House Democrats reveal health care reform, government insurance option - MedCity Morning Read, July 15, 2009

WASHINGTON, D.C. — After months of work, Democrats in the House on Tuesday revealed sweeping health care reform proposals that include a government insurance option, more regulation of the private insurance market and other steps to ensure that every American has access to health coverage, the Los Angeles Times said.

The bill sets out new ways to curb the growth of health care costs, which are expected to consume $2.5 trillion this year alone. The $1 trillion cost of the plan over 10 years would be offset with a new tax on the wealthy, the L.A. Times said. The Associated Press reported that the plan would cost $1.5 trillion over a decade.

The proposal, which is one of the most liberal of several plans on the overhaul table, drew swift criticism from Republicans and more than 30 business groups, many of which have supported some form of change, the Times said. The Congressional Budget Office — a key vetter of reform plans — says the plan’s government insurance option would enrollÂ less thanÂ 5 percent of Americans, according to the Wall Street Journal Health blog.

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Sen. Jeff Bingaman, a New Mexico Democrat, has been working on a moreÂ moderate version of the bill in case it goes nowhere in the Senate, as expected. But President Obama and several liberal groups praised the plan, according to the L.A. Times. Democratic leaders hope to push the plan to a full vote of the House by month’s end, though some see this timetable as overly optimistic, the Associated Press said.

Nearly all Americans would be required to get health coverage, or pay a penalty based on adjusted gross income. Employers with payrolls of more than $400,000 would be given an option to provide coverage or pay the government 8 percent of payroll, the Times said. The law also calls for a 5.4 percent tax increase on people who earn more than $1 million a year, gradually phasing in for people who earn $280,000, the AP said.

In Massachusetts, though, legislators took a step back from universal coverage, eliminating health insurance for some 30,000 legal immigrants and reversing other movements toward covering all citizensÂ to close a widening budget gap, the New York Times said.

Because of its three-year-old health care law, Massachusetts has the lowest uninsured rate –Â 2.6Â percent compared with 15 percent nationwideÂ — of any state, the N.Y. Times said. That’s why Massachusetts isÂ seenÂ as an early example of how universal coverage could go nationwide. As has been the case all summer in Washington, cost in the midst of an economic recession has been the major barrier to universal coverage.