House Healthcare Bill Contains Insurance Changes, Mandates, Public Option

The House of Representatives on Nov. 7, by a 220-215 vote, passed a bill to overhaul the healthcare system. Any differences between the Senate and House bills will have to be reconciled. The main provisions of the House bill are:

INSURANCE MARKET CHANGES

• Creates an insurance market exchange where individuals and small businesses would purchase coverage
• Creates a new government health insurance plan that would be sold through the exchange
• Provides for the creation of nonprofit healthcare cooperatives to sell coverage through the exchange
• Bars insurers from excluding for pre-existing conditions and from charging more for medical history
• Creates a temporary national high-risk pool program to provide medical coverage to the uninsured, including those with pre-existing conditions denied coverage. The program would operate until the exchange becomes available
• Permits young people to remain on their parents’ health insurance policy up to the age of 27
• Eliminates lifetime limits on coverage
• Provides for states to enter compacts to allow for the sale of insurance across state lines

COVERAGE MANDATES AND PENALTIES

• Individuals are required to obtain coverage. Those who do not would face a 2.5 percent tax
• Most employers are required to provide coverage to their workers and pay for at least 72.5 percent of the premium for individual full-time workers, 65 percent for family coverage
• Exempst firms with up to $500,000 in payroll
• Firms with annual payrolls between $500,000 and $750,000 that do not provide coverage would pay fees on a sliding scale of 2 percent, 4 percent and 6 percent of wages; firms with payrolls of $750,000 and above would pay 8 percent
• Tax credits to help small firms afford coverage

FINANCING

• A surtax of 5.4 percent on individuals earning more than $500,000 a year and couples making more than $1 million
• A 2.5 percent excise tax on medical devices
• Raises $6.1 billion over 10 years by repealing rules liberalizing the way multinational companies allocate interest expenses
• Limits tax breaks for foreign multinational companies incorporated in offshore tax havens