House health-care reform bill includes public option

Thank you for your time with my blogs and welcome back in the near future.

By Shailagh Murray
Washington Post Staff Writer
Thursday, October 29, 2009 11:04 AM

House Speaker Nancy Pelosi (D-Calif.) unveiled a health-care reform bill Thursday that includes a government insurance option and a historic expansion of Medicaid, although sticking points involving abortion and immigration remain unresolved.

The bill includes a version of the "public option" preferred by moderates and raises Medicaid eligibility levels to 150 percent of the federal poverty level for all adults, a steeper increase than in earlier drafts.

"Today we are about to deliver on the promise of making affordable, quality health care available for all Americans," Pelosi said, describing a bill that she said would insure 36 million more Americans. ". . . We are putting forth a bill that reflects our best values and addresses our greatest challenges."

The House legislation aims to provide health insurance of one form or another to 96 percent of all Americans at an expected cost just below $900 billion over 10 years, without increasing the federal budget deficit for at least 20 years, House Democrats said. Republican lawmakers quickly dismissed the bill as an attempted government takeover of healthcare. But Pelosi said the legislation "opens the doors to quality medical care for those who were shut out of the system for far too long."

House leaders abandoned an earlier effort to include a public option that would have established reimbursement rates to providers based on Medicare. Although the provision was backed by liberals, it lacked enough votes to pass. Rural Democrats strongly opposed that approach because of the potentially ruinous effect on doctors and hospitals in their districts, where Medicare rates are generally well below the national average.

Instead, Pelosi is offering a more moderate alternative in which rates would be negotiated between providers and federal health officials, similar to the way in which private insurance operates. Majority Leader Harry M. Reid (D-Nev.) said he would include a similar provision in the Senate bill, though with an "opt out" clause for states that don't want to participate.

A previous version of the House bill carried an estimated cost of $1.04 trillion over 10 years, but House negotiators were able to lower the price tag -- in part by expanding Medicaid coverage to a broader slice of the population, the equivalent of all individuals who earn about $16,200 per year. The original House legislation had sought an increase to 133 percent of the federal poverty level, or about $14,400 per year, the same level proposed in the Senate bill.

The adjustment reflects findings by congressional budget analysts that covering the poor through Medicaid -- which pays providers far less than Medicare -- is much more cost-effective than offering subsidies for private insurance policies, something the bill would provide to middle class individuals who lack access to affordable coverage through their employers.

The main revenue sources in the House bill include a surcharge on wealthy taxpayers and changes to Medicaid and Medicare worth about $500 billion in cost savings over 10 years, according to the nonpartisan Congressional Budget Office.

Democratic House aides said party leaders had yet to resolve long-standing disputes over provisions to prevent federal funds from being used to subsidize abortions and to block illegal immigrants from receiving benefits.