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House Panel Approves Sweeping Health Bill

Wall Street Journal Original article ›

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The House Energy and Commerce Committee passes ahealthcare plan with 31 to 28 vote. The Senate version takes adifferent approach. The Senate version has moved away from the employer requirements in the House bills. The Senate committee is moving towards aproposal to require employers to contribute if their workers are getting government assisted insurance coverage. It has also moved away from the surtax on the wealthy in the House bills which is expected to raise $500 billion. Instead the Senate version proposes an excise tax on insurers for health plans that offer generous benefits. Under the current bill being considered in the Senate such a insurance policy tax could raise $180 billion. The Senate Finance Committee is also different in that instead of the public insurance option it offers nonprofit health insurance cooperatives as an alternative. There is agreement between the two parties on anumber of things so the debate will center on the public insurance option, surtax on the wealthy to pay for the plan, and the requirement for an employer mandated coverage for all employees.

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The options to tax employer provided health insurance as income, to reduce tax breaks for mortgage deductions and charitable contributions for highend taxpayers, and to reduce Medicare payments, all have one common problem. Each group would like to preserve as much of the status quo as possible, and give up as least as possible.

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Finance industry lobbying, with $300 million alone spent to repeal the Glass Steagall Act which kept banks from getting involved in the securties business, is having the effect of making changes without the due diligence and care necessary for changing legislation that had deep reason embedded in experience during the Great Depression. Citigroup's failure is a result of its involvement in the securities business, and it was a principal backer for the repeal. Similar situation is playing out in the U.S. health-care area which has overtaken the finance industry in money spent for lobbying. Lobbying of this magnitude is having distortional effects on national priorities on necessary regulation, and on creating sustainable economical systems for health care in health care laws.

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