US House approves sweeping healthcare overhaul

Donna Smith,Reuters
Monday 22 March 2010 08:01 GMT

The US House of Representatives gave final approval to a sweeping healthcare overhaul today, expanding insurance coverage to nearly all Americans and handing President Barack Obama a landmark victory.

On a late-night 219-212 vote, House Democrats approved the most dramatic health policy changes in four decades. The vote sends the bill, already passed by the Senate, to Obama to sign into law.

The overhaul will extend health coverage to 32 million Americans, expand the government health plan for the poor, impose new taxes on the wealthy and bar insurance practices such as refusing to cover people with pre-existing medical conditions.

The vote capped a year-long political battle with Republicans that consumed the US Congress and dented Obama's approval ratings, and fulfilled a goal that had eluded many presidents for a century - most recently Democrat Bill Clinton in 1994.

"Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics," Obama said during a late-night appearance at the White House.

"This legislation will not fix everything that ails our healthcare system, but it moves us decisively in the right direction. This is what change looks like," he said.

House Democrats hugged and cheered in celebration as their vote count hit the magic number of 216, and chanted: "Yes we can." Every Republican opposed the bill, and 34 Democrats joined them in voting against it.

Republican and industry critics said the $940 billion bill was a heavy-handed intrusion in the healthcare sector that will drive up costs, increase the budget deficit and reduce patients' choices.

Both parties geared up for another battle over the healthcare bill in the campaign leading up to November's congressional elections, and opponents across the country promised to challenge the legislation on the state level.

The healthcare revamp, Obama's top domestic priority, would usher in the biggest changes in the $2.5 trillion US healthcare system since the 1965 creation of the government-run Medicare health program for the elderly and disabled.

It would require most Americans to have health coverage, give subsidies to help lower-income workers pay for coverage and create state-based exchanges where the uninsured can compare and shop for plans.

Major provisions such as the exchanges and subsidies would not kick in until 2014, but many of the insurance reforms like barring companies from dropping coverage for the sick will begin in the first year.

House Democrats also approved a package of changes to the Senate bill late on Sunday. The Senate will take up that package this week under budget reconciliation rules requiring a simple majority to pass.

The changes include elimination of a controversial Senate deal exempting Nebraska from paying for Medicaid expansion costs, the closure of a "doughnut hole" gap in prescription drug coverage and modifications to a tax on high-cost "Cadillac" insurance plans.

Republicans said they would challenge those changes in the Senate through parliamentary points of order and believed they could block its passage.

"Senate Republicans will now do everything in our power to replace the massive tax hikes, Medicare cuts and mandates with the reforms our constituents have been calling for throughout this debate," Senate Republican leader Mitch McConnell said.

The vote on the overhaul followed days of heavy lobbying of undecided House Democrats by Obama and House leaders. The narrow victory was clinched earlier on Sunday by a deal designed to appease a handful of Democratic opponents of abortion rights.

Under the deal, Obama will issue an executive order affirming government restrictions on the use of federal funds for abortion would not be changed by the healthcare bill.

That pledge won the support of Representative Bart Stupak and a handful of other House Democratic abortion rights opponents, who had threatened to vote against the Senate-passed bill because they said its abortion restrictions were not strong enough.

The health insurance industry has vigorously opposed the overhaul, but insurance stocks rallied late last week as investors began to realize their worst fears had not materialized.

Pharmaceutical companies, hospitals and others will benefit from more insured patients, and the bill does not allow the government to cap prices and premiums, which would have hurt drugmakers and insurers.

Opinion polls show the public also has a mixed view. While pluralities oppose the legislation and the process has turned off many Americans, some of the bill's individual components draw heavy support.

Hundreds of conservative "Tea Party" activists rallied next to the Capitol, waving yellow "Don't Tread on Me" flags and chanting "Kill the bill." Many entered the Capitol, wandering the hallways to buttonhole lawmakers and at one point disrupting House proceedings.

The bill's final approval represented a stunning turnaround from January, when it was considered dead after Democrats lost their crucial 60th Senate vote in a special Massachusetts Senate election.

