Senate Introduces Health Care Bill, Democrats Look For 60 Votes

On November 18, Senate Majority Leader Harry Reid (D-Nev.) finally released a health care reform bill, the Patient Protection and Affordable Care Act. The bill is the result of merging and modifying two Senate committee drafts, as well as adding new taxes. The Congressional Budget Office (CBO) cost estimate of the bill is $849 billion over the next ten years. The bill's initial cost is less than the House passed bill and President Obama's target of $900 billion. The bill is paid for by increasing Medicare taxes and taxing high cost health care plans. The bill would allow states to opt-out of a government run public health insurance plan, require Americans to have health coverage or pay a penalty, and require employers with 50 or more employees to pay a penalty for each employee who received government subsidies to purchase coverage through the exchange. The largest revenue raiser is the tax on high-cost health insurance plans. Plans with yearly premiums of $8,500 for individuals and $23,000  for families would be subjected to a 40 percent excise tax, which is higher than previous Senate drafts. The increased Medicare payroll taxes would raise $54 billion over the next decade by increasing the rate from 1.45 to 1.95 percent on individuals earning $200,000 a year and joint filers earning $250,000 a year. The individual mandate would begin in 2014 and start at $95 per year for each American without coverage and would rise to $750 each year in 2016.  The bill includes insurance reforms that would prohibit health insurance companies from canceling policies after an individual becomes sick. There would be no lifetime or annual limits on coverage. The plan would help Medicare recipients afford coverage and would assist in paying for prescription drugs. It is expected that the Senate will begin debate on Saturday by holding their first procedural vote on the bill where it must get 60 votes. If it passes as expected, the Senate would continue to debate the bill and begin voting on amendments after Thanksgiving, holding a final vote in December. Next, the bill will be conferenced with the House bill, which is expected to occur in January before the State of the Union Address. Many of the procedural votes and eventually the amendments and final passage will require 60 votes. Currently, Democratic holdouts appear to be Senators Ben Nelson (Neb.), Mary Landrieu (La.) and Blanche Lincoln (Ark).  It is expected that they will support the first set of procedural hurdles. AGC opposed the House bill because it included an employer mandate, created a public option that will compete with private insurance, mandated benefits for all employees, did not curtail either federal/state costs for Medicare and Medicaid nor reduced private insurance premiums, did not curtail medical malpractice costs and included a significant surtax on high income earners that will be particularly harsh on companies organized as subchapter S corporations.  AGC is currently analyzing the Senate's 2,000 page bill, its impact on the construction industry and how it could be altered to reduce costs and make coverage more affordable. For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org.