House Democrats on Tuesday unveiled their health reform bill (HR 3200), which would create a surtax on high-income U.S. residents to partially offset the cost of expanding insurance coverage to 37 million more U.S. residents over the next 10 years. The bill, written by the chairs of the House Committees on Education and Labor, Energy and Commerce, and Ways and Means, would establish a government-sponsored public plan option designed to compete with private insurers through an insurance exchange.

The surtaxes would begin in 2011 and increase in 2013 if more money was needed to fund reform programs. Representative Kind said the tax rates would be 1% for U.S. residents whose incomes start at $350,000 annually, 2% for people whose incomes start at $500,000 annually and 3% on incomes of $1 million or more. The rates would increase to 2%, 3% and 4%, respectively, if necessary in 2013.

Under the legislation, employers who do not provide coverage to their workers would be required to pay the government a penalty of up to 8% of their payroll. Employers with payrolls at or under $250,000 annually would be exempt from health care contribution requirements.

Democrats on the Senate Health, Education, Labor and Pensions Committee on Wednesday passed a health reform bill without political consensus, after members voted 13-10 along party lines to approve the measure. The Committee is the first in Congress to pass a health care system overhaul bill. The measure will be combined with legislation from the Senate Finance Committee, which is still drafting its bill, before it is sent to the Senate floor for a vote.

One of the most contentious elements of the bill is the inclusion of a public health insurance plan option, which Republicans have called a deal breaker.

As this legislation continues to move forward, many of the provisions included in the draft bills will be extensively amended or eliminated as this process progresses. AASM will continue to closely monitor the legislation and will update members with the latest developments.