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Key Provisions of the House Health Care Bill

"Affordable Health Care for America Act" Will Slightly Reduce Federal Deficit

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Key Provisions of the House Health Care Bill

Photo: David McNew/Getty Images

David McNew/Getty Images
This article summarizes key provisions in the House health care bill, "Affordable Health Care for America Act," H.R. 3962, which was passed on November 7, 2009 in a historic 220 to 215 vote.

The bill was first introduced on July 15, 2009. After six months of negotiations, Speaker Pelosi reintroduced a trimmed-down version on October 30, 2009.

The Democratic drive in 2009 to reform U.S. healthcare insurance began with the 2008 presidential campaign, and with the election of President Barack Obama who vowed to "make available a new national health plan to all Americans, including the self-employed and small businesses, to buy affordable health coverage that is similar to the plan available to members of Congress."

See White House Statement of Support for House Health Care Bill, issued on November 6, 2009, in which the President stated that "This bill provides the necessary health reforms that the Administration seeks – affordable, quality care within reach for the tens of millions of Americans who do not have it today, and stability and security for the hundreds of millions who do."

Revised Version of "Affordable Health Care for America Act" - November 2009

The post-negotiations version of the House health care bill incorporates changes made to cut costs, and to reflect changes necessary to draw votes from pro-business Blue Dog Democrats. Among the most significant changes are:

  • Increasing the annual income threshold for a new surtax to partially finance health care reform to $1 million for couples and $500,000 for individuals. The previous threshold was $280,000 for individuals and $350,000 for couples.

  • Increasing the threshold requirement for small businesses to provide health care coverage for employees. The new qualifying threshold exempts all businesses with payrolls under $500,000 annually. The previous threshold exempted only businesses with annual sales under $250,000.

  • Under the government "public option" plan, doctors, hospitals and other medical professionals will be reimbursed at individually or regionally negotiated rates. Previously, doctors were to be reimbursed at Medicare rates, and hospitals at Medicare rates plus five percent.

  • Drug prices for Medicare recipients would be negotiated by the Health & Human Services Secretary, a provision hotly contested by the pharmaceutical industry. Previously, the Bush administration set non-negotiable drug prices for Medicare, prices most experts derided as very high.
Under the revised House health care bill, 36 million uninsured Americans would obtain health care coverage, although the Congressional Budget Office estimates that 18 million would remain uninsured in 2019, including about six million illegal immigrants.

In total, 96 percent of the U.S. eligible population will have health insurance coverage.

The revised House health care refom bill would "slightly reduce federal budget deficits" per the Congressional Budget Office. The revised bill is endorsed by AARP, representing senior citizens, and the AMA, representing doctors.

Also in the revised House bill, private insurers:

  • are required to accept all applicants,
  • may not charge higher premiums because a person becomes ill,
  • prohibits the use of pre-existing conditions to limit or disallow coverage, and
  • children may remain on parents'insuraance through age 26.

Original Version of "America's Affordable Health Choices Act" - July 2009

Four levels of Medicare-like healthcare plans will be offered to all American citizens and legal residents, without regard to pre-existing medical conditions: basic, enhanced, premium and premium-plus.

The basic government healthcare plan must provide benefits comparable to those offered by most employer-based plans in that region. The four government plan levels are differentiated by healthcare services covered, and costs to participants.

Americans may opt to keep their present healthcare insurance, or may opt to instead join a government "public option" plan.

As the new Medicare-like government plans are initially implemented, Americans without healthcare insurance coverage and those purchasing their own coverage will be given highest priority to be enrolled first.

Mandatory Insurance with Cost Subsidies
As is the case for car insurance in most states, All Americans will be required to obtain some form of healthcare insurance coverage.

Economists and analysts anticipate that the cost of employer-sponsored insurance will be lowered when the insurers are forced to compete with government "public option" plans.

Subsidies to help pay for the costs of government plans will be given on a sliding scale to individuals and families with annual incomes between 133% to 400% of poverty level. Those earning less than 133% are eligible for Medicaid coverage.

Doctors and Hospitals
Under the government "public option" plan, doctors and other medical professionals will be reimbursed at the same rates used for Medicare reimbursements. Hospitals will be reimbursed at Medicare rates plus 5%.

It's widely expected that all doctors and hospitals that currently provide Medicare services will also opt to provide "public option" healthcare plan services.

Corporations and Small Businesses
Except for certain small businesses, all companies with employees will be required to either provide a minimum of healthcare insurance coverage to employees, or pay a fee equal to 8% of payroll expenses.

Businesses with annual sales under $250,000 are exempt. Those with sales under $400,000 would be liable for a reduced fee.

Paying for Government "Public Option" Plans
The goal for the Obama administration and Democratic leadership in Congress is for government "public option" healthcare to be budget-neutral, which means new government funds will be found (new reveues or cost-cutting measures) to pay for the new Medicare-like services.

The House Democrats' "America's Affordable Health Choices Act" legislation plans to pay for these new initiatives through the following:

  • The 8% fee charged to all companies not providing healthcare benefits to employees.
  • New income taxes on individual households earning $280,000 annually or more.
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