Senate Passes Health Care Bill; Reconciliation Will Bear Final Benefits

On a 60-39 party line vote, the U.S. Senate early Thursday morning passed a bill that will extend health care coverage to more than 30 million Americans. Congress must now reconcile an earlier bill passed by the House with the newly-passed Senate measure.

Health care industry and policy experts say any bill that gets more people insured is good for health care providers and the account receivable management professionals who work for them. 

Health care providers, for example, would have to deal with less bad debt. And medical debt collectors would be able to better identify and locate debtors through the paperwork associated with their doctors and insurers. The American Medical Association has even endorsed the Senate bill. 

But the differences between the House and Senate bills will have to be merged and passed before President Barack Obama can sign it into law. Some things lawmakers already agree on include a requirement that individuals get insurance, barring insurers from denying coverage due to pre-existing conditions, and blocking insurers from charging higher premiums because of gender or medical history. Each bill also limits the total out-of-pocket expenses policyholders must pay annually.

However, the House and Senate have drastically different solutions for paying for coverage delivery and the subsidies that will be offered to low and middle income families. Health care policy experts say that is where the real compromise must occur if the legislation is to become reality.

“It’s less about the benefit package, but what will be the level of subsidies for low to middle income people trying to buy insurance and how it will be paid for,” said Larry McNeely, health care advocate for U.S. PIRG.

The House bill calls for a government health care insurance option and imposes an income tax surcharge of 5.4% on individual income of over $500,000 a year and on families earning more than $1 million annually.  The Senate would increase the Medicare payroll tax on individuals who earn more than $200,000 a year and couples earning more than $250,000 from 1.45 percent to 2.35 percent.  The Senate bill also imposes a 40 percent tax on health care insurance plans valued at more than $8,500 pre year for individuals and $23,000 for families, as well as a 10 percent tax on indoor tanning salon treatments.

Nina Owcharenko, Deputy Director of the Center for Health Policy Studies at the Heritage Foundation, believes neither funding plan is optimal. In her latest blog, she said to fund health care reform Democrats choice is to either “soak the rich or tax everybody.”

Owcharenko said the House’s 5.4 percent tax is structured in a way that over time more and more Americans will be hit by the tax. “Small business owners would be particularly affected,” she said. Meanwhile, the Senate’s financing solution includes a new premium tax on all insurers that will be passed on to all Americans with private insurance, she said.