Battles over cost, taxes, Medicare loom for House health plan

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By Jennifer Haberkorn and Kara Rowland

The House Democrats' health care overhaul bill released Thursday creates a government-run insurance program, provides insurance coverage to 96 percent of all Americans and sets the stage for major battles over politically risky cuts to Medicare, new taxes, high spending and the hot-button issues of abortion and immigration.

The landmark legislation also ensures a fight with the powerful lobby for the pharmaceutical industry by overriding a deal among Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry trade group; the White House; and a Senate committee to help pay for the $1.06 trillion bill.

"There's a lot of political posturing going on right now," PhRMA spokesman Ken Johnson said. "But unfortunately, many people are unrealistic in their expectations of what our industry can contribute to health care reform" without job losses or a decrease in research and development.

Under the House blueprint, nearly all Americans for the first time would be required to purchase health insurance and most large employers would have to provide it, with tax credits available to low- and middle-income people. The proposal would be paid for through new taxes on individuals making more than $500,000, or couples more than $1 million, hoped-for reductions in Medicare waste and a 2.5 percent tax on medical devices not sold in retail stores. The Congressional Budget Office (CBO) said the bill, estimated to have a gross cost of $1.06 trillion, would reduce the deficit by $104 billion through 2019.

House Democrats put the net cost of their bill at $894 billion Thursday, based on CBO projections that penalties paid by companies that don't offer insurance and individuals who do not purchase coverage will lower the final tab. President Obama had set a $900 billion target for the 10-year cost.

Top Democrats said Thursday that they have the votes to pass the bill, possibly by Veterans Day, and praised the progress made in the House and Senate on Mr. Obama's goal to reshape the health care system.

"Leaders of all political parties, starting over a century ago with President Theodore Roosevelt, have called and fought for health care and health insurance reform," House Speaker Nancy Pelosi said while introducing the bill on the West Front of the Capitol, surrounded by her Democratic colleagues.

"Today, we are about to deliver on the promise of making affordable, quality health care available for all Americans, laying the foundation for a brighter future for generations to come," the California Democrat said.

But there are plenty of obstacles ahead as floor debate is expected to start in a week. Even the size of the bill -- 1,990 pages -- has sparked controversy as Republicans say it symbolizes the scope of Democrats' plans. House leaders said Wednesday that they introduced the bill with the understanding that changes would be made as the process moved forward.

The final House draft -- a merging of three committees' work over the past months -- does not have the so-called robust public option, which was favored by liberal Democrats and would have reimbursed doctors based on Medicare rates plus a 5 percent premium. The more moderate version would allow the Department of Health and Human Services to negotiate rates with providers, as private insurers do.