in the basement of the Capitol for a final briefing with Pelosi and other leaders, and they agreed that the time for compromise had arrived. Rep. Earl Pomeroy (D-N.D.), a prominent fiscal hawk, stood up to announce that he would support the measure, drawing a round of applause loud enough to be heard outside the room. "At the end of the day, we've got to pass something," said Rep. Jim McGovern (D-Mass.).

The House measure would pare $104 billion from projected budget deficits over the next decade, according to the CBO, and would "slightly reduce" projected deficits in the following decade. The CBO's forecast for the House bill is less rosy than for the bill that passed the Senate Finance Committee this month, but it is significantly more positive than the analysis of the original House package, which predicted that costs would exceed revenue after 2019.

In addition to expanding coverage, the House bill would impose strict new rules on insurance companies, including a ban on denying coverage based on preexisting conditions. The legislation would end a federal antitrust exemption that has long protected the industry from investigations into price-fixing and other practices, and it would institute a review process into premium increases.

House leaders touted the bill's $894 billion net price tag, but the gross cost of expanding Medicaid, subsidizing insurance for low and middle-income people and providing tax credits to small businesses would exceed $1 trillion over 10 years. The net cost is lower because it includes fees paid by individuals who don't buy coverage and businesses that don't provide it.

An earlier House reform plan was tagged with a $1.042 trillion net price tag, but House leaders squeezed subsidies while expanding Medicaid eligibility, a cheaper coverage option. Also missing from the new bill is an expensive adjustment to Medicare pay for physicians.

Like the Senate measure, the House bill would be financed through new taxes and more than $400 billion in cuts to government health programs, primarily Medicare. But the composition of the tax increases is starkly different. The Senate is expected to propose a series of annual fees on the health-care industry and a 40 percent tax on high-cost insurance policies; the House would raise the bulk of its new revenue -- $460 billion over the next decade -- through a 5.4 percent surtax on the richest 0.3 percent of tax filers.

House Democrats remain adamantly opposed to the Senate's tax approach, arguing that a tax on high-cost health policies would strike many middle-class families, including union members who have bargained away wages in exchange for better health benefits.

Staff writer Ben Pershing contributed to this report.

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