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House Bill is Best Remedy for Nation’s Broken Health Care System

The U.S. House of Representatives in November approved a health care bill that goes far toward achieving the long-sought goal of affordable health care for all.

U.S. House of Representatives' Bill Best Remedy for Nation's Broken Health Care System

Senate version falls short of true reform that guarantees quality, affordable health care for all. The battle continues.

The U.S. House of Representatives in November approved a health care bill that goes far toward achieving the long-sought goal of affordable health care for all—a measure that would not tax our health care benefits and includes a public option to help reduce the high costs that put insurance out of reach for millions of Americans. The U.S. Senate passed its own version on Christmas Eve that stops far short of that goal. As AFSCME WORKS went to press in January, House and Senate leaders were beginning negotiations to work out their differences and send a final bill to the White House.

While we are a step closer to an historic achievement that has so far eluded seven U.S. Presidents, we have much work to do to ensure that the final legislation adopts features of the House bill that protect the coverage we have, help lower our costs, and ensure that our family members, friends and neighbors have access to affordable coverage.

Taxing Your Benefits

Working families are already struggling with the high cost of health care coverage. The last thing they need is a tax on their medical insurance. The House bill would finance reform fairly by imposing a small surcharge on wealthy families—those earning more than $1 million annually ($500,000 for an individual).

The Senate bill, on the other hand, would tax the benefits of working families through an excise tax on high-cost health plans. That would force many of our employers to demand reductions in benefits, increases in deductibles and co-payments, or both. AFSCME leaders and activists around the country are lobbying hard against this tax.

Employer Responsibility

The House bill would build on our employer-based system of coverage by requiring them to provide good insurance to their workers and to pay a substantial share of the premiums. As a result, millions more workers would have benefits provided through their job, instead of having to purchase coverage on their own.

Employers who decline to provide coverage would be required to pay 8 percent of annual payroll into a fund to help subsidize it for low-and moderate-income workers who purchase coverage on their own. Small employers would receive an exemption and be eligible for subsidies to purchase coverage for their workers. By contrast, the Senate bill would not make employers provide coverage or pay their fair share of reform’s cost. Instead, employers that fail to provide coverage would pay a very small penalty. As a result, almost the full financial burden for coverage for these workers would be borne by the workers themselves and by the government through subsidies provided to these families.

The Public Option

A robust public insurance option is the key to preventing insurance companies from putting profit ahead of providing health care coverage. This alternative program, run by the federal government, would help lower costs and improve coverage by creating real competition in the insurance market.

The House bill comes closest to achieving this goal. It would enable participants who enroll in a new insurance exchange pool to choose between private health plans or a quality, public health insurance plan option similar to Medicare but available to people under 65.

The Senate bill does not include a public option.

Combining Bills

While there are many provisions of the bill passed in the House that address most of our concerns, several features of the Senate bill represent an improvement over our current situation.

For instance, both the House and Senate bills would provide subsidies for low-and moderate-income workers who do not receive coverage through their jobs and must buy health insurance on their own. By extending coverage to those without it, both bills would reduce the cost-shifting that happens in our current health care system when uninsured individuals are unable to pay for their care. This practice now adds more than $1,000 per year to the premiums of insured families.

In addition, both the House and Senate bills address many abuses by insurance companies. The House version would prohibit insurance companies from denying coverage for pre-existing conditions, or dropping coverage when people get sick. It would also prevent plans from establishing lifetime and annual limits on how much can be paid out to an individual, and ensure that those with major health problems like cancer will receive the care they need. The Senate bill also addresses these reforms—but less comprehensively.

Under both bills, insurers would be required to spend no less than 80 percent of premiums on health care services, reducing what can be diverted to marketing and profits.

For the elderly, both the House and Senate would eliminate over time the so-called ‘donut hole’ of Medicare Part D. Currently, those with extra high medication costs experience a gap in coverage, forcing them to pay more than $4,000 out-of-pocket annually for medications until their prescription drug coverage resumes. Importantly, both bills reduce government subsidies to private Medicare Advantage plans that compete with traditional Medicare. These subsidies undermine the financial stability of Medicare and force seniors in traditional Medicare to pay higher premiums.

Importance of Reform

The need to reduce the explosion of health care costs is clear. We’ve negotiated good coverage, but over the years, we’ve also given up wage increases in order to hold onto our benefits. But the path we are on is not sustainable.

The cost of insurance will continue to rise because the system is geared to increase profitability while reducing care for those who need it the most. It’s no mystery why insurers drop people with significant medical problems or refuse to cover pre-existing conditions. It causes the insurance companies to lose money.

The problem is too big to be solved through collective bargaining alone. That’s why we need comprehensive reform now. AFSCME will judge the final bill on its ability to protect the coverage we have and help control skyrocketing costs. - The Editors