House, Senate Healthcare Bills Have Major Differences

The healthcare legislation released by the Senate's Democratic leaders Wednesday resembles a bill passed by the House of Representatives on Nov. 7 in many ways but there are some major differences between the two.

The Senate has yet to begin debate on its bill, which is likely to change during the amendment process. Here is a summary of some of the major differences between the proposed Senate bill and the House-passed legislation.

PUBLIC OPTION

Both bills would establish a new government insurance program to compete with private companies on proposed new state insurance exchanges. Under the Senate bill, states would be allowed to opt out of offering the federal health plan.

INDIVIDUAL MANDATES

Both the Senate and the House require most individuals to obtain health insurance. But the penalties on those who fail to get coverage are different.

The House would impose a 2.5 percent penalty tax on income up to the average cost of an insurance policy.

The Senate would phase in a maximum $750-per-adult annual penalty. A slightly higher penalty would be imposed for failure to obtain coverage for children.

EMPLOYER MANDATES

The House bill requires employers with payrolls above $750,000 to provide health insurance to workers. Those who fail to do so face a penalty of 8 percent of payroll. Employers with payrolls between $500,000 and $750,000 pay fines on a sliding scale of 2 percent, 4 percent and 6 percent of payroll.

The Senate bill has no employer mandate. But firms with more than 50 workers would have to pay a fine of $750 annually per worker if any of their employees obtain federally subsidized coverage on the exchange.

ABORTION

Both the Senate and the House bills bar the use of federal funds to finance abortion. The House bill contains tougher language that would require anyone seeking coverage for elective abortions to purchase separate insurance riders.

FINANCING

The biggest difference between the two bills is in the area of financing.

The House bill would impose a 5.4 percent surtax on individuals earning more than $500,000 a year and couples making more than $1 million. It also raises money by imposing a 2.5 percent excise tax on medical devices, by ending some tax breaks for multinational companies and by closing a biofuels tax loophole for paper companies.

The Senate bill includes a 40 percent excise tax on high- cost health insurance plans.

It also raises payroll taxes for Medicare, the government health insurance plan for the elderly, to 1.95 percent from the current 1.45 percent for individuals earning $200,000 or more and for couples earning $250,000 or more.

The Senate bill includes special fees on insurers, drug companies and medical device makers and it imposes a 5 percent tax on elective cosmetic surgery.