Differences Between the House and Senate Healthcare Bills

As someone who relies on private health insurance for my family (the monthly cost to cover my entire family through my employer would top $600 per month!), I’ve been watching the healthcare debate closely. I’ve been especially concerned about legislation that would provide a fix for the existing preexisting condition clauses that prohibit many from being able to obtain private health insurance. That would be fixed in both bills.

Reading through thousands of pages of legislation in my free time hasn’t been doable. Instead, I’ve used several reputable websites to put together the following summary of differences between the two bills. The resources I’ve used for this summary are available at the end of the blog post.  Surly this is not a comprehensive list, but I think it does represent some of the major differences I’ve seen between the two bills.

General Summary

Since the Senate needs to maintain all 60 votes to kill any Republican-led filibuster, it is likely that the Senate bill will win out in most instances over the House bill.Both the House and Senate bills are estimated to cover 94 percent of all legal residents under 65. The Senate bill will kick-in in 2014 while the house will start in 2013. The major differences seem to rest on: abortion policy, taxes (cost offsets), and a proposed government-run health-insurance plan.

Both would cost about $1 trillion over 10 years and pay for themselves via cuts in projected Medicare spending and tax and fee increases. Both would ban insurance firms from denying anyone coverage due to pre-existing health conditions.

House Bill

• Total Cost: $1.6 Trillion over 10 years
• Offsets: Would add a 5.4 percent surcharge on families with annual incomes over $1 million and on individuals with incomes over $500,000.
• Would mandate health insurance coverage for all Americans and provide tax subsidies to help lower- and middle-income families comply with the mandate. The penalty for not purchasing insurance would be up to 2.5 percent of a person’s income.
• Includes a public insurance option, a government-run insurance plan that would negotiate payment rates with doctors and hospitals.
• Employers must provide insurance to their employees or be subject to an 8 percent penalty on their payroll. Companies with payrolls under $500,000 will be exempt.
• Has stronger abortion language prohibiting federal funds from being used to pay for such procedures

Senate Bill

• Total Cost: $871 billion over 10 years
• Offsets: Charging a 40 percent tax on insurance plans (Cadillac plans) costing over $8,500.
• Would add extract fees from insurance companies, drug-makers, and medical device manufacturers. The Senate bill would also increase the income tax by 2.35 percent on individuals making more than $200,000 a year and couples making $250,000.
• Would mandate health insurance coverage for all Americans and provide tax subsidies to help lower- and middle-income families comply with the mandate. The penalty for not purchasing insurance would be up to $750 or 2 percent of a person’s income.
• Would expand Medicaid
• Would leave the existing employer-based health system largely intact. However, large companies (employees with more than 50 employees) would have to pay a penalty of $750 per worker if they don’t provide affordable insurance and their workers end up seeking government assistance.
• New state-based health-insurance exchanges would become the main marketplace for people buying coverage without the help of an employer.

Resources: Insurers Brace for Sweeping Changes to Industry Landscape (The Wall Street Journal); Senate, House to Haggle Over Differences (The Wall Street Journal); Senate Democrats Pass Health Care Reform Bill (Roll Call); Talks to Merge Health Care Bills Begin Behind the Scenes (Roll Call); Three big differences between House and Senate healthcare bills (The Christian Science Monitor)