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WASHINGTON—The House Education and Labor Committee Friday approved sweeping health care reform legislation, joining the Ways and Means Committee, which cleared a similar measure a few hours earlier.
The Education and Labor bill was narrowly approved on a 26-22 vote, while the Ways and Means measure passed on a 23-18 vote. Three Democrats on each committee joined Republicans in voting against the legislation, H.R. 3200, which seeks to greatly reduce the number of uninsured.
On Wednesday, the Senate Health, Education, Labor and Pensions Committee also approved a reform bill on a 13-10 party-line vote.
“This is an exciting day in the history of this committee,” said Rep. Charles Rangel, D-N.Y., chairman of the Ways and Means Committee.
Rep. Dave Camp, R-Mich., criticized the bill, warning during the committee debate that it ultimately would result in a government takeover of the nation's health care system.
The House bills include coverage mandates for both employers and individuals. The bills are substantially similar, though certain tax provisions fall under the jurisdiction of the Ways and Means Committee.
Under the legislation, employers would have to pay 72.5% of the premium for individual coverage and 65% of the premium for family coverage. In addition, health care plan enrollees with individual coverage could not be required to pay more than $5,000 per year in out-of-pocket expenses, while such expenses would be capped at $10,000 for enrollees with family coverage.
Preventive services would have to be covered without any employee cost-sharing. In addition, employers could not restrict coverage for new employees with pre-existing medical conditions.
Most employers that fail to meet these requirements would be hit with a penalty equal to 8% of pay for each employee they did not offer coverage.
However, employers with an annual payroll of $250,000 or less would be completely exempt from offering coverage or paying an assessment. For employers with more than $250,000 in annual payroll, the penalty would begin at 2% of payroll, rising to the full 8% penalty for employers with annual payrolls above $400,000.
Individuals who did not enroll in a health care plan, except those who could demonstrate financial hardship, would be hit with new taxes based on their annual income.
The proposal, though, would provide federal health insurance premium subsidies for eligible individuals with adjusted annual gross incomes of up to 400% of the federal poverty level. It also would create state health insurance exchanges for individuals and small employers, as well as a new public plan. The exchanges, which would allow companies and individuals to shop for coverage from private insurers, eventually would be made available to large employers.
The measure would be funded in part by a new graduated surcharge on annual adjusted gross income exceeding $350,000 a year. For example, the surcharge would be 1% for families earning between $350,000 and $500,000 and 1.5% for those earning between $500,000 and $1 million.
Under a late addition to the bill, employees could not tap their flexible spending accounts, health reimbursement arrangements or health savings accounts to pay for reimbursement of over-the-counter drugs.