With a 220 to 215 vote, the House of Representatives approved the Affordable Health Care for America Act (HR 3962). Thirty-nine Democrats and 176 Republicans voted against the legislation, with Representative Joseph Cao being the only Republican to vote for the legislation. The CBO has "scored" this measure at a cost of $1.1 trillion over 10 years with a resulting reduction in the federal deficit of $104 billion. The measure did not address the projected 21 percent Medicare physician payment cut. A separate proposal, HR 3961, would allow a slight payment increase for 2010, and it would restructure the reimbursement formula on a long-term basis beginning in 2011. The CBO says that HR 3961 would increase mandatory spending by $210 billion through 2019.

Under insurance reform provisions that would go into effect in 2010, health insurers would be: no longer exempt from federal antitrust restrictions on price fixing and market allocation; prohibited from denying coverage based on pre-existing conditions; banned from placing lifetime caps on coverage; forbidden from rescinding policies once a person becomes sick; required to disclose and justify premium increases to regulators; and not allowed to remove adults younger than age 27 from parental coverage.

Provisions scheduled to go into effect in 2013 would require: individuals to purchase health insurance or pay a fine of as much as 2.5 percent of their incomes; employers with payrolls exceeding $500,000 to offer their employees coverage or pay a fine of 8 percent of their payrolls; Medicaid eligibility to be expanded to individuals and families with incomes up to 150 percent of the federal poverty level; and families with incomes up to 400 percent of the federal poverty level to be qualified for federal subsidies to purchase health insurance through an exchange.

HR 3962 would cut more than $400 billion from Medicare Advantage plans over the next ten years, and it would impose a 5.4 percent surcharge tax on incomes exceeding $500,000 for individuals and $1 million for couples. The measure also would levy a 2.5 percent excise tax on the sale or lease of medical devices.

Action now shifts to the Senate with the question of when floor deliberations will start. Senate Majority Leader Harry Reid has placed the House bill on the Senate calendar, and debate could begin as early as next Tuesday. In the meantime, Senator Reid has not yet released a final Senate bill as he still is waiting for the CBO cost analysis. If the majority party can garner the 60 votes needed to even allow the bill to be open for Senate floor action on the House bill, it is expected that the Senate version of reform legislation will be offered as a substitute amendment to have it become the Senate vehicle. However, there is a potential for further delay if the Senate bill is modified in reaction to the CBO scoring.