House Approves Landmark Health Reform

November 10, 2009 – By a 220-215 vote late Saturday, the U.S. House of Representatives passed the most comprehensive reform of our nation’s health insurance system since Congress created Medicare and Medicaid over four decades ago. The bill (H.R. 3962) creates a new insurance exchange similar to the one available to members of Congress and expands Medicaid to reduce our nation’s uninsured population by over two-thirds—all without taxing health benefits.

After months of hearings and years of debate, the three relevant committees in the House—Energy and Commerce, Ways and Means, and Education and Labor—passed their versions of the health reform bill before the August recess. Last week, House leadership rolled out a compromise bill reconciling the differences between the committee drafts, and making key concessions to appeal to conservative Blue Dog Democrats who have been concerned about the overall cost of the package. Passage was secured by last-minute deals on two controversial issues: barring illegal immigrants from participating in the new health programs and reducing insurance coverage of abortion.

The IAFF, along with other unions and led by congressional champion Representative Joe Courtney (D-CT), successfully beat back efforts to tax benefits to pay for reform. The bill would instead impose a surtax on those making over $1 million a year. “There is a right way and a wrong way to pay for healthcare reform,” says IAFF General President Harold Schaitberger. “The House bill is the right way, without taxing our members’ hard-earned health benefits.” The IAFF has made opposition to taxing health benefits the focal point of its health care lobbying. “We will continue to oppose any proposal to tax our members’ insurance benefits,” adds Schaitberger.

The bill addresses the two biggest health care challenges—the increasing cost of insurance and the growing ranks of the uninsured—in several different ways. The exchange created by the bill would help drive down the cost of health care by promoting competition between insurance companies, and the expansion of Medicaid would provide coverage to many people who currently cannot afford to buy insurance.

Other important provisions of the bill include a $10 billion retiree reinsurance program to encourage employers—including state and local governments—to provide coverage to retirees; insurance reforms that prohibit insurers from denying coverage based on pre-existing conditions; eliminating the Medicare “donut hole”; and an increase in federal assistance to state Medicaid programs, giving states some much-needed budget relief. The Congressional Budget Office (CBO) estimates that once the reforms are fully implemented, the legislation will significantly reduce federal spending on health care and will reduce the overall federal debt.

House passage is merely one more step in a process that will continue for several more weeks. Senate leadership will soon unveil a compromise version of health care based on the work of two different committees. Once the bill reaches the Senate floor, a marathon floor debate is expected, likely to last weeks or even months. President Obama continues to press the House and Senate to put a bill on his desk by the end of the year.