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The Home Stretch: Merging the House and Senate Bills

pelosi and reid

We’ve followed the health reform bill in its journey from just a twinkle in Obama’s eye, through three committees in the House, two committees in the Senate, its passage by the House back in September, and its recent passage in the Senate.  The health reform bill is now making its way through the final stage of the process- merging the House and Senate bills into a final bill for President Obama to sign.  The bills have the same basic structure but there are still some major differences between the two.  Here are some of the biggest issues that still need to be worked out:

The Public Option
House version: Contains a weak public option.
Senate version: Thanks to Senators Joe Lieberman and Ben Nelson- no public option.

Despite poll results showing that 60% of Americans still support a public option (and a note to any Democrats in Congress who might be reading this post– 57% of independent voters support it), it’s likely that the Senate’s version will win out.   Influential liberal democrats in the House, like James Clyburn of South Carolina, have said that they could support a bill without a public option if there’s another mechanism to control costs and create more choice for consumers.  The Senate version contains an almost public option- at least one national nonprofit plan overseen by the Office of Personnel Management.  If that provision is strong enough, it might be enough to win over Congressmen like Clyburn.

Meanwhile, some are still fighting for a public option. Supporters have pointed out that a few months ago more than 60 progressive House democrats signed a letter stating that any bill that did not provide a public option was “unacceptable.”  When the Senate passed its bill, Minnesota Representative Keith Ellison tweeted, “Don’t quit on PO.  Still very possible if we get loud now.”  Louise Slaughter, chair of the influential House Rules Committee, wrote an op-ed declaring that the Senate version without a public option is too weak and that the Senate should go back to the drawing board.

Right now the public option looks dead, but remember it’s been counted out before.

Abortion Language
House version: Contains the Stupak Amendment, which states that if you receive any federal subsidies for insurance your plan may not cover abortion.
Senate version: Slightly less restrictive- it lets health plans cover abortion, but every enrollee has to write a separate check for the part of the premium that covers it.  Such a check would have to be written separately whether the share of the premium allocated for abortion care is 25 cents, $1.00, or $3.00 of the total premium on a monthly, semi-annual or annual basis.

The Senate’s version will likely be the one in the final bill.  Or as Paul Waldman of the American Prospect put it, “The Senate’s incredibly restrictive language on abortion will probably win out over the appallingly restrictive House version.”

Funding
House version: Paid for with a 5.4% tax on incomes over $500,000 ($1 million for couples).
Senate version: Paid for with a 40% excise tax on plans with premiums over $8,500 for individuals ($23,000 for families)– the so-called “Cadillac plans.”

This is a huge difference between the two bills that doesn’t get much airtime.  In theory the excise tax is a good idea because, according to MIT economist Jonathan Gruber:

It would reduce the incentives for employers to provide excessively generous insurance, leading to more cost-conscious use of health care and, ultimately, lower spending. In other words, it “bends the curve.”

However, there’s a concern, particularly among unions, that the tax will affect many in the middle class– as many as 25% of plans by some estimates would qualify for the tax, at least partially.  But remember, only the amount in premiums over $8500 for individuals/$23,000 for families would be taxed.

It’s unclear how this will play out in the Senate-House conference negotiations.  They may split the difference and use versions of both taxes.

Insurance Exchange(s)
House version: One national exchange
Senate Version: 50 state-based exchanges

This is totally up in the air, although one national exchange would be preferred, without a doubt.  As Paul Waldman at the American Prospect writes:

A national exchange is unquestionably better: It will offer greater efficiency, consistency, and choice. Improvements, like opening up the exchanges to midsize businesses, could be made more easily under the House version. A national plan would also give residents of stingier states with limited social-service benefits — read, Republican ones — access to the same quality of coverage as everyone else. If the conference chooses a national exchange, progressives should count it as an important victory.

Affordability
House version: Better subsidies for low income Americans, Medicaid eligibility for more people
Senate version: Better subsidies for middle class

The House version contains more money for subsidies, and in their version the subsidies tend to favor people with lower incomes.  For those who have higher incomes, but still qualify for subsidies, the Senate bill is a slightly better deal.

For example, after subsidies the annual premiums for a family of four making $34,000 would be:

  • Under the Senate bill: $1597
  • Under the House bill: $1091

However, for a family of four making $70,000 per year

  • Under the Senate bill: $6860
  • Under the House bill: $7244

Also, the House version expands Medicaid to those earning up to 150% of the federal poverty level ($33,075 for a family of four), covering 15 million people.  The Senate version expands Medicaid to only 133% of the federal poverty level ($29,326 for a family of four), opening it up to only 12 million people.

Other provisions
For a good overview of some of the other differences between the two bills, definitely check out this New York Times editorial and this list of Ten Things to Watch in the Health-Care Reform Conference by the American Prospect. And if you really want to follow along, House and Senate negotiators have drawn up this 11-page chart explaining all the major differences between the two versions.

{ 2 comments… add one }
  • Julia January 7, 2010, 2:51 pm

    this is really a helpful post- i was not aware of the differences between the senate and house versions when it came to the health exchanges for example. also- what about making it illegal to deny people coverage for pre-existing conditions? is that included in both versions?

  • Rob January 7, 2010, 3:37 pm

    Thanks Julia–
    Both versions do contain the same rules that would make it illegal to deny people coverage for pre-existing conditions. Also, insurance companies aren’t allowed to make people with pre-existing conditions pay higher premiums in either version.

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