Compare the House and Senate Healthcare Bills
December 2, 2009
On November 7, the House passed the Affordable Healthcare for America Act (H.R. 3962). On November 20, the Senate voted to open debate on the Patient Protection and Affordable Care Act (H.R. 3590). Below is a comparison of the major provisions of the two bills.
This summary was adapted from that published in the NY Times 11/23/09. The original can be found at http://www.nytimes.com/interactive/2009/11/19/us/politics/1119-plan-comparison.html?
Major Provisions:
Individual Mandate
Employer Contribution
The Exchange
The Public Option
Individual Subsidies
Small-Business Subsidies
Medicaid Expansion
Minimum Benefits
Insurance Regulations
Dependent Coverage
Long-term Care
Cost and Effects
How It's Paid For
Abortion
Immigrants
Individual Mandate
Mandates that most citizens must carry of a minimum level of health insurance or pay a penalty.
Exemptions: Persons and families with proven financial hardships, Native Americans, persons with religious objections.
House Bill:
Imposes a penalty of 2.5% of adjusted gross income over certain thresholds ($9,350 for and $18,700 for couples).
Senate Bill:
Imposes a penalty starting at $95 a year per person, rising annually to a maximum of $2250 per family, unless the cost of the cheapest plan exceeds 8 percent of a household’s income.
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Employer Contribution
Requires most employers to contribute to the cost of coverage for some or all of their employees.
House Bill:
Require employers with annual payrolls of $500,000 to $750,000 or more to offer coverage to employees or pay a new federal tax.
Penalty: Increased payroll taxes. Employers with payrolls of $500,000-$750,000 would pay 2-6% of wages, and those with payrolls above $750,000 would pay 8%.
Employers would be required to contribute at least 62.5% of the premium cost for individuals, and 65% for families for the lowest-cost plan that meets the minimum benefit requirement.
Senate Bill:
Does not explicitly require employers to offer coverage. But a company with 50 or more full-time employees would pay a penalty if it does not offer health insurance and if any of the workers obtain subsidized coverage through the Exchange.
Penalty: $750 for each full-time worker in the company.
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The Exchange
Creates health insurance marketplaces (“Exchanges”), giving citizens and employers the opportunity to shop for insurance, comparing various options.
House Bill:
Open to people without coverage through an employer or public program, or employers with fewer than 25 employees in the first year, 50 in the second and 100 in the third. Overtime, access will be expanded to include larger employers, eventually aiming to include all employers.
Senate Bill:
States form their own exchanges or combine with other states to form regional exchanges. Open to people without qualifying coverage through an employer or a public program. Open to employees with 50 or fewer employees, but states could allow employers with 100 workers to join. By 2017, states could allow larger businesses to join.
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The Public Option
Creates a new government insurance plan (the “public option”) to compete with private insurers.
House Bill:
Payment rates would be negotiated with doctors and hospitals (rather than using Medicare rates set by the government.) $2 billion would be allocated by the government as start-up money, but the plan must be self-sufficient, relying on beneficiary payments.
Senate Bill:
Payment rates would be negotiated with doctors and hospitals. Individual states could adopt a law to opt out of the public plan. The plan would also have to be self-sufficient, apart from initial start-up money.
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Individual Subsidies
Provides tax credits to low- and middle-income people to help them buy insurance through the Exchange.
House Bill:
People with incomes up to 400 percent of the poverty level ($88,200 for a family of four) are eligible.
The House bill provides stronger subsidies for persons and families with incomes from 133%-250% of the federal poverty level (FPL). This bill establishes a cap on the amount that individuals are expected to contribute to the cost of insurance premiums. This cap is set at 2.8% of income for those at 133% of FPL, and increases to 9.8% for those at 300-400% of FPL.
Senate Bill:
People with incomes up to 400% of the poverty level are eligible.
The Senate bill provides stronger subisides for persons and families with incomes from 250%-400% of the federal poverty level (FPL). This bill establishes a cap on the amount that individuals are expected to contribute to the cost of insurance premiums. This cap is set at 1.5% of income for those at 133% of FPL and increases gradually to 12% of income for those at 400% of FPL.
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Small-Business Subsidies
Provides tax credits to small businesses that want to offer coverage, and subsidizes employer plans that cover early retirees, ages 55-64.
House Bill:
Qualifying are employers with 25 or fewer workers and average wages of $40,000 or less. The subsidy amount – up to 50 % of premium costs – would be phased out as firm size and average wages increase. Credits are not applicable to employees earning $80,000 or more annually.
From 2013-15, the federal government would cover 80% of a retiree’s medical claims exceeding $15,000, with a cap of $90,000. The employer’s plan would pay the rest.
Senate Bill:
Qualifying are employers with 25 or fewer workers and average wages of $40,000 or less. The subsidy amount – up to 50 % of premium costs – would be phased out as firm size and average wages increase.
Through 2013, the federal government would pay 80% of the cost of a retiree’s medical claims exceeding $15,000, with a cap at $90,000. The employer’s plan would pay the rest.
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Medicaid Expansion
Expands Medicaid to cover millions of additional people, including parents and childless adults not eligible under current rules.
