Health Reform Bill Coming Out Of House

The debate on healthcare in the United States rages on amidst the emergence of a House health bill. Many Americans are simply overwhelmed and polarized by the debate, with so much at stake and a clear dose of partisan politics thrown into the mix. All that can be done is try to make sense of what is currently being proposed and continue to offer counter-solutions until a compromise bill is reached.

Right now, the proposed legislation is going to cost the government a whopping $1.05 trillion over the next decade. This should be offset by tax increases and spending cuts, and it should extend insurance coverage to an additional 36 million Americans and establish a government public option program that would compete with private insurance companies. Democrats are hailing the bill as a historic step in realizing the goal of universal healthcare, and as a tribute to President Franklin Delano Roosevelt.

Republicans, on the other hand, criticize the bill for creating new bureaucracies without addressing the existing problems in the healthcare system. The House Minority Leader, John Boehner of Ohio, said: “It’s going to kill jobs with tax hikes and new mandates in it.” The Republican Party as a whole is not alone in criticizing the bill. Doctors are complaining about a provision being removed that staved off deep cuts to their Medicare payments, while hospitals are concerned that the public option would underpay them.

Pharmaceutical companies are bitter over large cuts in government payments, adding to the list of those who worry about being underpaid by the national public option. However, the harshest criticisms seemed to come from employers, who claim they will be slammed with higher taxes, and insurance companies, which claim that the public insurance option will drive them out of business. It is estimated that insurance companies make only a 3% profit on the premiums they charge, and their concerns are that a more affordable public plan will undermine their business. Other concerns include the fact that having the federal government as both a regulator and a player in health insurance will constitute a conflict of interest.

The public option is actually the most dramatic change to the new bill, and easily one of the most controversial. Over time, the bill would guarantee 96% of legal Americans health insurance by the year 2013, up from 83% in 2009. However, it mandates health insurance coverage under penalty of a fine that could run as high as 2.5% of an American’s total income. The bill would impose a 5.4% surtax on Americans earning more than $500,000 per year and on families that earn more than $1 million per year. It also would penalize employers who did not offer health insurance to its employees.

Other notable provisions in the bill include one that prevents insurance companies from denying coverage to Americans with any pre-existing health conditions or to those who get sick while on a particular plan. There is a staggering amount stuffed into a single health reform bill that spans almost 2,000 pages. The bottom line is that health insurance is likely to change for a massive number of Americans, as will their tax situations. It will be interesting to see how much more the new health reform bill changes before President Obama signs it.