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Where does the healthcare overhaul legislation stand?

August 02, 2009|Noam N. Levey

WASHINGTON — Amid a flurry of activity on healthcare legislation, the House left Friday for its monthlong summer recess. The Senate will take off at the end of this week. The break comes as Democratic leaders are working to cobble together complex healthcare bills to bring to the floors of each chamber for votes this fall.

Here is an update on where the debate stands in Washington:

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Has Congress agreed on how to ensure that all Americans will be able get health insurance?

The two major bills that have cleared committees in the House and Senate would establish insurance marketplaces, or exchanges, through which individuals and small businesses could compare a variety of plans that meet basic standards to be established by the federal government.

The exchanges would include private plans as well as a government insurance program, which advocates say would pressure commercial insurers to lower costs and improve quality.

The government would provide subsidies to help low- and moderate-income people afford the insurance.

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Does that mean there will be a government plan?

Not necessarily. The government plan faces opposition from some who fear it could ultimately drive private insurers out of business. The nonpartisan Congressional Budget Office, or CBO, which is charged with evaluating the effects of legislation, has projected that would not happen.

But because Republicans and some centrist Democrats object to a government plan, a bipartisan group of lawmakers in the Senate Finance Committee is trying to develop an alternative. That might be a system of health insurance cooperatives owned by consumers.

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Will these exchanges really control the cost of healthcare?

Not by themselves. The two major bills include other provisions designed to encourage Americans to be healthier, such as eliminating co-payments for some checkups and other preventive care. Many believe that will ultimately save money.

The House bill also contains several pilot programs in Medicare to encourage hospitals and doctors to deliver care more efficiently. For example, one committee inserted a provision to reward programs that provide care to chronically ill senior citizens in their homes to prevent costly hospitalizations.

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Will that be enough?

Many business groups, labor unions and others believe the legislation must put even stricter limits on Medicare spending to curb unnecessary and inefficient care. The head of the CBO also has testified that the bills do not do enough to slow the growth of healthcare spending. Senior Democrats have pledged to adjust the legislation to do that over the August break.

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Would that mean that Congress won't raise taxes to pay for this healthcare overhaul?

That's still not clear. The House bill would assess a new surtax on individuals who make more than $280,000 and couples who make $350,000 a year to raise $544 billion to help offset the cost. House Speaker Nancy Pelosi (D-San Francisco) has indicated that she might move to raise those cutoffs to $500,000 and $1 million.

In the Senate, where there is little support for a new income tax, lawmakers are talking about other proposals, including taxing some health benefits or assessing fees on insurance companies. Senior Democrats plan to work on those details over the summer.

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noam.levey@latimes.com

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