House Unveils Health Bill, Minus Key Details

For Immediate Release:

June 20, 2009

Contact:ROBERT PEAR and DAVID M. HERSZENHORN

New York Times

House Democrats on Friday answered President Obama’s call for a sweeping overhaul of the health care system, unveiling a bill that they said would cover 95 percent of Americans. But they said they did not know how much it would cost and had not decided how to pay for it.

The proposal would establish a new public health insurance plan to compete with private plans. Republicans and insurance companies strenuously oppose such an entity, saying it could lead to a government takeover of health care. The draft bill would require all Americans to carry health insurance. Most employers would have to provide coverage to employees or pay a fee equivalent to 8 percent of their payroll. The plan would also end many insurance company practices that deny coverage or charge higher premiums to sick people.

“Health insurance for most American families is just one big surprise,” said Representative George Miller of California, the chairman of the Education and Labor Committee. “When you go to use it, you find out it’s not quite as it’s represented, and you spend hours on the phone with exclusions and discussions and referrals to other legal documents that you didn’t have at the time you purchased it.”

The 852-page House bill, as expected, is more expansive than the legislation taking shape in the Senate, where work on the issue bogged down this week after early cost estimates came in far higher than expected. The initial price tag for a measure drafted by the Senate Finance Committee, for example, was $1.6 trillion over 10 years.

Similar sticker shock could hit House members when they see the cost of their bill, which incorporates many ideas from health policy experts about how to fix the health system.

Industry critics of the emerging Senate bill are likely to have even more objections to the House version, but House Democratic leaders can probably push their measure through on a party-line vote.

Under the House bill, health insurance would be regulated by a powerful new federal agency, headed by a presidential appointee known as the health choices commissioner.

The draft bill was unveiled by three committee chairmen — Mr. Miller; Henry A. Waxman of California, chairman of the Energy and Commerce Committee; and Charles B. Rangel of New York, chairman of the Ways and Means Committee. The chairmen, all first elected in the 1970s, have worked together in secret for months to develop a single bill.

The proposal would expand Medicaid eligibility, increase Medicaid payments to primary care doctors and gradually close a gap in Medicare coverage of prescription drugs known as a doughnut hole. The bill would also reverse deep cuts in Medicare payments to doctors scheduled to occur in the next five years. Taken together, these provisions could significantly drive up the bill’s cost.

The bill would impose a new “tax on individuals without acceptable health care coverage.” The tax would be based on a person’s income and could not exceed the average cost of a basic health insurance policy. People could be exempted from the tax “in cases of hardship.”

Asked why there was no cost estimate for the bill, the House Democratic leader, Steny H. Hoyer of Maryland, said: “Until we have a final product, we are reluctant to ask the Congressional Budget Office for a score. But whatever we do will be fully paid for.”

House Democrats pledged to offset the cost of their legislation by reducing the growth of Medicare and imposing new, unspecified taxes.

Republicans, who had no role in developing the bill, denounced it as a blueprint for a vast increase in federal power and spending.

“Families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” said the House Republican leader, John A. Boehner of Ohio, who raised the specter of federal bureaucrats’ making medical decisions for millions of people.

Business groups also were not pleased. “There is enough to see here already to know that we would be compelled to oppose this bill,” said E. Neil Trautwein, a vice president of the National Retail Federation.

But John J. Sweeney, president of the A.F.L.-C.I.O., praised the House bill, saying it provided “a road map for what health care reform should look like.”

The House chairmen described their bill as a starting point in a battle that would dominate Congress this summer and ultimately involve the full range of interest groups in Washington. The three House committees plan to hold as many as six hearings on the bill next week. Mr. Waxman said lawmakers were committed to considering all ideas, even a proposal to tax some employer-provided health benefits, which he opposes.

The House bill shows what Democrats mean when they speak of a “robust” public insurance plan.

Under the bill, the public plan would be run by the Department of Health and Human Services and would offer three or four policies, with different levels of benefits. The plan would initially use Medicare fee schedules, paying most doctors and hospitals at Medicare rates, plus about 5 percent. After three years, the health secretary could negotiate with doctors and hospitals.

But the bill says, “There shall be no administrative or judicial review of a payment rate or methodology” used to pay health care providers in the public plan.

Scott P. Serota, president of the Blue Cross and Blue Shield Association, said, “A government-run plan that pays based on Medicare rates, for any period of time, is a recipe for disaster.”

The bill would limit what doctors could charge patients in the public insurance plan, just as Medicare limits what doctors can charge beneficiaries.

In setting payment rates for doctors and hospitals under the public plan, the bill says, the government should try to reduce racial and ethnic disparities and “geographic variation in the provision of health services.”

The public plan would receive an unspecified amount of start-up money from the federal government. After that, it would have to be self-sustaining.

The bill would require drug companies to finance improvements in the Medicare drug benefit. Drug companies would have to pay rebates to the government on drugs dispensed to low-income Medicare beneficiaries.

The bill would expand Medicaid to cover millions of people with incomes below 133 percent of the poverty level ($14,400 for an individual, $29,330 for a family of four). The cost would be borne by the federal government.

The government would also offer subsidies to make insurance more affordable for people with incomes from 133 percent to 400 percent of the poverty level ($43,300 for an individual, $88,200 for a family of four).

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