Narrow passage of a sweeping health care bill by the House of Representatives portends a continuing difficult fight for President Obama and fellow Democrats to get a bill through the Senate and into law.

The House voted 220-215 late Saturday, with 39 Democrats opposed and one Republican in favor, to approve what would be the biggest expansion of health care coverage since Medicare was created more than 40 years ago.

The Affordable Health Care for America Act, or H.R. 3962, restricts insurance companies from denying coverage to anyone with a pre-existing condition or charging higher premiums based on gender or medical history. It also provides federal subsidies to those who cannot afford it. And it guarantees coverage for 96 percent of Americans, according to the nonpartisan Congressional Budget Office.

But turning the bill into law remains uncertain. The Senate must now pass its own version of a health care bill, and Senate Majority Leader Harry Reid of Nevada last week signaled uncertainty over whether that will happen this year.

Once both chambers have passed a bill, a congressional conference committee will merge the two proposals into a consensus version that would require final approval from each chamber and Obama’s signature.

On Sunday, Obama praised the “historic” House vote to pass the bill and called on the Senate to “take the baton” and complete its work.

“For years, we’ve been told that this couldn’t be done,” Obama said, citing the decades of failed health care reform efforts. “Last night, the House proved differently.”

The president called the support by many House members “courageous” in the face of “the heated and often misleading rhetoric around this legislation.”

“Now it falls on the United States Senate to take the baton and bring this effort to the finish line on behalf of the American people,” Obama said. “And I’m absolutely confident that they will.”

However, Republicans and an independent senator who sits with the Democratic caucus signaled Sunday that difficulties remain for Obama on his top domestic priority.

Sen. Joseph Lieberman, an independent from Connecticut, reiterated that he would join a Republican filibuster against a health care bill if it contains a government-run public health insurance option after the chamber’s amendment process.

Speaking on “Fox News Sunday,” Lieberman called the controversial public option, which is in the House bill and the Senate version being prepared by Reid, an unnecessary provision intended to bring government-run health insurance in the future.

“If the public option is in there, as a matter of conscience, I will not allow the bill to come to a final vote,” Lieberman said. He previously has said he won’t oppose opening Senate debate on the bill despite the public option provision, and he maintained that stance Sunday.

Lieberman’s stance is crucial because the Democratic caucus has the minimum 60 votes to overcome a Republican filibuster. Senate Republicans unanimously oppose the public option, though Sen. Olympia Snowe of Maine has floated the possible compromise idea of a trigger mechanism that would mandate a public option in the future if thresholds for expanded coverage and lower costs go unmet.

The lone House Republican who supported the bill, Rep. Anh “Joseph” Cao, told CNN on Sunday he put the needs of his district over the desire of his party.

A lot of my constituents are uninsured. … It was the right decision for the people of my district.
–Rep. Anh “Joseph” Cao, R-Louisiana

Cao’s “yes” vote ended up being unnecessary for House Democrats, but it gave House Speaker Nancy Pelosi license to tout bipartisan support for the controversial measure.

“I felt last night’s decision was the proper decision for my district, even though it was not the popular decision for my party,” said Cao, a first-term representative from Louisiana’s traditionally Democratic 2nd District. “A lot of my constituents are uninsured, a lot of them are poor. It was the right decision for the people of my district.”

Cao acknowledged he extracted some White House pledges to help his district deal with the continuing effects of Hurricane Katrina in exchange for his vote. Asked about the reaction of fellow Republicans, Cao said the party’s leaders “respect my decision, and I respect theirs.”

Also Sunday, Rep. Mike Pence of Indiana, the chamber’s third-ranking Republican, said on the Fox program that Democrats were ignoring the wishes of the American public by pushing through the huge health care bill.

Pence said the health care bill would raise costs, increase the deficit and lead to a government takeover of the health care system.

“I think the American people are deeply frustrated with the liberal establishment in Washington,” Pence said. “If Democrats keep ignoring the American people, their party’s going to be history.”

Democratic Rep. Chris Van Hollen of Maryland responded on the same show that the Congressional Budget Office reported that the House bill would reduce the deficit.

