On November 18, Senate Majority Leader Harry Reid (D-Nev.) finally released a health care reform bill, the Patient Protection and Affordable Care Act. The bill is the result of merging and modifying two Senate committee drafts, as well as adding new taxes. The Congressional Budget Office (CBO) cost estimate of the bill is $849 billion over the next ten years. The bill's initial cost is less than the House passed bill and President Obama's target of $900 billion. The bill is paid for by increasing Medicare taxes and taxing high cost health care plans.

The bill would allow states to opt-out of a government run public health insurance plan, require Americans to have health coverage or pay a penalty, and require employers with 50 or more employees to pay a penalty for each employee who received government subsidies to purchase coverage through the exchange.

The largest revenue raiser is the tax on high-cost health insurance plans. Plans with yearly premiums of $8,500 for individuals and $23,000  for families would be subjected to a 40 percent excise tax, which is higher than previous Senate drafts. The increased Medicare payroll taxes would raise $54 billion over the next decade by increasing the rate from 1.45 to 1.95 percent on individuals earning $200,000 a year and joint filers earning $250,000 a year. The individual mandate would begin in 2014 and start at $95 per year for each American without coverage and would rise to $750 each year in 2016. 

The bill includes insurance reforms that would prohibit health insurance companies from canceling policies after an individual becomes sick. There would be no lifetime or annual limits on coverage. The plan would help Medicare recipients afford coverage and would assist in paying for prescription drugs.

It is expected that the Senate will begin debate on Saturday by holding their first procedural vote on the bill where it must get 60 votes. If it passes as expected, the Senate would continue to debate the bill and begin voting on amendments after Thanksgiving, holding a final vote in December. Next, the bill will be conferenced with the House bill, which is expected to occur in January before the State of the Union Address.

Many of the procedural votes and eventually the amendments and final passage will require 60 votes. Currently, Democratic holdouts appear to be Senators Ben Nelson (Neb.), Mary Landrieu (La.) and Blanche Lincoln (Ark).  It is expected that they will support the first set of procedural hurdles.

AGC opposed the House bill because it included an employer mandate, created a public option that will compete with private insurance, mandated benefits for all employees, did not curtail either federal/state costs for Medicare and Medicaid nor reduced private insurance premiums, did not curtail medical malpractice costs and included a significant surtax on high income earners that will be particularly harsh on companies organized as subchapter S corporations.  AGC is currently analyzing the Senate's 2,000 page bill, its impact on the construction industry and how it could be altered to reduce costs and make coverage more affordable.

For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org.

Thousands of AGC members respond to call to action

Last Saturday night the House passed the Affordable Health Care for America Act 220 to 215 (click here to view how your members voted) along party lines with 39 Democrats opposing and one Republican supporting.

The debate now shifts to the Senate where Majority Leader Harry Reid is getting Presidential pressure to wrap up the debate before Christmas and Reid may force the Senate to work Saturdays in December to debate the bill. However, there is still no final bill in the Senate and Senator Reid will not have a Congressional Budget Office cost estimate of his latest draft version of health care reform until the end of this week.  With the close House vote, the Senate will be more deliberate and methodical in its approach than the House. Senate moderates who represent states where House members opposed the bill will now feel a tremendous amount of pressure from their constituents, which creates one more hurdle Senate Democratic leaders have to overcome in order to convince already skittish moderates to support reform.

Senate targets are the senators from the following states: Arkansas, Alaska, Colorado, Indiana, Louisiana, Maine, Missouri, North Carolina, Nebraska and Virginia. For more information on proposed health care reform, visit AGC's Health Care Web site.

AGC opposed the $1 trillion "Affordable Health Care for America Act," because it failed to address the root cause of rising costs, will likely eliminate competition and restricts economic growth with punitive penalties for employers. AGC members answered the call to action last week by sending over 4,000 letters to Congress in less than 24 hours in opposition to the bill. This response brings this year's efforts to over 8,000 individual messages. As the debate shifts to the Senate, AGC of America will again be calling on Chapters and members to advocate for affordable, quality health care through broader coverage, choice and competition in the marketplace.