House Bill:
Extends coverage to everyone with incomes below 150% of the federal poverty level ($33,075 for a family of four). This would result in an estimated 15 million new recipients.
The federal government would pay all costs for those newly eligible for two years and 91% thereafter.
Senate Bill:
Extends coverage to everyone with incomes below 133% of the federal poverty level ($29,327 for a family of four). This would result in an estimated 14 million new recipients.
The federal government would pay all costs for the first three years. After 2016, the share of federal spending would vary annually, averaging around 90%.
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Minimum Benefits
Require insurance plans to offer a minimum package of benefits, to be defined by the Secretary of Health and Human Services.
House Bill:
The basic plan would cover 70% of the cost of benefits. Deductibles, co-payments, and other charges to the consumer would cover the remainder.
The Exchanges would offer three other benefit plans, covering up to 95% of costs.
Senate Bill:
The basic plan would cover 60% of the cost of benefits, with deductibles, co-payments, and other charges covering the rest.
Exchanges would offer three other benefit plans, which would cover 70-90% of the costs. The Congressional Budget Office notes that policies purchased in the individual market now average 55-60%.
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Insurance Regulations
Prohibits insurers from denying coverage or charging higher premiums because of a person’s medical history or health condition.
House Bill:
Premiums for older people cannot be more than double that of young adults.
Strips insurance companies of their exemption from federal antitrust laws. Price-fixing, bid-rigging, and “market allocations” by companies that sell insurance would be outlawed.
Senate Bill:
Premiums for older people cannot be more than three times the premium of that for young adults.
Insurance companies would retain their exemption from federal antitrust laws.
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Dependent Coverage
Requires health plans, including employer-sponsored plans, to cover children of policyholders up to a certain age.
House Bill:
Allows children to remain on their parents’ insurance plans through age 26. Currently, states set the age at which young adults can no longer be covered by their parents’ insurance.
Senate Bill:
Allows children to remain on their parents’ insurance until age 25.
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Long-term Care
Creates a voluntary federal program to provide long-term care insurance and cash benefits to people with severe disabilities.
House Bill:
Premiums would cover the full cost of benefits, which would average at least $50 per day. Workers would be required to contribute for at least five years before they could collect benefits.
Senate Bill:
Premiums would cover the full cost of benefits, which would average $75 a day, according to the Congressional Budget Office.
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Cost and Effects
Ten-year estimates of the cost and effects of the legislation from the Congressional Budget Office.
House Bill:
Overall cost: about $1.052 trillion. Expected to reduce the federal deficit by $139 billion.
6 million people would gain coverage, leaving 18 million uninsured.
Senate Bill:
Overall cost: about $849 billion. Expected to reduce the federal deficit by $130 billion.
1 million people would gain coverage, leaving 23 million uninsured.
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How It’s Paid For
Creates new sources of revenue, curbs Medicare payments to hospitals and other healthcare providers.
House Bill:
Imposes a 5.4% surtax on high-income people (couples with adjusted gross income of more than $1 million annually, and individuals over $500,000). Expected to raise $400 billion from 2011-2019.
A 2.5% excise tax on medical devices sold for use in the U.S. Expected to raise $20 billion from 2013-2019.
Squeeze $404 billion out of the projected growth in Medicare and other federal programs over 10 years, including $117 billion in cuts to the Medicare Advantage program. (The government currently pays 14% more for MA plans than for the same people with traditional Medicare coverage.)
Senate Bill:
A 40% excise tax on so-called “Cadillac” health plans – employer-sponsored group health plans with annual premiums over $8,500 for individual coverage and $23,000 for family. Expected to raise $149 billion from 2013-2019.
Annual fees, allocated by market share, on health care companies: $6.7 billion on insurance companies; $2 billion on manufacturers of medical devices; and $2.3 billion on drug makers. Expected to raise more than $100 billion from 2010 to 2019.
Squeeze $436 billion out of the projected growth in Medicare and other federal programs over ten years, including $118 billion in cuts to the Medicare Advantage program.
Increase in the Medicare payroll tax, from 1.45% to 1.95% for workers with incomes of more than $250,000. Expected to raise $54 billion from 2010-2019.
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Abortion
Prohibit use of federal money for abortion, except as allowed by current law – in cases of rape or incest, or if the life of the pregnant woman is in danger.
House Bill:
Health plans could choose whether to cover abortion.
Low- and middle-income people who receive federal subsidies to buy insurance could not choose a health plan which covers elective abortions.
The public plan would not provide abortion coverage.
Senate Bill:
Health plans could choose whether to cover abortion. In each state, there would be one plan that covers abortion and one that does not.
Low and middle-income people who receive federal subsidies to purchase insurance could enroll in health plans that cover abortions. But insurers would be required to segregate their federal subsidies into separate accounts and use only the premium money and co-payment contributed by consumers to cover procedures.
The public plan could provide abortion coverage, but would have to segregate federal dollars, just like private plans.
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Immigrants
Limits access to health insurance Exchanges and federal subsidies for undocumented immigrants.
House Bill:
Undocumented immigrants would be able to purchase insurance through the Exchange, but would be ineligible for federal subsidies.
Senate Bill:
Undocumented immigrants would not be permitted to purchase insurance through the Exchange, even if they paid for it themselves, without federal subsidies.
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