House Democrats Post Health Bill With Controversial Public Option

The House Education and Labor Committee and the House Energy and Commerce Committee would also have to vote on the bill before it goes to the House floor. Backers of the bill aim to get the measure to those panels before July 31, when the House starts a month-long summer recess.

However, before a House floor vote members have raised various issues that must be dealt with.

A conservative Democratic group, the Blue Dog Health Care Task Force, said they want legislation that would reform the system so the growth in health care costs is held to the inflation rate.

"The Blue Dogs are committed to passing health care reform. However, reform that does not meet the president's goal of substantially bringing down costs is not an option," said a statement issued on behalf of the group by Rep. Mike Ross, D-Arkansas.

House Republicans asked the Democrats to slow action on their legislation.

Rep. John Kline, R-Minn., ranking minority member of the House Education and Labor Committee, said Democrats "should pull back from their arbitrary deadlines for voting on an overhaul of our nation's health care system and give members of Congress adequate time to fully assess the consequences of newly introduced legislation on jobs, small businesses and the quality of health care in America."

"Health care reform is far too important to rush through Congress in a few days or a few weeks," he said. "As the internal squabbles in the Democratic Party have demonstrated, this half-baked proposal is not going to deliver the common-sense, bipartisan health care solutions Americans need," he added.

The bill calls for an Internet-based health insurance exchange providing different options for choosing a health care provider in different geographic areas.

Under the bill, employers would be required to provide access to health insurance for their employees, or face an 8 percent tax of an employee's income. This would not apply to employers with payrolls of less than $250,000. For employers with payrolls of $250,000 to $400,000, the tax would rise incrementally from 2 percent to 6 percent.

Under another part of the legislation, the premium paid to insurers for providing the Medicare Advantage service would be phased out starting in 2011. In return for providing services through Medicare Advantage insurers who met certain standards would be paid "quality bonus payments" based on criteria for quality care established by the Department of Health and Human Services.

The bill would prohibit insurance companies from denying coverage based on pre-existing conditions, and would also require all Americans to obtain health insurance and impose a tax on those who fail to purchase health care coverage.

It would also scale back Medicare and Medicaid payments to hospitals and doctors.

The measure would place a 5.4 percent surtax on individuals and families with annual gross income exceeding $1 million.

Individuals and families with annual income between $500,000 and $1 million a year would be hit with a 1.5 percent surtax, and those making between $350,000 and $500,000 would face a 1 percent surtax.

According to several industry officials, the surtaxes for the last two categories would jump to 2 percent and 3 percent by 2013, unless the director of the White House Office of Management and Budget determines that other provisions of the bill have resulted in savings to the government of more than $150 billion.

But many of its key provisions, including the public insurance option, would take several years to kick in.

The public plan would pay health care providers 5 percent more than current Medicare rates. Under the legislation, the government would provide $2 billion in start-up funding.

The public plan, opposed by insurers and agents, would pay doctors and hospitals rates based on Medicare payment rates for its first three years.