House Democrats pass health-care bill

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House Democrats pass health-care bill</font size>
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One Republican votes for plan
Senate will act next on legislation</font size></center>



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Pictured from left to right, House Majority Whip Rep.
James E. Clyburn (D-S.C.); Chris Van Hollen of Kens-
ington (D-Md.); Speaker of the House Nancy Pelosi
(D-Calif.); House Majority Leader Rep. Steny H. Hoyer
(D-Md.); and Rep. John B. Larson (D-Conn.), hold a
press conference following a meeting attended by
President Barack Obama on Capitol Hill. (Nikki Kahn -
The Washington Post)



Washington Post
By Lori Montgomery
and Shailagh Murray
Washington Post Staff Writers
Sunday, November 8, 2009



Hours after President Obama exhorted Democratic lawmakers to "answer the call of history," the House hit an unprecedented milestone on the path to health-care reform, approving a trillion-dollar package late Saturday that seeks to overhaul private insurance practices and guarantee comprehensive and affordable coverage to almost every American.

After months of acrimonious partisanship, Democrats closed ranks on a 220-215 vote that included 39 defections, mostly from the party's conservative ranks. But the bill attracted a surprise Republican convert: Rep. Anh "Joseph" Cao of Louisiana, who represents the Democratic-leaning district of New Orleans and had been the target of a last-minute White House lobbying campaign. GOP House leaders had predicted their members would unanimously oppose the bill.

Democrats have sought for decades to provide universal health care, but not since the 1965 passage of Medicare and Medicaid has a chamber of Congress approved such a vast expansion of coverage. Action now shifts to the Senate, which could spend the rest of the year debating its version of the health-care overhaul. Majority Leader Harry M. Reid (D-Nev.) hopes to bring a measure to the floor before Thanksgiving, but legislation may not reach Obama's desk before the new year.

At the Capitol, Obama urged the few Democrats who were still wavering on Saturday afternoon to put aside their political fears and embrace the bill's ambitious objectives. "Opportunities like this come around maybe once in a generation," he said afterward. "This is our moment to live up to the trust that the American people have placed in us. Even when it's hard. Especially when it's hard. This is our moment to deliver."

The House legislation would for the first time require every individual to obtain insurance, and would require all but the smallest employers to provide coverage to their workers. It would vastly expand Medicaid and create a new marketplace where people could obtain federal subsidies to buy insurance from private companies or from a new government-run insurance plan.

Though some people would receive no benefits -- including about 6 million illegal immigrants, according to congressional estimates -- the bill would virtually close the coverage gap for people who do not have access to health-care coverage through their jobs.

"For generations, the American people have called for affordable, quality health care for their families," House Speaker Nancy Pelosi (D-Calif.) said before the vote. "Today, the call will be answered."

The debate on the House floor extended for about 12 hours and settled into a civil, if predictable, pattern, after a heated start.

Republicans had blasted the 1,990-page bill as an ominous blueprint for a budget-busting government takeover of the private health-care system that would impose unprecedented mandates on individuals and employers, raise an array of taxes and slash projected spending on Medicare, the federal health program for the elderly. At a time of record budget deficits, Republicans argued that the country could ill-afford a new entitlement program that would cost an estimated $1.05 trillion over the next decade.

"Big government doesn't mean better health care," said Rep. Kevin Brady (R-Tex.). "This is not the reform families need. This is all about taking a giant first step toward a single-payer national health-care system. Washington will ultimately decide what doctors you can see, what treatments you deserve . . . and, when you're sick, will you be worth their cost?"

Throughout the debate, Republican after Republican warned that the legislation would rob Americans of their right to make choices about their health care, cost the nation jobs and unfairly financially burden future generations.

Pelosi needed to corral at least 218 of 258 Democrats to push the bill across the finish line. That task appeared to grow easier after party leaders broke a weeks-long impasse over abortion by agreeing to hold a vote on an amendment -- offered by antiabortion Democrats -- that would explicitly bar the public plan from` covering the procedure. The amendment, approved 240 to 194, with 64 Democrats in favor, also would prohibit people who received insurance subsidies from purchasing private plans that covered abortion.

http://www.washingtonpost.com/wp-dy.../11/07/AR2009110701504.html?wpisrc=newsletter
 
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The House bill</font size>


The complex package would affect virtually every American and fundamentally alter vast swaths of the health insurance industry. Starting next year private insurerscould no longer:

  • deny anyone coverage based on preexisting conditions, or

  • place lifetime limits on coverage or abandon people when they become ill.

Premium Increase Disclosure. Insurers would be required to disclose and justify proposed premium increases to regulators, and could not remove adult children younger than 27 from their parents' family policies.

For the elderly, the group that has been most skeptical of Obama's initiative, the House package would immediately offer discounts on prescription drugs and reduce a gap in Medicare prescription drug coverage, closing it entirely by 2019.

Uninsured people who cannot get coverage could join temporary high-risk insurance pools, and unemployed workers would be permitted to keep their COBRA benefits until the public plan and insurance exchanges started in 2013.


In four years, the measure would establish a new insurance system. Businesses with payrolls exceeding $500,000 would be required to offer their workers insurance or pay a fine of as much as 8 percent of payroll. Individuals would be required to obtain insurance or pay a fine of as much as 2.5 percent of income. States would be required to extend Medicaid coverage to as many as 15 million additional people. Low- and middle-income individuals who still could not afford coverage could apply for federal subsidies through an insurance marketplace that would negotiate with private insurers to provide comprehensive policies alongside a government-run "public option."

