PRESIDENT BARACK Obama hailed as a “critical milestone” draft healthcare legislation unveiled by the Democratic Speaker of the House, Nancy Pelosi, yesterday.
“Today we are about to deliver on the promise of making affordable, quality healthcare available for all Americans,” Ms Pelosi said. “We are putting forth a Bill that reflects our best values and addresses our greatest challenges.”
The House Bill contains a watered-down version of the “robust” public option that was favoured by Ms Pelosi and other liberal Democrats. They wanted the government to base reimbursement of doctor and hospital fees on the lower Medicare (government insurance for the elderly) fee schedule.
But conservative Democrats feared that the measure would drive rural hospitals out of business.
When she realised she would not have the 218 votes needed to pass legislation, Ms Pelosi compromised, saying the government insurance plan would negotiate fees with providers, just as private insurance companies do.
Debate on the House Bill will begin next week, and Ms Pelosi hopes a vote will be taken by November 11th.
The plan unveiled yesterday does not address two contentious issues: the circumstances in which federal monies can be used to fund abortion, and the exclusion of illegal immigrants from government healthcare.
At a time when the $1.4 trillion US budget deficit is the highest since the second World War, Mr Obama says healthcare reform must be deficit-neutral. In other words, he intends to extend medical insurance to tens of millions more Americans without increasing the debt.
A previous version of the House Bill was expected to cost $1.04 trillion over 10 years. With the help of the Congressional Budget Office, that has been whittled down to $894 billion.
The biggest savings were achieved by raising the ceiling for Medicaid – government insurance for the poor – from income that is 133 per cent of poverty level to 150 per cent of poverty level, or $33,075 for a family of four.
The CBO found Medicaid was cheaper than subsidising insurance payments for less affluent families.
New taxes will also be raised to fund healthcare. A so-called “millionaire’s tax” will be levied on couples earning over $1 million, or individuals with more than $500,000 in annual income – an estimated three-tenths of 1 per cent of US households.
Again, Ms Pelosi and liberal Democrats compromised; they wanted lower thresholds, of $280,000 for individuals and $350,000 for couples.
The House Bill would raise $20 billion by taxing the manufacturers of medical devices, including pacemakers and artificial hips.
Another version, which was passed on October 13th by the Senate finance committee, would raise $40 billion from the same source.
The Senate majority leader, Harry Reid, is in the process of merging two proposed Senate Bills.
The health committee’s Bill includes a public option; the finance committee’s Bill does not. Mr Reid created a stir earlier this week by announcing that his draft Bill would include a public option. It is not clear how he will obtain the 60 votes needed to pass legislation in the Senate.
Once the House and Senate approve separate pieces of legislation, a conference committee will merge the two versions before sending them back to both chambers.
A poll published on October 20th showed 57 per cent of Americans support a government health insurance plan, which is still opposed by all Republicans.
Three types of public options are being discussed in the Senate: one with an opt-out clause that would enable states to refuse the government option; an opt-in clause that would require active adherence to establish a plan in each state; or a trigger that would create a public option only if the private sector failed to provide affordable insurance.