I think the American people are deeply frustrated with the liberal establishment in Washington.
–Rep. Mike Pence, R-Indiana

Van Hollen chided Republicans for failing to confront rising health care costs harming the U.S. economy during the years they controlled the White House and Congress.

“We’ve had a great system for insurance companies,” Van Hollen said, citing large industry profits as Americans face what he called unfair practices such as having coverage denied for pre-existing conditions. “This is a message to the American people; we’re trying to bring down your costs to help more Americans afford health insurance.”

The House vote less than an hour before midnight Saturday was full of drama. With eight seconds left in the voting period, Democrats began counting down and erupted in roars when Pelosi declared, “The bill is passed” and banged the gavel.

Republican lawmakers stood silently across the floor, some with their arms folded across their chests.

“Well, it was about what I thought it would be,” said House Republican Leader John Boehner of Ohio as he quickly exited.

Later, he issued a statement saying the $1.2 trillion legislation would add to the country’s “skyrocketing” debt.

“I came here to renew the American Dream, so my kids and their kids have the same opportunities I had,” Boehner said. “I came here to fight big-government monstrosities like this bill that dim the light of freedom and diminish opportunity for future generations.”

Michael Steele, the chairman of the Republican National Committee, released an equally tersely worded statement.

This is a message to the American people; we’re trying to … help more Americans afford health insurance.
–Rep. Chris Van Hollen, D-Maryland

“Nancy Pelosi and her liberal lieutenants made a lot of promises today to get the votes they desperately needed,” he said. “Make no mistake — the Democrat leadership’s assurances were based on political expediency, not principle. Anyone receiving a promise from Pelosi is guaranteed to be disappointed in the end when their votes are no longer needed.”

Earlier in the day, Obama met behind closed doors with Democrats to shore up support for the bill, calling it a chance of a generation.

In the run-up to the vote, Republicans and conservative Democrats joined forces to pass an amendment to the bill to prohibit federal funds for abortion services.

It was considered a big win for them and for the U.S. Conference of Catholic Bishops, which used its power — especially with conservative Democrats in swing congressional districts — to help force Democratic leaders to permit a vote on the amendment.

The prohibition, introduced by Democratic members — including Rep. Brad Ellsworth of Indiana and Rep. Bart Stupak of Michigan — would exclude cases of rape, incest or if the mother’s life is in danger.

The GOP accounted for 174 of the votes in favor of the amendment, with one Republican voting “present.”

On the Democrats’ side, 64 voted for the measure, and 194 voted against.

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]]> http://www.klexus.com/despite-house-approval-health-care-reform-faces-tough-battle.html/feed 5 http://www.klexus.com/health-care-reform-contains-tax-increases-hidden-in-plain-sight.html http://www.klexus.com/health-care-reform-contains-tax-increases-hidden-in-plain-sight.html#comments Wed, 24 Dec 2008 03:11:58 +0000 admin http://www.klexus.com/?p=16

To pay for health care reform, you’ll find billions of dollars in tax increases tucked inside the two major bills now before Congress – with each taking a vastly different approach to who ends up paying.

Will it be the wealthiest among us, as proposed by the House bill, which levies a 5.4 percent income tax surcharge on those earning more than $500,000 a year?

Or might it be a broad swath of the middle class, hit by an array of tax code changes on medical expenses and taxes levied on insurance policies, drug manufacturers and others in the health industry, which say they’ll pass these costs on to consumers?

The final outcome may be parts of both approaches – but any way you cut it, someone will be paying higher taxes to support the costs of reform. Those costs include subsidies for some families to help them buy health insurance, starting in 2013 or 2014, and expanded government coverage for some.

Here’s a quick look at the tax proposals in each of the major bills:

House bill: It would raise about $46 billion a year by levying an income tax surcharge on single people earning more than $500,000 a year and couples earning more than $1 million. Only 700 taxpaying households in Montana fall into those categories.

It also would tax medical devices and limit tax-free medical “flex” spending accounts to $2,500.

