November 11, 2009 — On Saturday evening, November 7, the U.S. House of Representatives passed health-care-reform legislation by a vote of 220 to 215. House passage of the Affordable Health Care for America Act (HR 3962) represents a milestone in the national debate over health-care reform. Action now moves to the Senate, where Senator Lindsey Graham (R-SC) has declared the House bill “dead on arrival.”

While Senate Majority Leader Harry Reid’s office signaled that he will try to complete a health-care-reform bill this year, Capitol Hill insiders predict that the Senate debate will likely stretch into early 2010. In addition, if the Senate does pass a bill, it is likely to be drastically different from the one passed by the House, setting the stage for a contentious conference and forcing Democrats to rehash difficult fights over abortion and immigration in the context of health care.

According to ISSA Legislative Affairs Director Bill Balek, the Affordable Health Care for America Act passed by the House contains a number of provisions that do not bode well for the business community. The House bill includes a public option for health care (i.e., an option that allows individuals to purchase a government-run health-care plan) that would be financed largely by a surtax on business.

HR 3962 also includes a “pay or play” employer mandate that includes a new 8 percent payroll tax, limits employer flexibility in the design of employer-provided health plans, and does nothing to rein in excessive health-care spending. The costs associated with implementation of the health-care plan would be financed in large part by a $460.5 billion income-tax surcharge that will be especially burdensome for small and medium-size businesses.

In addition, the House bill has raised the ire of abortion-rights advocates. A last-minute deal forced House Speaker Nancy Pelosi to allow Rep. Bart Stupak (D-MI) a floor vote to add an amendment to the bill that imposes restrictions on federal abortion funding in statute for the first time.

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