House Passes H.R. 3962; Focus Shifts To Senate

Members of the U.S. House of Representatives voted 220-215 Saturday to pass H.R. 3962, the Affordable Health Care for America Act bill.

The Democrats voted 219-39 for the 1,990-page AHCAA bill. Some moderate and conservative Democrats voted against the bill, and Rep. Joseph Cao, R-La., was the only Republican who supported it. The bill needed 218 votes to pass, and it crossed that threshold at 11:07 p.m. EST.

The complete list of House members who voted for and against the bill is available here.

The House began debating H.R. 3962 around 10:30 a.m.

Shortly before the final vote started, House members agreed 240-194 to approve an amendment to H.R. 3962 that would prevent any health plans created by the bill from paying for most abortions, and they rejected a Republican substitute for the bill by a 176-258 margin.

The center of health bill action has now shifted to the Senate. The Senate is still in the process of combining drafts from the Senate Finance Committee and the Senate Health, Education Labor and Pensions Committee. “We realize the strong will for reform that exists, and we are energized that we stand closer than ever to reforming our broken health insurance system,” Reid said in a statement issued after the House voted.

THE BILL

H.R. 3962 would require health insurers to sell coverage on a guaranteed issue, mostly community-rated, basis and attempt to improve the quality of the risk pool by requiring most people to have health coverage. If the Internal Revenue Service imposed the same penalties on individuals who violated the health ownership and penalty tax rules that it now imposes on individuals who violate existing tax requirements, some people who violated the rules could go to prison, critics of the bill say.

To pay for health care subsidies, the bill would impose a 5.4% surtax on individuals with annual income over $500,000 and couples with annual income over $1 million. All but the smallest businesses would have to choose between offering health coverage or paying an 8% payroll tax.

Other provisions would cut Medicare provider reimbursement rates and support for Medicare Advantage plans and impose a $2,500 annual cap on flexible spending account contributions that would be indexed for inflation.

House leaders created H.R. 3962 by combining separate health bills produced by the House Energy and Commerce, Education and Labor, and Ways and Means committees.
President Obama and AARP, Washington, supported H.R. 3962. America’s Health Insurance Plans, Washington, and the Blue Cross and Blue Shield Association, Chicago, opposed it.

REACTIONS

Rep. John Dingell, D-Mich., chairman emeritus of the House Energy and Commerce Committee, who has been introducing national health insurance bills since he entered the House in 1955, says implementing H.R. 3962 would provide coverage for 96% of all Americans. “It offers everyone, regardless of health or income, the peace of mind that comes from knowing they will have access to affordable health care when they need it,” he says.

Cao says he voted for the bill because he was happy about the passage of the abortion funding amendment and believes the bill would be good for his constituents.

Critics of the bill say that the effects of the bill will be far different than most supporters realize, and that well-intended provisions, such as efforts to limit the difference between the rates insurers can charge the oldest enrollees and the youngest, will end up making coverage far more expensive for young people who do not qualify for subsidies.

America’s Health Insurance Plans, Washington, says that the Medicare Advantage cuts proposed in H.R. 3962 would force millions of beneficiaries out of that program, and that the bill would do little to hold down the actual cost of health care.

“Health plans strongly support comprehensive health care reform,” AHIP President Karen Ignagni says in a statement.

But, “without real and effective measures to bend the cost curve, families and employers will not be able to afford coverage and health care costs will rise at a rate much faster than the overall economy is able to sustain,” Ignagni says.

The National Association of Insurance and Financial Advisors, Falls Church, Va., notes that H.R. 3962 contains many provisions that NAIFA has long supported, such as affordability credits, wellness and prevention provisions, a guaranteed issue requirement, and provisions protecting consumer access to professional agent services.

But, in addition to having concerns about “controversial health provisions” and a provision that would limit use of the McCarran-Ferguson antitrust exemption in the medical malpractice and health insurance markets, NAIFA has concerns about a provision that would appear to expand the Federal Trade Commission’s authority over all lines of insurance, NAIFA President Thomas Currey says.

“NAIFA is dismayed by the sweeping changes to the regulation of all lines of insurance in the context of a health reform bill,” Currey says. “We continue to believe that the health care reform challenge can be met by bringing millions of uninsured Americans into the system and reducing the high cost of health care for everyone. We look forward to working with the Senate and the reconciliation conferees to address our concerns.”

The American Benefits Council, Washington, a group that represents large employers, says H.R. 3962 would hurt the private health insurance system so badly that many employers would drop their health plans and choose to pay the proposed 8% payroll tax penalty.

The Senate is now “the last hope for a balanced, responsible measure that might have some chance for bipartisan support,” James Klein, president of the council.

The Independent Insurance Agents & Brokers of America, Washington, is criticizing the tax changes, and a provision that would get an arm of the Small Business Administration into the small group health insurance consulting business.

House leaders spent months negotiating with moderate members of the House, but “the ‘revised’ bill closely resembles the original bill,” IIABA President Robert Rusbuldt says. “We seem to be back on square one: A bad bill that includes a ‘public option’ and deprives the American people of true choices in their health care.”