House delivers healthcare reform victory in late-night session
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The Affordable Health Care for America Act, HR 3962, which is estimated to cost $1.1 trillion over 10 years, passed with the support of only one Republican, and was opposed by 39 Democrats. The bill now moves onto the Senate, where legislators are working to merge HR 3962 with a Senate version of reform.
However, the House and Senate bills will have to reconcile several of their differences. For instance, the House bill would levy a 5.4 percent tax on Americans earning more than $1 million, and a 1.5 percent tax on those who make more than $500,000 but less than $1 million—a tax measure not included in the Senate’s legislation.
Perhaps more controversial is the House’s creation of a public insurance option to be offered through a health insurance exchange to individuals and small businesses. Also, those companies and individuals, with the exception of small businesses, will be taxed if they do not provide or possess health insurance.
Under the House proposal, beginning in 2013, individuals are required to have health insurance coverage that is either a “grandfathered plan,” a government plan (Medicaid or Medicare), an employer-based plan (until 2018) or an individual or group plan that meets or exceeds the qualifications of the federally-defined minimum benefit plan (Basic Plan), or pay a 2.5 percent of income tax penalty.
In contrast, the Senate Finance Committee proposal (one of two Senate healthcare reform proposals) authorizes $6 billion in funding for a co-op program to foster the creation of non-profit, member-run health insurance companies that serve individuals in one or more states. The Senate also is considering a private-public option, which would include an opt-out clause for states that do not wish to participate.
The House bill reduces payments for Medicare Advantage to 100 percent of Medicare fee-for-service spending by 2013 and establishes quality bonuses for plans with high quality scores in markets with low Medicare fee-for-service spending and high Medicare Advantage enrollment. By 2019, the “donut hole,” or coverage gap, under Medicare Part D is eliminated, under the legislation's projection.
Much to the ire of the medical industry, the House bill also maintained a 2.5 percent tax on medical device makers, as well as billions of dollars in rebates from pharmaceutical companies. HR 3962 also maintains changes to payments for imaging services. The bill changes Medicare payments for advanced diagnostic imaging procedures, such as MRI, CT, PET and nuclear medicine, particularly through an increase in the equipment utilization rate assumption from 50 percent to 75 percent.
According to President Barack Obama, the legislation would “provide stability and security for Americans who have insurance; quality affordable options for those who don’t; and bring down the cost of healthcare for families, businesses and the government while strengthening the financial health of Medicare. And it is legislation that is fully paid for and will reduce our long-term federal deficit.”
Separately, the House is pursuing a companion bill, HR 3961, which seeks to eliminate the sustainable growth rate formula of a 21.2 percent reduction in the Medicare Physician Payment System, otherwise scheduled to occur on Jan. 1, 2010.
While the American Medical Association hailed the passage of the House healthcare reform bill, which will “improve the health system for patients and physicians,” it also called for “swift passage of HR 3961 to secure the stability of the Medicare program.”