By Jeffrey Young - 06/19/09 02:50 PM EDT
House Democrats introduced a draft healthcare reform bill Friday they say would extend coverage to 95 percent of Americans.
Though the Democrats have established a clear target for expanding coverage, they acknowledged that questions remain about how to pay for the bill, which will require a combination of politically difficult cuts to Medicare and Medicaid along with some new taxes. Healthcare bills being written in the Senate have been estimated to cost more than $1 trillion.
Democrats may have institutional advantages in the majority-rules House that could make it easier to move a bill by their self-imposed deadline but they also face the same challenges as the Senate: how to write a bill that extends health coverage to all Americans, reduces the rate of growth in healthcare spending and is paid for with spending cuts and tax increases over 10 years.
The measure, a draft of which will be made public Friday, is based on President Obama’s campaign platform. In a statement, Obama said the bill "represents a major step toward the our goal of fixing what is broken about health care while building on what works."
Waxman, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and House Education and Labor Committee Chairman George Miller (D-Calif.) are the principal authors of the bill, which is named after former Energy and Commerce Committee Chairman John Dingell (D-Mich.).
The three panels will begin hearings on the legislation next week and mark up the bill in July. House Speaker Nancy Pelosi (D-Calif.) has set a July 31 deadline for passage.
The legislation would establish national and/or state-based health insurance exchanges for individuals and small businesses to shop for plans; would provide subsidies to individuals and families earning up to four times the federal poverty level; would offer tax credits to small businesses; and would expand Medicaid to cover everyone earning up to 133 percent of the poverty level.
All Americans would be required to obtain insurance unless they can prove a financial hardship. Employers would be required to either offer health benefits or pay the equivalent of 8 percent of their payroll into a government fund. Some small businesses would be exempt; the Democrats did not specify which ones.
The bill also includes a controversial proposal to create a government-run health plan that would compete for business with private insurance companies. The so-called public plan option would be financed by premiums, not government subsidies, and be subject to the same insurance market rules as private insurers.
The public plan is arguably the biggest point of contention in all of healthcare reform. Not only is it strenuously opposed by the health insurance industry, big business interests and virtually all Republicans, but centrist House Democrats have made clear they could withhold their support for healthcare reform if the public option were included.
“I’m anxious to take on those people who are opposing the public option,” Rangel said.
The three chairmen maintained that the public plan is an essential part of their program because it would offer consumers an additional choice of health coverage and serve as a check on the insurance industry.
“We continue to believe that this is an important, important component of real healthcare reform,” Miller said.
Private insurance companies would also be subject to new restrictions. They would be forbidden to deny coverage or benefits based on pre-existing conditions or peg premiums to health status, gender or other factors and could not set an annual or lifetime ceiling on benefits. In addition, plans would have to establish an annual limit on how much members can pay out of pocket.
The Democrats would not say how much their bill would cost but vowed that it would meet their budgetary rules and be fully offset over 10 years. “We are going to pay for this bill,” Waxman said.
Waxman indicated that the committees are looking closely at a package of $600 billion in Medicare and Medicaid cuts Obama presented this month.
In addition, the Associated Press reported Friday that the Ways and Means Committee is eyeing a slate of tax increases outside of the healthcare system, such as a national “value-added tax,” increased taxes on upper-income individuals, a higher Medicare payroll tax, and hikes in taxes on sugary drinks and alcohol.
The Ways and Means and Senate Finance committees are also looking at taxing some workplace health benefits, though the idea is strongly opposed by business and labor interests. The notion has generated less interest in the House than the Senate, where Finance Committee Chairman Max Baucus (D-Mont.) is understood to be seriously considering it.
The Senate has attracted the lion’s share of the attention for its efforts on healthcare reform this year but the work of the two primary committees has run up against some difficult obstacles in recent days.
The Senate Health, Education, Labor and Pensions (HELP) Committee began marking up its version of the healthcare reform bill this week but its progress has been marred by uncertainty and partisan bickering.
The HELP Committee opened its markup Tuesday under the black cloud of a CBO score tagging the bill with a cost estimate exceeding $1 trillion and an analysis that it would lead to a net increase in just 16 million people with health coverage. The panel’s draft bill is also missing significant portions, including the public plan and means to offset the new spending.
In the meantime, the Senate Finance Committee postponed its own markup after getting preliminary CBO estimates showing its bill could cost as much as $1.6 trillion.
Trying to get that price down to about $1 trillion, Finance Committee members are considering scaling back the size and availability of subsidies for health insurance, among other changes designed to make the bill cheaper. The Finance Committee also has not settled on whether to include some form of public option, a deal-breaker for Republicans.
This story was updated at 3:40 p.m.