House Democrats Present Healthcare Reform Bill

The House Democrats introduced a draft healthcare reform bill Friday, June 19, 2009 which they say will cover 95% of Americans.

The principal authors of the bill (named after former Energy and Commerce Committee Chairman John Dingell of Michigan) are House Energy and Commerce Committee Chairman Henry Waxman (D-Calif) and House Education and Labor Committee Chairman George Miller (D-Calif.).

Chairman Waxman stated the Democrats' intentions as “We’ll make sure that at the end of the day, we have a health insurance bill that’ll cover almost all Americans, will hold down healthcare costs, that [will] provide affordable, good-quality health insurance coverage — and we’re going to pay for it.”  Whether this is possible is being disputed by many Republicans and some Democrats.

Hearings on the legislation will begin next week and the bill will be marked up in July.  House Speaker Nancy Pelosi (D-Calif.) has set a July 31 deadline for passage.

Payment for Proposal
Estimates of the costs are ranging from 1 trillion to 1.6 trillion dollars with various methods are being suggested to pay for it.  However, the House Democrats insist it would meet their budgetary rules and be fully offset over 10 years.

Among the methods suggested are:

• Cuts to Medicare and Medicaid (Obama presented a package of $600 billion in Medicare and Medicaid this month),
• National “value-added tax,”
• Increased taxes on upper-income individuals,
• Higher Medicare payroll tax,
• Hikes in taxes on sugary drinks and alcohol,  and
• Scaling back the size and availability of subsidies for health insurance.

Controversial Proposal Included. 
A controversial proposal has been included and seems to be the biggest point of contention. The “public plan option” will create a government-run health plan that would compete with private insurance companies for business.  This option would be financed by premiums rather than government subsidies, and would follow the same insurance market rules as private insurers.

In addition to being opposed by most Republicans, the big business interests and the health insurance industry oppose it.  Even centrist House Democrats are threatening to withhold their support for healthcare reform if the public option is included in the final version.

Under the new restrictions proposed under this option, private insurance companies:

• Could not deny coverage or benefits based on pre-existing conditions,
• Could not peg premiums to health status, gender, or other factors,
• Could not set an annual or lifetime ceiling on benefits, and
• Would have to establish an annual limit on how much members can pay out-of-pocket.

However, the three chairmen maintain their support for the public plan saying it is an essential part of the program because consumers would be offered an additional choice of health coverage plus the option would serve as a check on the insurance industry.

Both the Senate and the House are facing the same problems:  How will they write a bill extending health coverage to all Americans, pay for it over ten years and, at the same time, reduce the rate of growth in healthcare spending?