Heritage Morning Bell - Healthcare

The Six Key Issues the House Must Cave On Before Obamacare Becomes Law

President Barack Obama attempted to downplay differences between the House and Senate bills telling American Urban Radio Networks yesterday: “The Senate and the House bills are 95 percent identical. There’s five percent differences, and one of those differences is the public option. This is an area that has just become symbolic of a lot of ideological fights. As a practical matter, this is not the most important aspect to this bill.” We’ll let President Obama fight with his base abut how important a strong public option is to health reform, but a government run plan is just one of six key differences between the House and Senate bills:

Soak the Rich or Tax Everybody:
The Senate bill relies heavily on a new excise tax on high cost health plans: a 40 percent tax on plan exceeding $8,500 for an individual and $23,000 for a family. The AFL-CIO and SEIU both call this a tax on working families. The Senate bill also includes a new premium tax on all insurers and the CBO confirms that the cost of this tax will be passed on to all Americans with private insurance. The House bill depends on a heavy new income tax targeted at top-earning taxpayers and small businesses. The 5.4 percent tax on individuals with incomes above $500,000, and on families with incomes above $1 million, is structured in a way that over time more and more Americans will be hit by this tax and small business owners would be particularly affected.

Employer Mandate Penalties:
The Senate bill imposes a $750 penalty per worker on employers of 50 or more who are not covered by the federally approved package of health benefits. The Senate mandate has other strange consequences. If an employer offers coverage, but an employee is eligible by virtue of income to qualify for taxpayer subsidies and entry into the state-based health insurance exchange, the employer is also penalized. In other words, employers are penalized for hiring people at the poverty level, even if they offer health insurance. The House bill imposes a direct requirement on employers to offer federally-qualified health care coverage to their employees or pay a payroll tax on a sliding scale up to 8 percent. Both the US Chamber of Commerce and the National Federation of Independent Businesses have come out against the bills.

Individual Mandate Penalties:
The Senate bill requires individuals to purchase a government approved plan or pay a $750 penalty, beginning in 2014. The tax penalty, indexed for inflation, would increase over time. The House bill requires individuals to pay a penalty of 2.5 percent of their income, depending on the size of their income, for not obtaining federally-approved health care coverage.

Weak or Strong Public Plan:
The Senate bill establishes a new set of “multi-state” private health plans sponsored by the U.S. Office of Personnel Management (OPM) — the agency that administers the federal civil service — that would compete against private health plans in the state based exchanges that are mandated by the provision of the Senate bill. In contrast, the House bill includes an explicit public plan.

Medicaid Expansion:
The left may complain that there is no government-run option in either bill, but both the House and Senate bill accomplish over half their additional health insurance coverage through Medicaid expansion. The Senate bill would require states to expand their Medicaid programs to cover all Americans up to 133 percent Federal Poverty Level. The House bill would require states to expand their Medicaid programs to 150 percent FPL, the same level suggested in earlier versions of the Senate HELP Committee bill. Both Democrat and Republican Governors are against this state budget-busting welfare expansion.

Taxpayer Funded Abortion:
The President promised that there would be no federal funding for abortion. In the House bill, by virtue of the Stupak-Pitts amendment, there is a genuine firewall between federal funding and abortion coverage. In the Senate bill, by virtue of the agreement between Senate Majority leader Harry Reid and Senator Ben Nelson (D-NE), there is no such firewall. For the “pro-life” forces on both sides of the aisle, the Nelson language appears to fall short of the House language.

These are all major policy differences that go to the core of the Obama health care plan. For each option, choosing one version over the other will have huge consequences for the American people. But since Sens. Joe Lieberman (I-CT) and Ben Nelson (D-NE) have threatened to veto the bill if any significant changes are made by the House in conference, it is most likely the Senate will prevail on every issue. Speaker Nancy Pelosi (D-CA) might even just save herself and the leftist majority in the House the embarrassment and pass the Senate bill as is.

After all, the Obama administration wants a bill, any bill, and doesn’t really care what is actually in it.