Senate bill: It has a controversial 40 percent tax on so-called “Cadillac” health plans; levies an annual fee on insurers, drug makers and medical device makers; and raises Medicare payroll taxes for singles earning more than $200,000 a year and couples earning more than $250,000.

It also limits flex spending accounts and medical-expense tax deductions.

U.S. Sen. Max Baucus, D-Mont., a chief architect of the Senate bill, opposes the income tax surcharge in the House bill and says the Senate bill “pays for health care reform with health-care dollars.”

He also argues that for many low- and middle-income families, the bill will end up cutting their costs, because it will provide subsidies to help them buy health insurance (starting in 2014).

Critics of the Senate approach – particularly the excise tax on health coverage – say its package of taxes clearly will hit middle-class workers who have decent health benefits, but may not see much in direct benefits from the reforms.

“I think Montana public employees are going to be hammered hard by that excise tax,” says Eric Feaver, president of MEA-MFT, the state’s largest labor union, which represents 18,000 teachers and other workers. “We are just amazed at how, to this point, we’ve been unable to convince Senator Baucus of that fact.”

The excise tax would be levied on the “aggregate value” of health care benefits that exceed $8,500 for single people and $23,000 for families, starting in 2013.

The aggregate value is what you and your employer, combined, pay for your medical, dental and vision policies, plus any spending from your medical flex spending account. For most workers, that amount easily stretches into the thousands of dollars per year.

Feaver doubts family policies will be affected much in Montana, but says the aggregate value of policies for many single people covered by company plans could easily exceed the $8,500 threshold by 2013.

To avoid the 40 percent tax, workers and their employers would buy less coverage, resulting in more medical costs for the employees, Feaver says.

Supporters of the tax, including Baucus, argue that the money saved by buying cheaper coverage would be converted to higher wages for workers.

Feaver’s response: “I just flat don’t buy it. … There will be a significant tax on insurance and my members are going to be paying it. And I consider them to be middle class.”

Another target of criticism in the Senate bill is its fees on health insurers and other health-related industries. These fees, such as $6.7 billion annual charge on insurers nationwide, would take effect for 2009, if the bill passes.

Blue Cross & Blue Shield of Montana, the state’s dominant health insurer, says its share of the fee would be $8 million to $12 million a year. It estimates that this tax and others on drug makers and medical device manufacturers would increase the cost of a policy for a family of four by at least $350 a year.

New West Health Services, the second-largest private health insurer, says it would pay about $1.1 million a year.

“We really have no choice but to pass these additional costs on to the insurance-buying consumer,” says Tanya Ask, vice president of external and provider services for New West.

Baucus argues that once wider insurance reform efforts begin in 2013, there will be more competition in health insurance markets, making it harder to pass these costs on to consumers.

Employees with access to medical flex spending accounts also could see some tax increases, when the accounts are limited to $2,500.

For example, 9,400 state and university system workers put

$10.5 million into these accounts this year, saving themselves a few million dollars in taxes. State workers can put up to $5,000 in the accounts; university workers up to $6,000.

Imposing the new, lower ceiling would mean higher income and payroll taxes for those who now exceed $2,500.

Supporters of the lower threshold argue that flex accounts benefit only some workers, and that most don’t put more than $2,500 into an account. Still, the change would be a tax increase levied on mostly middle-class workers.

While no one is enthusiastic about paying higher taxes, two prominent supporters of the health reform bills – AARP and Montana Change That Works, a labor-funded organization – say they can live with the taxes in the Senate bill.

“AARP believes that some investment is necessary to improve our health-care system,” says Stacia Dahl, spokeswoman for AARP-Montana. “We believe shared responsibility – individuals, employers and the government – all must contribute to the cost of improving our health care system.”

John Firehammer, spokesman for Montana Change That Works, says the bill’s combination of tax credits for small businesses, subsidies for some families and a reduction in “cost-shifting” of health costs will end up lowering overall costs for most.

“And reform will cut the (federal) deficit,” he added. “Put that together, and reform will have a strong effect in cutting, not raising, the net tax load.”

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