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US Senate, House Bills to Reform Health Care Have Major Differences

The House version includes a new government health insurance plan that would compete with private insurers, but the Senate bill has no such provision

Now that the U.S. Senate has passed its version of sweeping health care reform legislation, it will have to be merged with a bill that the House of Representatives approved last month.

Only after that happens can President Barack Obama sign it into law.

There are significant differences between the two measures that will have to be reconciled.

The most controversial difference is that the House version includes a new government health insurance plan that would compete with private insurers.  The Senate bill has no such provision -- Democratic leaders in the Senate abandoned the idea when some in their own party threatened to vote against the bill if it contained the so-called "public option."

There also is a big difference in how the two bills would be financed.

The Senate legislation would be paid for by fees on insurance companies, drug makers and medical device makers, as well as an increase in the payroll tax that workers pay for Medicare -- the government health insurance plan for the elderly.  The House version would impose a 5.4 percent surtax on people earning more than $500,000 a year, and it would levy a tax on the sale of medical devices.

Both bills prohibit the use of federal funds to finance abortion, and both would require most individuals to obtain health insurance.  They both impose a penalty on those who do not get coverage, but they offer subsidies for lower-income people to buy insurance.  The House bill requires employers of larger companies to provide health insurance to workers.  The Senate bill has no employer mandate.

Both place limits on how much profit insurance companies can make, and how much they can spend on administrative costs.  And both prohibit insurance companies from denying benefits to people based on pre-existing health conditions.

The Senate bill would extend health care coverage to about 94 percent of legal U.S. residents under the age of 65, and the House bill would cover 97 percent.  That compares to about 83 percent now.
 

Some information for this report was provided by AP, Reuters.

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