Key provisions of the House bill include:

• Employers will be subjected to an 8 percent payroll tax for each employee that does not receive coverage from the employer, even if the employer offers adequate benefits - as determined by a government entity - but the employee chooses to enter a government plan.
• Mandated expansive coverage and the existence of the public plan in the legislation will likely eliminate much of the nations' private insurance. It is not feasible that the government can be both regulator and participant in the health care system.
• The $1 trillion bill will be financed by $460 billion in new taxes and $500 billion in future Medicare cuts. The new taxes include a surtax for individuals with income above $500,000. This tax will be especially harsh for businesses structured as pass through entities where the business taxes are paid by the individual company owners, making it more difficult for the employer to operate the business and create or even retain jobs.
• The punitive business taxes and new and future mandates on insurance coverage will fail to lower the costs of purchasing health care and could stifle economic growth at a time when the industry is already suffering unemployment that is nearly double the national average.

For more information, please contact Jeff Shoaf at (202) 547-3350 or shoafj@agc.org.

AGC urges members to contact members of the House of Representatives and ask them to oppose H.R. 3962, the Affordable Health Care Choices Act.

AGC opposes this bill because it  will not control health care costs and will likely increase the cost of health care across the board. The House will likely vote on this proposal over the weekend. For additional information and to access AGC's Legislative Action Center, visit http://www.agc.org/cs/health_care_reform.

AGC is supporting a new ad campaign launched as part of a broad business community effort to explain some of the economic challenges various proposed health care "reform" efforts pose for employers nationwide.

View the new advertisement here, and write to Congress using AGC's Legislative Action Center.

Includes employer mandates, insurance policy mandates, premium and tax increases, and Medicare cuts

After weeks of behind-the-scenes negotiations, House Speaker Nancy Pelosi (D-Calif.) released legislation that will overhaul the nation's health care system. The 1,900 page legislation comes with a preliminary cost estimate from the Congressional Budget Office of $900 billion over the next ten years. The cost estimate only pertains to the expanded coverage and not other changes to existing programs, so the official price tag could significantly increase to over $1 trillion.  A major change from previous versions of the legislation is that many of the reform timeframes will be moved up, allowing democrats to enter the 2010 and 2012 elections with some achievements.

The majority of the Affordable Health Care for America Act is financed through a surtax on married couples with adjusted gross incomes exceeding $1 million a year and individuals earning over $500,000 a year.  The surtax is not indexed for inflation and would begin in 2011 at a 5.4 percent rate.  Previous drafts of the legislation had thresholds of $280,000 for individuals and $350,000 for couples, but it was indexed for inflation.  The tax will generate $460.5 billion, much of it from small business owners who are at the forefront of our economic recovery.

In addition to the surtax, businesses with a combined annual payroll exceeding $750,000 will be required to pay an 8 percent penalty for its uninsured workers.  Employers who choose to offer coverage must contribute at least 72.5 percent of premiums for individuals and 65 percent for families.  The legislation includes credits for small business but they provide small employers limited value.

The legislation contains a government insurance option and expands Medicaid. It also includes a corporate information reporting proposal, which would require reporting on most third party transactions, limit the amount employees can contribute to health care flexible spending accounts, end deductions companies can take for retiree prescription drug coverage, and increase penalties for nonqualified distributions from health savings accounts.

AGC supports health care reform that expands coverage and makes coverage more affordable. However, H.R. 3962 fails to reduce costs and address the rising cost of insurance. The current proposal will increase insurance premiums and will impose indirect tax increases on employers to pay for the reform.

Democratic leaders in both chambers continue to work out the final details of sweeping health care reform legislation before it can be brought for a vote.  The major sticking point remains the inclusion of a public option. It appears that the House will be able to pass a bill with the public option and the Senate is having trouble finding 60 senators to support it.

The Senate bill must be fully merged with the two committee versions and then sent to the Congressional Budget Office for final cost analysis before it can be brought for a vote. On Monday the 1,500 page Legislative Language of S. 1796, the America's Healthy Future Act was released. The process of fully merging the bill and sending the bill to CBO could occur as early as this week.

