After months of struggle by a growing movement outside and inside the halls of Congress, House Democrats released a health care reform plan they say will extend coverage to millions now without it and create a new option of government-run insurance. A vote is expected next week on the plan which House leaders say reflects the conditions set forth by President Obama.
The bill released today includes a public option that incorporates compromises demanded by moderate and conservative Democrats.
The government-run insurance plan would negotiate rates with doctors and hospitals, rather than using prices set by the government. House and Senate liberals had pushed for government-set rates, arguing that these would be more competitive. Liberals say that by tying rates to those of insurance companies, rather than Medicare, the ability of the public option to compete with private insurance companies could be undermined.
Congressional Progressive Caucus co-chair Lynn Woolsey, D-Calf., said she and her allies would continue to fight for a stronger public option.
“It’s not even the fourth quarter,” said Woolsey, who noted the public option had only recently been dismissed as dead by many pundits. “We will be insisting on the option being as strong as it possibly can be.”
Woolsey and other progressive Democrats are set to meet with President Obama later today.
Speaking on the steps of the Capitol, Speaker Nancy Pelosi said Congress was “on the cusp of delivering on the promise of making affordable, quality health insurance available to every American.”
House leaders say the bill, once fully phased in over several years, will extend coverage to 96 percent of Americans.
It works by creating a new government-regulated “exchange” where private companies would sell policies in competition with the government. Federal subsidies would be available to millions of lower income individuals and families to help them afford the policies, and to small businesses as an incentive to offer coverage to workers. Large firms would be required to cover workers, and most people would be required to carry insurance.
The Senate is considering legislation unveiled by Majority Leader Harry Reid earlier this week. It also includes a public option but one that allows states to drop out if they wish, something the House bill does not allow.
Obama declared that House Democrats had reached a “critical milestone” on the road to health care overhaul and offered praise for their inclusion of an option for government-run insurance. He also said the bill “clearly meets two of the fundamental criteria I have set out: It is fully paid for and will reduce the deficit in the long term.”
Republicans reacted immediately with harsh attacks.
Rep. Tom Price, R-Ga., described the measure as a “government takeover that will limit choice, competition and innovation in health care.”
The legislation will be partially financed by an income tax surcharge of 5.4 percent on individuals making at least $500,000 annually and couples making at least $1 million.
Reaction from labor, which has played a leading role in the fight for health care reform, was positive.
“What Speaker Pelosi showed us today is that the majority in Congress will not govern out of fear but will lead with conviction,” declared Any Stern, president of the 2.1 million member Service Employees International Union. “The chorus of ‘no we can’t’ from the insurance industry, special interests and Republicans will not stand in the way of the change demanded in November.”
Although the bill would not take full effect until 2013, there would be immediate creation of a temporary government program to help people turned down by private insurers because of medical problems. After that, insurers no longer could refuse to provide coverage to the sick, nor could they charge more because of poor health of the insured.
The plan also expands Medicaid, the federal-state health program for low income people. It also requires employers to offer insurance to their workers or face penalties.
Pelosi and the Democratic leadership have not resolved disputes over abortion services and health care for immigrants, questions that will have to be settled before the bill can come to a vote.
The House bill also strips the health insurance industry of a long-standing exemption from anti-trust laws and gives the Federal trade Commission the authority to examine the health insurance industry at its own initiative.
While the bill requires the drug industry to for up the $80 billion it promised to contribute toward financing of health care reform it gives the pharmaceutical industry a major chunk of the “market protection” it has been looking for. Big pharma will be essentially free to market in any way it pleases new high-tech drugs that combat cancer, Parkinson’s and other deadly disease for a period of 12 years.
Medical device makers, on the other hand, are not happy with the bill. The bill includes a 2.5 percent excise tax on sales of their products which they say will cost them $20 billion over the next ten years. The Senate bill includes a similar tax on that group of businesses.