House takes another step on healthcare reform

WASHINGTON Thu Oct 29, 2009 7:01pm EDT

Speaker of the House Nancy Pelosi unveils the House Democrat's Healthcare plan on Capitol Hill in Washington October 29, 2009. REUTERS/Joshua Roberts

Speaker of the House Nancy Pelosi unveils the House Democrat's Healthcare plan on Capitol Hill in Washington October 29, 2009.

Credit: Reuters/Joshua Roberts

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WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives unveiled a sweeping healthcare overhaul on Thursday that would transform the insurance market, create a government-run insurance plan and levy new taxes on the rich.

Weeks of closed-door negotiations to merge three House healthcare plans produced a 1,990-page bill that would cost a net $894 billion over 10 years -- just below President Barack Obama's target of $900 billion -- and reduce the deficit by $104 billion over the same period, budget analysts estimated.

"Today we are about to deliver on the promise of making affordable, quality health care available for all Americans," House Speaker Nancy Pelosi said in a ceremony on the steps of the U.S. Capitol.

The bill's release was another step forward in Obama's drive for healthcare reform that would rein in costs, reform the insurance industry and expand coverage to many of the 46 million uninsured living in the United States.

Obama has made an overhaul of the $2.5 trillion industry, which constitutes one-sixth of the economy, his top domestic priority.

The bill was met with unanimous opposition from Republicans and grumbling from some Democrats. Party liberals had sought a stronger public insurance option and party moderates want assurances that federal funds will not be used to pay for abortions under the measure.

The legislation could be debated in the House as soon as next week. The Senate is putting together its own version, and the House and Senate bills eventually must be combined before being sent to Obama for his signature.

Obama praised House Democratic leaders for the insurance industry reforms and said he was pleased the bill featured a public insurance option and was fiscally responsible.

"The House bill clearly meets two of the fundamental criteria I have set out: it is fully paid for and will reduce the deficit in the long term," he said in a statement.

Republicans have battled Obama and Democrats at every juncture in the healthcare debate, and they criticized the size, cost and scope of the House legislation.

'BEHIND CLOSED DOORS'

"Americans' health care is too important and too complex to risk on one gigantic bill that has been written behind closed doors," said Representative Dave Camp, the senior Republican on the House Ways and Means Committee.

House Republican leader John Boehner urged Democrats to slow down the process and allow a full floor debate. "This huge bill is designed to be so complex that nobody would ever know for sure what's in it," he said.

The House bill would expand coverage to 36 million uninsured people living in the United States, the Congressional Budget Office said. It would offer subsidies to help the uninsured purchase insurance through newly created exchanges.

It would require individuals to buy insurance and all but the smallest employers to offer health coverage to workers. It also would bar insurers from refusing to cover people with pre-existing medical conditions and eliminate the industry's exemption from federal antitrust laws.

The House proposal includes a 5.4 percent surtax on individuals making more than $500,000 and couples earning more than $1 million, which would bring in an estimated $460 billion over 10 years to help pay for covering the uninsured.

It also would save money by expanding eligibility for the government's Medicaid health insurance program for the poor to people with incomes up to 150 percent of the official poverty level. Covering people through Medicaid is cheaper for the government than providing subsidies to purchase insurance.

The nonpartisan Congressional Budget Office said the subsidies for health insurance coverage would cost $1.055 trillion over 10 years, to be offset in part by $167 billion in penalties paid by individuals and employers who fail to obtain insurance.

The proposed new government-run insurance program has been a flashpoint in the debate. Obama and liberals see it as a way to increase competition with private insurers, but critics say it would lead to a government takeover.

In the House bill, the public option would use reimbursement rates negotiated with doctors and hospitals. House liberals led by Pelosi could not muster the votes for a stronger version pegged to rates for Medicare, the government's health insurance program.

The healthcare measure being prepared for debate in the Senate also includes a public option based on negotiated reimbursement rates but, unlike the House bill, it would allow states to decline to participate.

The House bill does not include the Senate's proposal to tax high-cost "Cadillac" insurance plans, which has been opposed by House Democrats and labor unions who fear it will hurt too many middle-income workers.

The lobbying group for the insurance industry, America's Health Insurance Plans, criticized the proposed government-run insurance program, arguing it would cause people to lose their existing coverage.

"A new government-run plan would bankrupt hospitals, dismantle employer coverage ... and ultimately increase the federal deficit," Karen Ignagni, the group's president, said in a statement.

(Editing by Chris Wilson)

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