AGC remains concerned over employer mandates, the penalties for companies that cannot afford to provide health care, the uncertainties in coverage requirements, the affect on temporary and seasonal employees, the limitations on FSAs, HSAs and HRAs, and expanded COBRA mandates. Even with the CBO score of the Senate Finance bill, AGC remains concerned that the exorbitant costs of the proposed plans will result in increased taxes on individuals and companies. AGC supports reform that increases coverage, choice and competition in the marketplace. The inclusion of a public plan in the legislation will likely drive private insurers out of the market and the projected savings from the proposed legislation may never materialize, resulting in further tax increases to make up the shortfall.

On October 13, the Senate Finance Committee finished its two-week markup of a health care reform bill with a 14 to 9 vote to report the bill out of the committee. The only Republican to support the measure was Senator Olympia Snow (R-Maine).  

The final committee vote had been delayed to give the Congressional Budget Office (CBO) time to provide a cost analysis of the bill and the 150 amendments that had been considered during the process. CBO forecasted the bill will cost $829 billion over 10 years, reduce the federal deficit by $81 billion and provide up to 94 percent of all Americans with health care coverage. Several members of the Committee who voted in favor of the bill did so reluctantly, as they only support moving the debate forward but are unwilling to endorse the bill as it is currently drafted.  The issues of major concern remain the inclusion of an employer mandate, tax on "Cadillac" plans, and whether to include a public option.

Despite the vote in the Finance Committee, work remains to bring a bill to the floor for a vote. The Senate Health, Education, Labor and Pensions Committee passed its own version of health care reform legislation in July and must now be merged with the Finance Committee's version.  The process is underway and is being spearheaded by Senate Majority Leader Harry Reid (D-Nev.) and administration officials. The process could become contentious as liberal and moderate members of his party square off over the inclusion of a public option. The Democratic leadership must try to craft a bill that can receive 60 votes on the Senate floor.  The leaders plan to hold a vote at the end of October.

The House remains in a similar situation. Three committees of jurisdiction passed health care reform legislation in July; however each committee passed a separate bill. The Democratic leadership in the House must craft one bill before it can be sent to a vote by the entire House. The House leaders are confronted with the task of satisfying multiple factions of Democrats in order to garner enough support for passage. No Republicans are expected to support the measure, and groups of Democrats have been outspoken against inclusion of a public option and some even argue that the bill is too moderate. In the end, the bill is expected to easily pass without Republican support. The leaders are hoping to hold a vote the first week of November.

Due to the drastically different versions of the House and Senate bills, they will be required to be conferenced together if they pass each chamber before the President can sign one bill into law. As of now it is not guaranteed that the bills could reach this process, but the President and Congressional leaders remain committed to passing a bill this year, likely sometime between Thanksgiving and Christmas.

Over the next several weeks AGC will continue to advocate against an employer mandate and the penalties for companies that cannot afford to provide health care. AGC remains concerned that the bills create uncertainties in coverage requirements, negatively affect temporary and seasonal employees, and impose limitations on FSAs, HSAs and HRAs, and expand COBRA mandates. Despite the recent CBO score, AGC remains concerned that the exorbitant costs of the proposed plans will result in increased taxes on individuals and companies.  AGC supports reform that increases coverage, choice and competition in the marketplace. The inclusion of a public plan in the legislation will likely drive private insurers out of the market and the projected savings from the proposed legislation may never materialize, resulting in further tax increases to make up the shortfall.

With amendment debate completed and an official Congressional Budget Office (CBO) score in hand, the Senate Finance Committee is poised to vote on and pass their modified bill out of committee on Tuesday October 13. 

The bill will then head to the Senate floor once it is merged with the Senate Health, Education, Labor and Pensions Committee bill by Majority Leader Reid's staff.  Senate Democrats plan to have the health package on the Senate floor by the week after next.

Following the more than week long mark-up, CBO determined the Finance bill would cost $829 billion over 10 years, $55 billion more than Chairman Baucus' original mark. CBO predicted the Finance Committee bill will reduce the federal deficit by $81 billion and provide up to 94 percent of all Americans with health care coverage.

During debate several contentious issues were not resolved. In the end, the public option was not added, employer mandates remain, and Cadillac plans will still being taxed.

In the House, the Chairman of the House Ways and Means Committee, Charlie Rangel expects to get his bill completed this week and sent to CBO to be scored.  Democratic leaders in the House are looking at options to help pay for healthcare reform, including instituting a windfall profits tax on insurance companies.  Timing of a bill moving in the House remains fluid as Democratic leaders try to address the concerns of their liberal and conservative members.

