After months of setbacks and uncertainty, House Democrats were jubilant as they unveiled their proposal to achieve a goal that has eluded presidents for six decades.
As of mid-afternoon, House Democratic leaders were still waiting for a cost estimate from the Congressional Budget Office.
President Obama, in a statement, praised what he termed “unprecedented cooperation to produce a health care reform proposal that will lower costs, provide better care for patients, and ensure fair treatment of consumers by the insurance industry.”
Republicans have asserted that the bill would raise taxes for millions of middle-income families. But Democrats said their proposal, which calls for a new surcharge or surtax, would affect “only 1.2 percent of all households in the United States.”
The surtax would apply at graduated rates ranging from 1 percent to 5.4 percent to families with annual adjusted gross incomes of more than $350,000 and individuals making more than $280,000.
Starting in 2011, a family making $500,000 would have to pay $1,500 of additional tax to help subsidize coverage for the uninsured. A family making $1 million would have to contribute $9,000. These taxes would rise significantly in 2013 if the federal government did not achieve specified savings in Medicare, Medicaid and other health programs.
On the other side of the Capitol, after more than three weeks of work, the Senate health committee was poised to become the first panel to approve comprehensive health legislation. But the Senate Finance Committee is still hunting for ways to pay for it all, and the chairman of the committee does not have the bipartisan support he has been seeking for months.
The House bill would create a new government-run health plan, starting in 2013, and would require employers to help pay for coverage of their workers.
An employer who does not provide health insurance to workers would generally have to pay a fee or penalty to the government equal to 8 percent of their wages, but there would be exceptions. For example, an employer with a payroll less than $250,000 a year would not have to pay any fee and could obtain tax credits to help defray the cost of coverage for its employees.
The fee or penalty would be equal to 2 percent of wages for a company with a payroll of $250,000 to $300,000; 4 percent of wages for an employer with payroll of $300,000 to $350,000; and 6 percent of wages for businesses with payroll of $350,000 to $400,000.
In a new report, the Congressional Budget Office said that such “pay-or-play requirements” could reduce the hiring of low-wage workers.
