This month the U.S. House of Representatives made history voting for the first step in health care reform (HR 3962), the Affordable Health Care for America Act. Both of Southern Arizona’s representatives, Gabrielle Giffords and Raul Grijalva, voted in favor of the bill.

One of the key elements of the plan is that health insurance won’t be denied to those with pre-existing conditions. There would be guaranteed renewal and no annual or lifetime limits on coverage. Insurers would be prohibited from rescinding a patient’s policy when they file a claim for benefits except for fraud. The rationale for excessive increases in premiums would require documentation and review.

The bill would provide increases in funding for Community Health Centers such as El Rio in Tucson, doubling the number of patients the centers will see over the next five years.

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A Health Insurance Exchange Trust Fund would be established where individuals and small businesses can secure coverage from private or public options. The basic benefit plans would have a 70 percent actuarial benefit value.  Entities could offer enhanced and premium options through the exchange.

The plan would also extend coverage for young people up to their 27th birthday through their parents’ insurance if  parents chose to do this. Unemployed Americans would keep their COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits until the exchange was in place and they could access affordable coverage.

The bill would cover 36 million uninsured persons. It would require individuals to obtain acceptable coverage for themselves and their dependents by 2013. Failure to do so would invoke a 2.5 percent tax on the person’s modified adjusted gross income, with hardship and religious exemptions available.

Beginning in 2013, small businesses providing employee health coverage would be able to receive for a maximum of two years, tax credits equal to 50 percent of the amount paid by the employer for health coverage. The exception would be for employers with 10 to 25 employees or with average annual wages between $20,000 and $40,000.

Employers would be required to contribute at least 72.5 percent of coverage for full-time employees; employees who decline this coverage would have to contribute 8 percent of their salaries to the Health Insurance Exchange Trust Fund.

The employer non-compliance penalty would begin at 2 percent on wages for companies with annual payrolls of over $500,000, and gradually increase to 8 percent for those with payrolls exceeding $750,000.

To help pay for the health reform plan, there would be a 5.4 percent tax on modified adjusted gross income that exceeds a million for joint income tax filers, and a 5.4 percent tax on modified gross income exceeding $500,000 for single income tax filers.

According to the Center on Budget and Policy Priorities in Washington, D.C., the Medicare provisions in the bill passed by the House would “both strengthen Medicare’s financial footing and benefit more than 40 million seniors and people with disabilities whom Medicare covers.” This is important since it is expected that Medicare’s funds could run out in 2017.

There has been misleading criticism locally indicating there would be cuts to Medicare benefits. The bill makes no explicit reductions in Medicare benefits or cost-sharing increases. At the present time research has shown that Medicare Advantage, which provides private health care coverage, costs 14 percent more per beneficiary than it would via traditional Medicare. These over payments weaken Medicare’s long term finances and would be phased out over three years for a ten year savings of $154 billion..

So what happens next? The Senate has come up with its own version of a bill.

Each senator has the ability to filibuster to stall passage of a bill. It takes a super majority or 60 votes to overcome the filibuster.

Once the Senate passes a version of a bill, a conference committee comprised of members of both the House and Senate would work to reconcile the differences to bring about one bill. That legislation would then go back for approval from each body. Washington insiders believe that health care reform will be accomplished by the end of the calendar year.

Contact Carol West at cwwfoster@aol.com. West served on the Tucson City Council from 1999-2007 and before that worked as a council aide from 1987-1995.