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January 7, 2010
Not There Yet: Comparing the House & Senate Health Care Reform Bills
On December 24, just as Santa was hitching his reindeer, the Senate passed a historical bill in support of health care reform. The gravity of the bill has been compared to the Social Security Act of 1935. Analysts point out, however, that the current health care reform bill lacks bipartisan support—representatives voted 220 to 215, divided straight along party lines. Furthermore, the differences between the House and Senate bills must yet be negotiated.
This article takes a brief look at some of the differences—potential sticking points—between the bills passed by the House and the Senate.
Individual mandate: Both proposals require that Americans hold a minimum amount of health insurance, or face a financial penalty. The penalties differ slightly between the House and Senate proposals, but both exempt American Indians, people with religious objections, and people suffering financial hardship.
Employer contribution: Both proposals require most employers to contribute to the cost of health insurance for at least some of their employees. The House version requires employers with a payroll of $500,000 or more to provide employee coverage, or pay a federal tax penalty. The Senate version does not stipulate that employers must supply insurance coverage, but companies with 50 or more full-time employees will face penalties if they do not. In the Senate version, employers who do not supply coverage will be required to provide vouchers to low- and middle-income earners who will be expected to buy their own coverage from an insurance exchange.
Insurance exchange: The House proposal supports the creation of a national insurance exchange, whereas the Senate version allows the states to organize their own exchanges. Both proposals are open to individuals who do not qualify for insurance through their employer or a government program. The Senate version allows access to insurance exchanges for employers with less than 100 employees, while the House proposes a graduated approach—twenty-five or fewer employees in the first year of the program, 50 or fewer in the second year, and 100 or fewer in the third year.
Public option: The House supports a public insurance option which would be operated on a non-profit basis by the government. This public insurer would negotiate directly with hospitals, doctors, and pharmaceutical companies. The Senate proposal does not include a public option—rather the government would enter into contracts with insurance companies to offer two national health plans, one of which would be operated as non-profit.
Expand Medicaid: The House proposes to extend Medicaid coverage to everyone with incomes less than 150 percent of the poverty level ($33,075 for a family of four), while the Senate proposes to cover everyone with incomes less than 133 percent of the poverty level ($29,327 for a family of four). In both proposals the federal government would cover around 90 percent of the costs, with the states making up the balance. This works out favorably for the states because they currently contribute 43 percent to Medicaid costs on average.
Insurance regulations: Both proposals prohibit insurers from denying coverage or charging higher premiums because of a person’s medical history or health condition. The House proposal goes further, however, by outlawing price fixing and bid rigging, and removing the current exemption of insurance companies from antitrust laws. The House is also more generous in limiting premiums for older people to no more than double that of younger people, while the Senate proposes a cap on premiums that are no more than three times higher for the elderly. The Senate also requires insurance companies to devote more of their income to medical claims by reducing their administrative overheads and spending at least 85 cents in every dollar on medical reimbursements.
Illegal immigrants: The House proposal allows illegal immigrants to purchase coverage from insurance exchanges, while the Senate version does not.
Abortion: In the House proposal, insurance plans can choose to cover abortion, but insurance exchange and public plans will exclude it. In the Senate proposal, health plans may choose to include abortion coverage, but states may elect to ban it. Moreover, people who do choose a plan that includes abortion will be required to pay the abortion component as a separate premium.
Out-of-pocket expenses: Both proposals limit out-of-pocket spending—in the House version, $5000 for individuals and $10,000 for families; in the Senate version, $5950 for individuals and $11,900 for families. These limits would be reduced for people with income less than 400 percent of the poverty level—around $88,000 for a family of four.
Paying for it: The House proposes to pay for reform via a 5.4 percent tax on very high income earners (families with a combined income of $1 million or more, and individuals earning more than $500,000), plus a 2.5 percent tax on medical devices sold in the United States, combined with savings in reduced aspects of Medicare. The Senate proposal is more complicated: a 40 percent tax on “Cadillac” insurance premiums, annual fees for pharmaceutical, medical device and insurance companies, savings against reduced aspects of Medicare, and a 10 percent tax on indoor tanning services.
In both cases, the proposed legislation is intended to be fully implemented by around 2014. The next step, however, is to reconcile the differences between the bills passed by the House and the Senate. Republicans and lobby groups are also expected to make the passage difficult.
Robin Stone, M.D.
Insight Psychiatry
13123 Rosedale Hill Ave.
Huntersville, NC 28078
704-948-3810
Further reading:
Murray, S & Montgomery, L 2009 Senate passes health care bill, must now reconcile it with House, The Washington Post.
Pear, R 2009 Senate Passes Health Care Overhaul on Party-Line Vote, The New York Times.