AGC remains concerned over employer mandates, the penalties for companies that cannot afford to provide health care, the uncertainties in coverage requirements, the affect on temporary and seasonal employees, the limitations on FSAs, HSAs and HRAs, and expanded COBRA mandates. Even with the CBO score of the Senate Finance bill, AGC remains concerned that the exorbitant costs of the proposed plans will result in increased taxes on individuals and companies.  AGC supports reform that increases coverage, choice and competition in the marketplace. The inclusion of a public plan in the legislation will likely drive private insurers out of the market and the projected savings from the proposed legislation may never materialize, resulting in further tax increases to make up the shortfall.

The Senate Finance Committee continues to work on a comprehensive health care reform bill. The Democratic leadership had hoped to have the Committee finish its work last week and move toward merging its version with the Senate Health, Education, Labor and Pensions Committee's (HELP) version. However, the Committee has continued to meet to discuss numerous amendments and delays receiving the legislation's final cost estimates.

Although the committee continues to work, many senators are considering working out differences after the committee adjourns. Major differences include whether or not to include a public option, instituting employer mandates and changing the tax on "Cadillac" plans. The amendments the committee has dispensed with have been relatively minor, which could make for a very contentious debate after the bill is merged with the HELP committees and ultimately brought to the Senate floor for a vote.

While much of the action is in the Senate, House leaders are grappling over a shifting timeline and potentially eroding support for their bill.  Democratic leaders hoped to have the bill ready for consideration by the full House starting October 18. Deadlines have come and passed during this process and it is unknown whether the Democratic leaders can keep all their members unified behind the bill that AGC opposes. 

AGC remains concerned over employer mandates, the penalties for companies that cannot afford to provide health care, the uncertainties in coverage requirements, the affect on temporary and seasonal employees, the limitations on FSAs, HSAs and HRAs, and expanded COBRA mandates. AGC is also concerned that the exorbitant costs of the proposed plans will result in increased taxes on individuals and companies.  AGC supports reform that increases coverage, choice and competition in the marketplace. The inclusion of a public plan in the legislation will drive private insurers out of the market and the projected savings from the proposed legislation may never materialize, resulting in future tax increases.

Currently, the Senate Finance Committee is considering several amendments and will likely finish tomorrow. A vote will follow next week after a Congressional Budget Office analysis.

Click here to learn about the different health care proposals outlined by the Kaiser J. Family Foundation. Many of the details are still being decided and any final legislation would have to incorporate the different proposals.

After months of attempting to find common ground on a comprehensive health care reform bill, the Senate Finance Committee began their markup of the America's Healthy Future Act this week without any initial Republican support.  The goal of Democratic leaders was to finish the markup by the end of the week and begin the process of merging the bill with the version from the Senate Health, Education, Labor and Pensions Committee. However, senators have over 500 amendments to wade through and delays in receiving a final cost estimate from the non-partisan Congressional Budget Office appears to be a major hurdle in wrapping up the markup this week.

Democratic leaders remain committed to passing legislation later this fall and have threatened to pass the bill without Republican support if necessary. While three House committees passed their versions of the legislation out of committee in July, Democratic leaders appear to be waiting to see how the Senate progresses on reform. AGC opposes the House version of reform.

Details of the nearly $850 billion Senate Finance Committee draft are still being negotiated, but would impact many employers. The current draft would be financed by a 35 percent tax on premium plans (costing more than $8,00 for individuals, $21,000 for families), cuts to Medicare and Medicaid, and penalties on employers for employees that receive government subsidies for coverage. The legislation requires all individuals to be covered either through employers, individual plans or through a government plan. The current draft does not require employers to offer coverage, but companies with more than 50 full-time workers would have to pay fees for each employee that is eligible and receives government subsidies. The subsidies are only available to low-income individuals.

The legislation also contains tax credits for small employers to go toward purchasing health insurance. The credits are similar to other bills in that they provide a limited value and too few employers will qualify. However, the threshold for the tax credits may be raised through the amendment process.

Aspects of the bill that remain troubling to AGC are the failure of the legislation to address malpractice reform and the overly burdensome tax compliance changes that are unnecessary and will overwhelm many businesses.