On November 21, 2009, the U.S. Senate voted 60-39 on a cloture motion and to formally consider and debate the Patient Protection and Affordable Care Act (H.R.3590).  Senate moderates on Sunday threatened to scuttle the health care bill if their demands weren't met, frustrating rank-and-file Democrats who say their colleagues' views were out of step with American voters.

Differences with House Bill
Unlike the House bill, the Senate bill imposes a new payroll tax for individuals earning over $200,000 and taxes on insurance companies, drug companies and medical device manufacturers. Over the next decade, the bill would cost $848 billion, slightly less than the $1 trillion House measure. But much of those savings are realized because it would take effect in 2014, a year later than the House bill [source: AARP].

The Administrations View
This legislation meets the President’s criteria for health insurance reform: it provides stability and security to those with insurance; offers access to quality, affordable health care for those who do not have insurance; cuts costs for families, small businesses and the Government; and does so without adding a dime to the deficit. This legislation is the product of unprecedented cooperation and countless hours of hard work by Members of the Senate who share the President’s conviction that the Nation cannot wait another year for health insurance reform. They have forged a strong consensus that represents an historic step forward.” [source: Statement of Administration Policy, 11/20/09]

The Congressional Budget Office's View
According to the CBO, the provisions of H.R.3590 would cost $848 billion over 10 years (2010 - 2019), yield a net reduction to the Federal deficit of $130 billion over that time period, and extend insurance coverage to approximately 31 million eligible Americans.

However, such projections include provisions that would make changes to payment rates and rules for Medicare, Medicaid and other Federal programs.  In fact, the CBO estimates that such changes would reduce direct spending by about $491 billion over the 2010 - 2019 period.  With respect to the Medicare program, the CBO reports that the H.R. 3590 provisions that would result in the largest estimated budget savings include:

• Permanent reductions in the annual Medicare payment rate updates for most services in the fee-for-service sector (other than physicians' services), yielding savings of $192 billion over 10 years.
• Setting payment rates in the Medicare Advantage (MA) program on the basis of the average of bids submitted by MA plans in each market, yielding savings of $118 billion over 10 years.
• Reducing Medicare payments to hospitals that serve a large number of low-income patients (known as disproportionate share hospitals) by approximately $21 billion.
• Establishing an independent Medicare advisory board to recommend changes to limit Medicare's spending growth rate, which would reduce Medicare spending by $23 billion over 10 years.

You can read more at the CBO Blog.

Next Steps
Now that Senate has moved the bill to floor action, the Senate may approve the bill as received, reject it, ignore it, or change it.  Once the Senate approves the bill it will likely go conference committee to reconcile the differences between the House and Senate versions. If the conferees are unable to reach agreement both the House and Senate must approve the conference report.

After both the House and Senate have approved a bill in identical form, it is sent to the president. If the president approves of the legislation, he signs it and it becomes law. The only question that remains, can this all happen before Congress closes session on December 31st.

About the Author:

My name is Dana Cutter and I am Founder and Editor of Medicare Sherpa. Our staff spends their days searching the Internet for the best content and advice on retirement.  On our site you will find articles on Social Security, Medicare Benefits, Prescription Drug Benefits and more. Please feel fee to send me an email with ideas for content, site improvements or general help launching your online persona. I hope you will consider joining and I am looking forward to reading more about you online.

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