Tuesday, July 21, 2009


Today, I am posting the last four important provisions that have significant differences in the two proposed bills for heath care reformation. Before a final bill is acceptable to both houses there will have to be negotiations and compromises by both houses.

Meanwhile; Michelle Obama has become one of the Obama administration’s most visible surrogates on health care, announcing the release of $851 million in federal financing for health clinics, calling for tougher nutritional standards in the government’s school lunch program and urging Democrats to rally around the president’s efforts to revamp health care.

She has chosen to deliver her recent remarks in more traditional settings for a first lady — at a clinic, a playground and in the White House garden. Her aides say she will promote policy, not make it, and will continue to concentrate on children and families. They say they do not expect her to be accused of overstepping her bounds as Hillary Rodham Clinton was when she tried to remake health care as the first lady.

On Friday, the budget office’s director, Douglas W. Elmendorf, said the bill would add $239 billion to the national deficit over 10 years, partly because of an increase in Medicare spending to avert sharp cuts in payments to doctors. (This is much less than the $591 reported by the joint Senate committees-see yesterday. I will discuss doctor’s payments anon)

Mr. Orszag said taking out those doctor payments with a new policy would make the bill “deficit-neutral” over 10 years. On Saturday, President Obama in a radio address said he would reject any health legislation that would increase the deficit.
SUBSIDIES TO INDIVIDUALS: the Senate plan provides subsidies to offset premium costs for household below 400% of the federal poverty level [$88,200 for a family of 4] with those at the lower end receiving more.
The House bill provides subsidies to offset premium costs and out of pocket spending for household below 400% of the poverty level, with those of the lower end receiving more.

SUBSIDIES TO EMPLOYERS: The Senate bill provides tax credits to employers with fewer than 50 full-time workers who pay at least 60% of their employee’s health insurance premium. Credit amounts are based on a few factors, including the size of the employer and the type of coverage provided, and is available for up to three consecutive years.
The House bill provides tax credits to employers with fewer than 25 full-time workers. The credit can be up to 50% of the premium costs, dependent upon the size of the employer and the average wages, and is not offered for employees earning more than $80,000 per year.

EXPANSION OF MEDICAID: The Senate bill; extends Medicaid to all individuals with income up to 150% of the poverty level [$16,245 a person]. Currently Medicare covers millions of low income older Americans, people with disabilities, pregnant women, children and some parents, low income childless adults are generally not eligible.
The House bill; expand Medicaid to all individuals with incomes up to 133% of the poverty level about $14,400.

FINANCING: The Senate; estimated the 10 year cost to be about $1 trillion. The bill does not include financing proposals, because the Health Committee does not have the authority over taxes or Medicare or Medicaid. By Constitution all revenue raising legislation originates in the House.
The House bill estimates the ten-year cost about $1 trillion. To raise $544 million over 10 years by imposing an income surtax of families with incomes over $350,000 and individuals with incomes over 287. Raise much of the remainder by lowering spending on Medicare and other health care savings.

My future postings will deal with the objections from interested and pressure groups to various elements in the bills as they are as of this date. There will be no timetable for their posting. I hope this series has been of some value.

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