Rent-to-own News - Senate health care bill introduced

Democratic Senate majority leader Harry Reid of Nevada, Wednesday unveiled his party's proposal for overhauling the health care system, outlining legislation Democrats say would cover most of the uninsured while reducing the federal budget deficit. The impact the proposed legislation would have on small businesses differs from the House version of the bill introduced last week.

Reid said at an evening news conference that the legislation, embodying President Obama’s signature domestic initiative, would impose new regulations on insurers, extend coverage to 31 million people who currently do not have any and add new benefits to Medicare, according to the New York Times.

Despite a price tag of $848 billion over 10 years, Reid said the proposal would reduce projected budget deficits by $130 billion over a decade because the costs would be more than offset by new taxes and fees and by reductions in the growth of Medicare.

The National Federation of Independent Business, representing many small businesses, remains opposed to the House version of the legislation.

According to NFIB Web site: "Congressional leaders will soon begin the complex task of merging these competing bills into a formal proposal for comprehensive healthcare reform. NFIB has been constructive participant during the entire process and will continue to work with lawmakers to support real reform for small business."

The NFIB maintains healthcare reform must address the 3 C’s: cost, choice and competition noting that Congress must work to bring down the cost of insurance for small business and their employees. Currently, NFIB says, small businesse pay 18 percent more for healthcare than big businesses. "Creating an equal playing field starts with improving the small group insurance markets," the NFIB Web site reads.

Another small business group, the Small Business Majority, praised the House bill but said the Senate needed to take more steps to lower costs. Neither organization has commented on the Senate proposal specifically as of press time.

Democrats expressed confidence that they would have the votes needed to move forward when the legislation hits its first test in the Senate, possibly this weekend. To get past that first procedural hurdle, Mr. Reid will need the votes of all 58 Democratic senators and the two independents aligned with them.

That vote would clear the way for what is sure to be an unpredictable roller-coaster ride of a debate on the Senate floor through much of December. Earlier this month the House passed its version of the health care legislation.

Republicans have vowed to fight the legislation at every turn, saying it represents a dangerous expansion in the role of government that would increase taxes and insurance costs for millions of people. “It’s going to be a holy war,” said Senator Orrin G. Hatch, Republican of Utah.

Under Reid’s bill, the government would establish a new public insurance plan, which would compete with private insurers. States could opt out of the public plan by passing legislation.
Though broadly similar to the House bill, Reid’s proposal differs in important ways. It would, for example, increase the Medicare payroll tax on high-income people and impose a new excise tax on high-cost “Cadillac health plans” offered by employers to their employees.

Both bills would create a voluntary federal program to provide long-term care insurance and cash benefits to people with severe disabilities.

Key to the House proposal is a mandate that small businesses with payrolls of more than $500,000 must provide health insurance to their workers or pay a fine. That is a higher figure than the $250,000 benchmark originally proposed. The Senate bill does not explicitly require employers to offer health insurance coverage, if an employer with more than 50 employees does not offer coverage and if any worker qualifies for a federal subsidy, the employer would have to pay a penalty, typically $750 for each of its employees.

Based on industry statistical data and salary averages, companies employing as few as 14 will likely reach the $500,000 payroll criteria of the House bill.

In addition, the House legislation makes tax credits available to companies with 10 or fewer employees on the payroll to help them provide coverage. There are approximately 450 single store RTO operators in the U.S. who would be due tax credits under this last provision.

The official cost analysis released by the nonpartisan Congressional Budget Office shortly after 11 p.m. showed that Reid’s bill came in under the $900 billion goal suggested by Mr. Obama. But 24 million people would still be uninsured in 2019, the budget office said. About one-third of them would be illegal immigrants.

The Congressional Budget Office has said the House bill would reduce deficits by $109 billion over 10 years and cover 36 million people, but still leave 18 million uninsured in 2019.

Republicans and some independent budget analysts said, however, that the savings might not be fully achieved because they were based on unrealistic assumptions about a sustained increase in Some economists say the tax could slow the growth of health spending by encouraging employers to pare back health benefits. Many labor unions oppose the tax.

Senate Democratic aides said the payroll tax increase would raise $54 billion over 10 years.

By contrast, the main source of new revenue in the House bill is a surtax on high-income people. The tax would be 5.4 percent of adjusted gross income exceeding $1 million for couples and $500,000 for individuals.

Reid’s bill would also raise revenue by levying annual fees on health insurance companies and pharmaceutical manufacturers. The Finance Committee would have imposed fees of $4 billion a year on manufacturers of medical devices, but Reid decided to cut those fees by half.

Under the bill, most people would be required to carry insurance. A person without insurance could be required to pay a financial penalty, starting at $95 in 2014 and rising to $750 in 2016, with a maximum of $2,250 for a family.