But Obama and Democrats rallied last month for a final push, and will use the Senate's budget reconciliation rules to bypass the need for 60 votes on the changes they sought to the overhaul.

The U.S. House of Representatives on Sunday approved a sweeping overhaul of the $2.5 trillion U.S. healthcare system and forwarded some finishing touches to the Senate for consideration this week.

Here is what to expect if the Senate passes the House's changes and President Barack Obama signs the entire package into law.

Within the first year of enactment

* Insurance companies will be barred from dropping people from coverage when they get sick. Lifetime coverage limits will be eliminated and annual limits are to be restricted.

* Insurers will be barred from excluding children for coverage because of pre-existing conditions.

* Young adults will be able to stay on their parents' health plans until the age of 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.

* Uninsured adults with pre-existing conditions will be able to obtain health coverage through a new program that will expire once new insurance exchanges begin operating in 2014.

* A temporary reinsurance program is created to help companies maintain health coverage for early retirees between the ages of 55 and 64. This also expires in 2014.

* Medicare drug beneficiaries who fall into the "doughnut hole" coverage gap will get a $250 rebate. The bill eventually closes that gap which currently begins after $2,700 is spent on drugs. Coverage starts again after $6,154 is spent.

* A tax credit becomes available for some small businesses to help provide coverage for workers.

* A 10 percent tax on indoor tanning services that use ultraviolet lamps goes into effect on July 1.

What happens in 2011

* Medicare provides 10 percent bonus payments to primary care physicians and general surgeons.

* Medicare beneficiaries will be able to get a free annual wellness visit and personalized prevention plan service. New health plans will be required to cover preventive services with little or no cost to patients.

* A new program under the Medicaid plan for the poor goes into effect in October that allows states to offer home and community based care for the disabled that might otherwise require institutional care.

* Payments to insurers offering Medicare Advantage services are frozen at 2010 levels. These payments are to be gradually reduced to bring them more in line with traditional Medicare.

* Employers are required to disclose the value of health benefits on employees' W-2 IRS forms.

* An annual fee is imposed on pharmaceutical companies based on market share. The fee does not apply to companies with sales of $5 million or less.

What happens in 2012

* Physician payment reforms are implemented in Medicare to enhance primary care services and encourage doctors to form "accountable care organizations" to improve quality and efficiency of care.

* An incentive program is established in Medicare for acute care hospitals to improve quality outcomes.

* The Centers for Medicare and Medicaid Services, which oversees the government programs, begin tracking hospital readmission rates and puts in place financial incentives to reduce preventable readmissions.

What happens in 2013

* A national pilot program is established for Medicare on payment bundling to encourage doctors, hospitals and other care providers to better coordinate patient care.

* The threshold for claiming medical expenses on itemized tax returns is raised to 10 percent from 7.5 percent of income. The threshold remains at 7.5 percent for the elderly through 2016.

* The Medicare payroll tax is raised to 2.35 percent from 1.45 percent for individuals earning more than $200,000 and married couples with incomes over $250,000. The tax is imposed on some investment income at a rate of 3.8 percent for that income group.

* A 2.9 percent excise tax is imposed on the sale of medical devices. Anything generally purchased at the retail level by the public is excluded from the tax.

What happens in 2014

* State health insurance exchanges for small businesses and individuals open.

* Most people will be required to obtain health insurance coverage or pay a fine if they don't. Healthcare tax credits become available to help people with incomes up to 400 percent of poverty purchase coverage on the exchange.

* Health plans no longer can exclude people from coverage due to pre-existing conditions.

* Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees aren't counted for the fine.

* Health insurance companies begin paying a fee based on their market share.

What happens in 2015

* Medicare creates a physician payment program aimed at rewarding quality of care rather than volume of services.

What happens in 2018

* An excise tax on high cost employer-provided plans is imposed. The first $27,500 of a family plan and $10,200 for individual coverage is exempt from the tax. Higher levels are set for plans covering retirees and people in high risk professions.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in