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David Espo / Associated Press, Published October 30 2009

Obama lauds House Dems’ health bill

WASHINGTON – Their work swiftly heralded by President Barack Obama, House Democrats rolled out landmark legislation Thursday to extend health care to tens of millions who lack coverage, impose sweeping new restrictions on private insurers and create a government-run insurance option for cost-conscious consumers.

The measure “covers 96 percent of all Americans, and it puts affordable coverage in reach for millions of uninsured and underinsured families, lowering health care costs for all of us,” boasted Speaker Nancy Pelosi, D-Calif., at a ceremony attended by dozens of Democratic lawmakers. She spoke on the steps of the Capitol, not far from where Obama issued his inaugural summons for Congress to act more than nine months ago.

Despite the fanfare, Democrats did not immediately release a detailed estimate of the legislation’s cost. Instead, they said the Congressional Budget Office had put the cost related to coverage at $894 billion over a decade, and they made no mention of other items in the measure.

The full House is expected to vote on the bill late next week, and Democratic leaders were careful not to claim they had yet rounded up enough votes to pass it. Still, the day’s events capped months of struggle and marked a major advance in their drive – and Obama’s – to accomplish an overhaul of the health care system that has eluded presidents for a half-century.

Across the Capitol, the Democratic-controlled Senate is expected to begin debate within two weeks on a bill crafted by Majority Leader Harry Reid, D-Nev. It, too, envisions a government-run insurance option, although states could opt out, unlike in the bill the House will vote on. That portion of the Senate version appears likely to be weakened even further, as moderates press for a standby system that would not go into effect until it was clear individual states were experiencing a lack of competition among private companies.

Obama called the House legislation “another critical milestone in the effort to reform our health care system.” The president added he was pleased with the decision to allow the government to sell insurance in competition with private industry, and said the measure meets his goals for deficit neutrality.

Republican reaction was as swift as it was negative. “It will raise the cost of Americans’ health insurance premiums; it will kill jobs with tax hikes and new mandates, and it will cut seniors’ Medicare benefits,” said the party’s leader in the House, Rep. John Boehner of Ohio. He carried a copy of the 1,990-page measure into a news conference to underscore his claim it represented a government takeover of the health care system.

Broad in scope, the House Democrats’ bill attempts to build on the current system of employer-provided health care. It would require big companies to cover their employees and would provide federal subsidies to help small companies provide insurance for theirs, as well. Most individuals would be required to carry insurance, and much of the money in the legislation is dedicated to subsidies for those at lower incomes to help them afford coverage.

For those at even lower incomes, the bill provides for an expansion of Medicaid, the state-federal health program for the poor. Adults up to 150 percent of poverty – individuals making up to $16,245 and a family of four up to $33,075 – would be covered, a provision estimated to add 15 million to Medicaid.

One of the bill’s major features is a new national insurance market, in which private companies could sell policies that meet federally mandated benefit levels, the government would offer competing coverage and consumers could shop for the policy that best met their needs.

In a bow to moderates, Democrats decided doctors, hospitals and other providers would be allowed to negotiate rates with the Department of Health and Human Services for services provided in the government insurance option.

Liberals had favored a system in which fees would be dictated by the government, an approach that would have been less costly than what was settled on, and also would have moved closer to a purely government-run health care system than some Democrats favor.

Thursday’s bill includes an array of new restrictions on the private insurance industry, in addition to forcing insurers to compete with the federal government for business.

Firms would be banned from denying coverage on the basis of pre-existing medical conditions and limited in their ability to charge higher premiums on the basis of age.

They would be required to spend 85 percent of their income from premiums on coverage, effectively limiting their ability to advertise or pay bonuses. Additionally, the industry would be stripped of immunity from antitrust regulations covering price fixing, bid rigging and market allocation. And in a late addition to the bill, 30-year-old restrictions on the Federal Trade Commission’s ability to look into the insurance industry would be erased.

Looking ahead on the health care debate

The next steps for health care legislation:

In the House: The Democratic leadership presented legislation Thursday after months of negotiations on merging three bills approved earlier this year by separate committees. The Congressional Budget Office will prepare an analysis of the cost, and Democratic leaders have the right to prepare an amendment relating to abortion and other issues. A vote in the full House could be held by the end of next week, with a simple majority required for passage. Democrats have not said whether they will allow Republicans to present an alternative on the House floor.

In the Senate: Majority Leader Harry Reid, D-Nev., says he will begin debate on health care legislation once he receives cost estimates from the Congressional Budget Office. Republicans have threatened to filibuster the effort, and if they do, it will take 60 votes to overcome their opposition. Full debate could take weeks.

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