Health reform would tax the rich, near-rich

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By Jennifer Haberkorn

Americans would face new requirements to obtain health insurance or face hefty tax penalties as part of a $1.5 trillion health care reform plan introduced by House Democrats on Tuesday that will be paid for, in part, by a new 5.4 percent tax on the wealthiest Americans.

Employers would have to provide coverage to employees or face penalties of their own under the 1,018-page bill, released by Democratic leaders and chairmen of three committees that share jurisdiction over health care. It would also create a public health insurance program and impose a series of new regulations on the insurance industry, including a ban on denying coverage of pre-existing conditions.

"This is a defining moment for our country," said Rep. Henry A. Waxman, California Democrat and chairman of the House Energy and Commerce Committee. "We are about to undertake what has eluded so many presidents and Congresses for far too long and that is the objective of getting good quality, affordable health care insurance to every American."

The health care reform bill, which was praised by President Obama for creating new competition for insurance companies, would reshape the country's focus on health care coverage as a right of all Americans and a responsibility of the government.

The bill's release was met with enthusiasm by health care advocates but slammed by the industry and other business groups.

A "pay or play" mandate on businesses drew condemnation as a job killer from a group of more than 30 trade associations, including the U.S. Chamber of Commerce, the Business Roundtable and the National Retail Federation.

"We believe that some of the approaches under consideration in the House legislation would not improve the system, but in fact would jeopardize the parts of the system that currently work," the groups said in a letter to members of the House.

The Pharmaceutical Research and Manufacturers of America (PhRMA), the trade group of the pharmaceutical industry, said it won't support the bill because of changes in the Medicare Part D benefit, which it said would constitute a tax increase on seniors.

The bill was praised by various health care advocacy groups such as AARP. Families USA Executive Director Ron Pollack said the bill would "ensure that virtually all Americans have access to high-quality, affordable health coverage and care."

The bill still faces opposition from factions of the Democrat caucus and has already prompted widespread criticism from Republicans. A group of fiscally conservative "Blue Dog" Democrats stalled the release of the bill last week over concerns that it be deficit neutral, control costs and include stronger protections for small businesses and rural patients. The group said it plans to incorporate more cost cutting measures into the bill.