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House Democratic leaders on October 29 unveiled the Affordable Health Care for America Bill (HR 3962), an $894-billion health care reform bill that raises the threshold for income levels subject to a new surtax on the wealthy. The measure also adds new revenue-raisers to make up for the change.

President Obama called the House bill a "critical milestone in the effort to reform our health care system." Obama, in a written statement, said the House measure includes "critical reforms to the insurance industry" and a public option that is offered in an exchange. He also noted that the House bill is fully paid for and will cut the deficit in the long term.

Details

The legislation updates and merges three bills approved by House committees in July, with the most significant changes coming in the form of changes in the payment structure of a government-run insurance option, allowing individuals to retain COBRA for a limited period, creating a high-risk insurance pool and barring insurers from canceling policies.

The measure raises revenue by imposing a 5.4-percent surtax on individuals with incomes over $500,000 and $1 million for married couples. The provision is expected to raise $460 billion. House leadership dropped earlier plans to impose a surtax on lower income thresholds of $280,000 for individuals and $350,000 for married couples, which would have raised $543 billion. The change and subsequent drop in revenue led lawmakers to add new revenue-raisers, including a corporate information-reporting provision that requires employers to inform the IRS of third-party payments and would raise an estimated $17 billion.

Lawmakers also added a new 2.5-percent surtax on the sale of some medical devices, which is estimated to raise $20 billion. A new $2,500 limit on employee contributions to health savings accounts is expected to raise approximately $13 billion.

The Congressional Budget Office estimates the bill would reduce the deficit by at least $30 billion over 10 years. The House is expected to take-up the measure during the week beginning November 9.

By Jeff Carlson and Paula Cruickshank, CCH News Staff

Affordable Health Care for America Act, HR 3962

House Press Release: Historic Bill to Provide Quality, Affordable Health Care for All Americans Heading to House Floor

Detailed Summary of the Affordable Health Care for America Act

Immediate Investments on the Road to Reform

Affordable Health Care for America Act --Section-by-Section Analysis

America's Affordable Health Choices Act --Implementation Timeline

Topline Changes from Introduced Bill to Blended Bill

Health Insurance Reform Side-by-Side Comparison

Top 10 Changes to Health Insurance Reform Bill

Top 14 Provisions That Take Effect Immediately

JCT Estimated Revenue Effects of Possible Modifications to the Revenue Provisions of HR 3962, the Affordable Health Care for America Act, JCX-43-09

White House Press Release: Statement from President Obama on the Affordable Health Care for America Act

Hoyer Statement on the Affordable Health Care for America Act

SFC Press Release: Questions and Answers Regarding Senator Grassley's Floor Speech Discussing Health Care Reform Plans' Tax Effects on Middle-Class Taxpayers