Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Your Practice

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

Your article was successfully shared with the contacts you provided.

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.


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.


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.”


House leaders allocated some time this evening for Rep. Bart Stupak, D-Mich., to offer an AHCAA bill amendment that could prohibit any public option plan created by the AHCAA bill, and any plans sold through the “health insurance exchange system” that might be established by the bill, from using federal funds to pay for abortions, except in cases involving rape, incest, or threats to the life of the mother.

House leaders also set aside time for the House to consider the Commonsense Health Care Reform and Accountability Act, the Republican alternative to the current version of H.R. 3962. The CHRCAA proposal was offered as an “amendment in the nature of a substitute” to H.R. 3962.

The CHCRAA proposal, introduced by House Minority Leader John Boehner, R-Ohio, would rely on mechanisms such as risk pools, reinsurance programs and association health plans to reform the health insurance market. The proposal also would let individuals cross state lines to buy health coverage.

A Republican summary of the proposal is available here.

Rep. Dave Camp, R-Mich., a proposal supporter, said the Congressional Budget Office has estimated that the CHCRAA proposal might cut premiums up to 3% for employees of big businesses, up to 8% for individuals who buy their own coverage and up to 10% for employees of small businesses.

“CBO has not made a claim that the Democrats’ plan would lower premiums at all,” Camp said.

Rep. John Tierney, D-Mass., who spoke in opposition to the proposal, argued that letting consumers cross state lines to buy coverage would lead to a regulatory “race to the bottom.”

“You pay less because you get less,” Tierney said.

Republicans “have done exactly nothing” about improving the U.S. health finance system, Tierney said. “The only ones they want to make happy now are the private insurance companies,” he said. “While they sat idle since 1995, family health insurance policy premiums went from 7% of median income to 17%.”

Tierney attacked the Republicans’ reliance on risk pool expansion to help people with preexisting conditions.

“We’ll end the discrimination against people with preexisting conditions,” Tierney said. “They’ll study it.”


The House Rules Committee held a hearing on H.R. 3962 Friday. Republicans complained bitterly during the hearing that the Democrats had given them only a short time to read and react to it, and that many Republican amendments that had been approved at the committee level, such as amendments concerning rural health efforts, are now missing from H.R. 3962.

Republicans also protested that the 4 hours Democrats had allotted for floor debate on the bill was too little.

When H.R. 3962 session began today, Democratic women who serve in the House lined up to make “requests for uninanimous consent” to “revise and extend their remarks” on the bill when the remarks were printed in the Congressional Record. Each member followed the request with an enthusiastic explanation of why she was supporting the bill.

Republicans protested the lack of time for debate by disrupting the Democrats’ unanimous consent ceremony.

Republicans raised dozens of objections and points of order, and asked whether House leaders would give them more time to speak, to compensate for the time the Democrats were devoting to the unanimous consent requests.

Later, when Republicans were interrupting Rep. Mary Jo Kilroy, D-Ohio, just as she said, “I would like to request unanimous consent — “, Kilroy asked, “Do I have a right to complete my sentence without being censored by the other side?”

When full-blown floor debate got under way, many Republicans used the terms “job killer” and “government takeover of health care” to describe the bill.

Rep. Pete Sessions, R-Texas, said H.R. 3962 may appear to preserve the private health care system but is structured in such a way that the government would have to take it over.

Other Republicans said the bill would surprise many supporters by increasing the cost of coverage for most people rather than reducing the cost.

Some Democrats talked about their own pre-existing conditions and times in their life when they themselves had no health insurance. Rep. Debbie Wasserman Schultz, D-Fla., said she would be considered uninsurable if she had to buy health insurance on her own because she has had breast cancer.

Rep. John Shadegg, R-Ariz., held up Maddie, the 7-month-old daughter of his chief of staff, and said Maddie knows that H.R. 3962 is bad for her and her mother. Maddie focused mainly on playing with Shadegg’s microphone.

Maddie received a bipartisan round of applause after Shadegg finished, but House members were warned that using guests as props violates House rules.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.