Health Care Bill by Senate Finance Committee Should Include House’s Funding Strategy

[Joanne98]

Health Care Bill by Senate Finance Committee Should Include House’s Funding Strategy

by Mike Hall, Jul 15, 2009


A health care reform package that includes a public health insurance plan option, shared employer responsibility, cost containment and an end to private insurance company abuses was approved by a key Senate committee this morning.

Says AFL-CIO President John Sweeney:

This legislation demands shared responsibility so families are less burdened. It will make health care more affordable by controlling costs and improving quality. And most importantly, it will provide coverage for all and help reduce the ranks of the uninsured and underinsured. Sen. Chris Dodd and Chairman Kennedy’s hard work and dedication have put forth a bill that moves us one step closer to the finish line.

The action by the Senate Health, Education, Labor and Pensions (HELP) Committee comes one day after the House version of health care legislation was introduced. But unlike the House bill, the HELP committee’s measure does not address financing.


The Senate Finance Committee is reported to be close to finalizing the financing mechanisms for health care reform. Next, the two bills from HELP and Finance will have to be shaped into a single bill before the full Senate votes. After a series of hearings, the House is expected to vote on health care reform before it adjourns for its summer recess July 31.

Under the House version, about half the cost of health reform comes from Medicare modernization, the public health insurance option and the shared responsibility ”pay or play” requirement for employers.

But instead of taxing working families’ health care benefits, as some senators proposed, the House bill lands on the side of fairness. It calls for a small surtax on the nation’s wealthiest 1 percent to help provide health care for all Americans. In most cases, all or a large part of the surcharge is offset by the savings comprehensive health care reform will bring.

The House bill’s small tax surcharge applies to individuals making more than $280,000 a year and married couples with annual incomes over $350,000. A study by the Commonwealth Fund estimates that the House bill would save the average American household more than $1,600,a year in reduced health care costs, with those earning more than $150,000 annually seeing a yearly savings of $1,656 to $2,948.

With the proposed 1 percent surcharge, a single person earning $280,000 might see a savings of $148 a year or pay a health care reform surcharge of a little more than $1,100. A married couple with a $350,000 annual income would see a surcharge of between $552 and $1,884 a year.

The small surcharge doesn’t seem to be much of a burden on someone making $134 an hour ($280,00 a year), $192 an hour ($350,000 a year) or more.

No doubt health care reform opponents like the private health insurance industry, the health care lobby and conservative groups will scream loudly and repeatedly about raising taxes. But put into a common-sense perspective, the health care surcharge makes great sense.

A small surtax on the wealthiest 1 percent buys health care reform for America. That’s not much to finally get a handle on costs that are dragging down the entire economy. Even the wealthy will get a big chunk of their money back in savings. Their premiums won’t go up as fast, and no one will have to pay the hidden $1,000 insurance premium add-on to cover costs for uncompensated care.

The House health care surtax is a fiscally responsible investment. It will pay steady returns every year.
http://blog.aflcio.org/2009/07/15/health-care-bill-by-senate-finance-committee-should-include-houses-funding-strategy/