Three Health Reform Sticking Points That Worry House Democrats

Before leaving the White House following a meeting with President Obama on Wednesday, House Speaker Nancy Pelosi (D-CA) said at a briefing that there was "so much area of agreement" between the House and Senate healthcare reform bills. "I'd prefer to focus on that," she said. "The truth is that there is so much agreement in the bills, but sometimes we approach the issue differently."

House Democrats, who will officially reconvene next Tuesday in Washington following a four-week winter break, may not be so complacent about the areas of disagreement. With the Senate just squeezing out the 60 needed votes to advance its healthcare reform bill, many observers have been predicting that the Senate bill provisions will predominate in the reconciliation discussions.

However, 100-plus House Democrats, meeting through a caucus-wide telephone conference call on Thursday, are showing concerns about those particular items of disagreement in the bills that will have to be ironed out. While the public insurance option is expected to generate controversy—the House bill has a public option while the Senate does not—there are other sticking points arising that may take time to reconcile.

Here are several of them:

The "Cadillac" plan. In the bill (HR 3590) approved by the Senate Dec. 24, the so-called Cadillac plan, which would tax higher cost health plans, remained. The provision calls for a 40% tax for employer sponsored health coverage that exceeds $8,500 a year for individuals and $23,000 for families. The provision has received strong opposition from labor groups because numerous members had chosen higher cost plans over pay raises over the years.

The tax supporters have been pointing out that employers and employees would shift to less generous plans to avoid the tax—making patients more sensitive to costs and healthcare spending. But this is an argument that many House members are not buying at this time.

Rep. Joe Courtney (D-CT) has already gotten 190 other House Democrats to sign a letter that says they oppose the tax. During the caucus call, Reps. Peter Fazio (D-OR) and Carol Shea-Porter (D-NH) strongly expressed their disagreement with the plan to tax higher cost plans.

Insurance exchanges. The Senate bill calls for state exchanges whereby individuals could seek insurance coverage. However, the House—led by Rep. Henry Waxman (D-CA), chair of the House Energy and Commerce Committee—is advocating for a more uniform nation insurance exchange, which is called for in the House bill.

In addition, House members have been calling for tougher employer penalties for those who do not offer insurance. Under the House bill (HR 3962), large employers would be required to pay 8% of payroll into a health insurance exchange trust fund. In the Senate bill, though, those companies with 50 or more full time employees would pay $750 per employee if at least one employee obtains subsidized coverage through the exchange.

Financial assistance. Democrats in the House are expected to press for increased subsidies to obtain insurance for those lower income Americans who don't qualify for Medicaid. Currently, for individuals with low or moderate incomes above the poverty level, premium contributions are capped at no more than 1.5% of income, up through 400% of income. Under the Senate bill, families above the poverty level would contribute no more than 2% of income.