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FACTBOX-Reconciling U.S. Senate, House healthcare bills

Jan 19 (Reuters) - Democrats in the U.S. Congress are moving closer to agreeing on a sweeping healthcare overhaul as they try to merge two bills passed by the Senate and House of Representatives into a single piece of legislation.

The final bill would have to be passed again by the Senate and House before it can be sent to President Barack Obama for his signature. However, if Republican Scott Brown wins an upset victory over Democrat Martha Coakley in Massachusetts on Tuesday, it could put the healthcare bill in jeopardy.

Republicans solidly oppose the legislation and a Brown win would give them the votes in the Senate to block legislation.

Here is a factbox on the differences between the two bills and where agreement has been reached.

INSURANCE MARKET REFORM

Both bills would bring insurance market reforms barring insurers from excluding people for pre-existing conditions and preventing them from arbitrarily dropping policy holders.

Both bills would create insurance exchanges in which small businesses and individuals can shop for coverage. The Senate bill would create state-based exchanges. The House bill would create a national exchange. House Democrats have said the final bill will likely include a national exchange.

Negotiators have agreed that the exchanges would be opened to collectively bargained health plans beginning in 2017.

The House bill would allow insurers to charge older people up to twice the amount they charge younger policy holders. The Senate bill would allow insurers to charge older people up to three times what they charge younger people.

Both bills would place limits on how much insurers can spend on administrative costs and profits.

PUBLIC OPTION

The House bill would create a new government health insurance plan to compete with private insurers. This “public option” would have to meet the same coverage requirements as private insurers. The Senate bill has no public option and the final bill is unlikely to include one. Instead it will likely include Senate provisions that direct the U.S. Office of Personnel Management to contract with private insurance companies to offer policies on the exchanges.

FINANCING

The House bill included a 5.4 percent surtax on individuals earning more than $500,000 a year and couples making more than $1 million. The final bill is unlikely to contain the surtax.

The Senate bill includes a 40 percent excise tax on high-cost health insurance plans. It also would raise payroll taxes for Medicare, the government health insurance plan for the elderly and disabled, to 2.35 percent from the current 1.45 percent for high-income people.

Negotiators agreed to raise the threshold for the tax to $24,000 for family plans and at $8,900 for individuals -- up from $23,000 for families and $8,500 for individuals in the Senate-passed plan.

Health plans negotiated by unions are exempt from the tax, which starts in 2013, until 2018.

ABORTION

Abortion language has yet to be settled. Both bills would bar the use of federal funds to pay for an abortion.

The House bill contains tougher language that would require anyone seeking coverage for elective abortions to buy separate insurance riders. The Senate bill would require anyone with abortion coverage to write two separate premium checks -- one for the abortion coverage and one for the rest.

MEDICAID COVERAGE

The Senate bill would make Medicaid, the government health insurance program for the poor, available to everyone with incomes up to 133 percent of the poverty level.

The House would expand the Medicaid program to everyone with incomes up to 150 percent of the poverty level. The poverty level in 2009 for an individual was $10,830 and for a family of four $22,050. Many states have eligibility requirements below that level.

MANDATES

Both bills would require most individuals to obtain health insurance and would impose penalties on those who do not. The House bill would impose a 2.5-percent penalty tax on income up to the average cost of an insurance policy. The Senate would phase in a $750-per-person annual penalty up to $2,250 per family or a penalty of 2 percent of taxable income, whichever is greater. The full penalty would take effect in 2016.

The House bill would require employers with payrolls above $750,000 to provide health insurance to workers. Those who do not provide insurance would face a penalty of 8 percent of payroll. Under the Senate bill large firms with more than 50 workers would have to pay a fine of $750 annually per worker if any employee obtains federally subsidized coverage.

Reporting by Donna Smith in Washington; Editing by Mary Milliken and Eric Walsh

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