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.
Rep. Raul M. Grijalva, Arizona Democrat and co-chairman of the Congressional Progressive Caucus, said he was disappointed with the proposal introduced Thursday.
“We worked really hard for the robust [version],” he said. “We hope that we have the opportunity to vote on an amendment that is the robust plan. I think it’s important, win or lose, that for the sake of closure if anything else that we have something on the record about that.”
The CBO estimated that only about 6 million people would end up taking the public insurance plan, the most controversial element of health care reform. The nonpartisan congressional budget watchdog said the plan would likely have “somewhat higher” premiums than the private plans and attract less healthy people who are more costly to insure.
The public option is one of the top reasons Republicans have refused to support the Democrats’ reform plans. They say the final proposal, written behind closed doors, would raise insurance premiums and give the federal government too large a role in health care decisions.
“It’s the over 50 new mandates, bureaucracies, tax hikes, commissions, all of this is going to require tens of thousands of new federal employees, which is clearly designed for a government takeover of our health care system,” said House Minority Leader John A. Boehner, Ohio Republican.
Insurance companies warned the bill, which would impose a series of new restrictions, would undermine coverage and raise premiums for people who already have insurance.
The bill would also require drugmakers to negotiate prices on the products they sell to Medicare participants and require mandatory rebates. Doing so could raise $150 billion in savings from the industry, overriding a deal the pharmaceutical industry to support health care reform.
The deal among PhRMA, the White House and a Senate committee was designed to cap those savings at $80 billion in return for the industry’s support for health care reform.
“We were never bound by that deal,” said House Energy and Commerce Committee Chairman Henry A. Waxman, California Democrat and one of the bill’s chief writers. “We had always had provisions that were outside of that deal.”
Other obstacles remain, even among Democrats themselves.
Conservative Democrats worried about the nation’s debt doubt a CBO analysis that projects the bill would reduce the deficit by $104 billion through 2019. Much of the bill’s cost savings will come in its early years, raising red flags with budget hawks that the bill could increase the deficit beyond the 10-year window that the CBO examines.
Rep. Gene Taylor, Mississippi Democrat, is one of the skeptics.
“I don’t believe it,” he said. “We’re sneaking up on a $12 trillion debt. We have our hands full just keeping the promises we’ve already made to the American people on things like military health care, veterans’ health care, Medicare, Medicaid, Social Security.”
Pro-life Democrats also have threatened to hold up the bill over concerns that taxpayers would have to fund insurance plans that offer abortions. House leaders say they have been careful not change the long-standing federal policy of not funding abortion, but pro-life Democrats say the bill has loopholes.
The Medicare end-of-life planning provision that 2008 Republican vice presidential nominee Sarah Palin said was tantamount to “death panels” for seniors also stays in the bill unveiled Thursday, the Associated Press reported.
The provision allows Medicare to pay for voluntary counseling to help beneficiaries deal with the complex and painful decisions families face when a loved one is approaching death.
“I think the outrageous and vindictive attacks may have backfired to help raise awareness about this problem, which is why it’s been kept in the bill,” Rep. Earl Blumenauer, Oregon Democrat and sponsor of the provision, told the AP.
The bill also would expand the Medicaid program. The CBO said that states would take on $34 billion in new costs over 10 years to cover the approximately 15 million new Medicaid patients.