Congressional budget analysts say the package would cover an additional 36 million Americans, leaving 18 million people without insurance by 2019, about a third of them illegal immigrants. To avoid increasing the deficit, Democrats would pay for the coverage expansion by slicing more than $400 billion from Medicare over the next decade, and by imposing a variety of new taxes, primarily a 5.4 percent surcharge on annual income over $500,000 for individuals and $1 million for families. Initially, the tax would hit only 0.3 percent of taxpayers, but that number would climb rapidly, because the income thresholds would not be indexed to inflation.


<font size="4">The Senate bill</font size>


Attention will now shift back to the Senate. If the Senate acts, negotiations to iron out differences between the two chambers could be wrenching. Among the toughest issues:
  • whether the public option should include an "opt out" clause for states, as Reid has proposed;

  • whether to require employers to provide coverage to their workers or take the less punitive approach preferred by Senate moderates; and

  • whether to tax the rich or tax high-cost health-care policies, as the Senate proposed -- a provision economists call the most important provisions in either bill for reining in costs.

In his lunchtime speech to House Democrats, Obama did not touch on any of those issues. But he acknowledged the anxiety felt by lawmakers who watched independent voters abandon Democratic candidates in Virginia and New Jersey in Tuesday's elections, and he warned that voting down the most significant legislation of his young presidency would only complicate the party's political future.

"If you think the Republicans are not going to go after you if you vote no," the president said, according to several people present, "think again."



http://www.washingtonpost.com/wp-dy..._2.html?wpisrc=newsletter&sid=ST2009110702181
 
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What happens next?


The remaining hurdles lawmakers must overcome
before delivering a health-care bill to President
Obama's desk:
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According to Congressman Dennis Kucinich (D-OH), the Democrats' health reform legislation is basically a sham.

Appearing on MSNBC's The Ed Show on Friday night, the House's most unabashed progressive condemned Democratic leadership for removing his amendment that would allow states to create their own single-payer systems. Then he called the entire legislative package "a bailout for insurance companies."

Under a single-payer system, like those in Canada and the United Kingdom, the government pools taxpayer funds to pay for citizens' health care and fees are not collected by health care providers. The Kucinich amendment would allow individual states an opt-in to such a system.

The amendment is missing from health reform legislation unveiled Thursday by Democratic leadership.

"Representative Kucinich was livid when he found out that his provision to allow states to create a single payer system was stripped," News Junkie Post noted. "Kucinich’s amendment passed the House Labor and Education Committee in July. 'No one gave me any rational reason,' Kucinich said. 'I can only assume the insurance company interests brought pressure to take it out. Otherwise I would have heard from someone.'"

http://rawstory.com/2009/10/kucinich-health-reform-legislation-a-bailout-insurance-companies/
This bill is ass. I'm with Kucinich on this one.
 
Greg Mankiw and Homework on Marginal Tax Rates

Greg Mankiw and Homework on Marginal Tax Rates
Sunday, November 1, 2009

In an op-ed in today's New York Times Harvard's Greg Mankiw gives a good example of how government transfer programs increase marginal tax rates. He uses the same example assigned to Stanford's introductory students in their homework last week--the Senate Finance Committee's health care plan. Both Mankiw's op-ed and the homework consider the marginal tax rate increase implicit in the plan. Students in introductory economics courses around the country are hearing a lot about the health care debate, which is what makes Greg's column a good reading assignment.

Mankiw considers a family whose income rises from $54,000 to $66,000 and who loses $2,800 in government-provided health care benefits by earning $12,000 more income. The marginal tax rate is the lost benefit divided by the increase in income, which is a high 23 percent (2800 divided by 12000). The high marginal tax rate is a disincentive to work more.

The homework example has an even higher marginal tax rate and a larger disincentive. It consides a poorer familiy whose income rises from $24,000 to $48,000 and thus loses $7,300 in government-provided health care benefits according to the Senate plan. The marginal tax rate is 30 percent (7400 divided by 24000).

So the increase in marginal tax rates in the Senate plan is higher for poorer families.

http://johnbtaylorsblog.blogspot.com/2009/11/greg-mankiw-and-homework-on-marginal.html
 
Disincentives from Reform: House Edition

Disincentives from Reform: House Edition
MONDAY, NOVEMBER 02, 2009

In my Sunday Times column, I discussed the marginal tax rates implicit in the Senate Finance Committee version of the health reform bill. CBO has just released some numbers on the version of health reform being considered in the House of Representatives.

The bottom line: The implicit marginal tax rates are even higher in the House bill.

If you are interested in a more specific comparison, here is what I wrote about the Senate Finance bill on Sunday, with the new numbers for the House bill added in brackets:

A family of four with an income, say, of $54,000 would pay $9,900 [$6,200] for healthcare. That covers only about half [a third] the actual cost. Uncle Sam would pick up the rest.

Now suppose that the same family earns an additional $12,000 by, for example, having the primary earner work overtime or sending a secondary worker into the labor force. In that case, the federal subsidy shrinks, so the family’s cost of health care rises to $12,700 [$10,000].

In other words, $2,800 [$3,800] of the $12,000 of extra income, or 23 [32] percent, would be effectively taxed away by the government’s new health care system.​

And remember: This implicit marginal tax hike of 32 percent is added on top of the explicit marginal tax rate the family already faces from income and payroll taxes.

http://gregmankiw.blogspot.com/2009/11/disincentives-from-health-reform-house.html
 
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