The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) have issued a preliminary analysis (pdf) of the Affordable Health Care for America Act (H.R. 3962), the new healthcare overhaul bill introduced on October 29, 2009. The CBO estimates that under this bill, approximately six million additional people would obtain health insurance coverage from their employers by the year 2019. In addition, the CBO estimated that by 2019, roughly 21 million people would purchase their own coverage through the new insurance “exchanges” created by the bill.

The nearly 2,000-page bill includes a less expansive public insurance option than the one set forth in the previous House healthcare legislation, the America’s Affordable Health Choices Act (H.R. 3200).  The less robust public option allows healthcare providers to negotiate reimbursement rates with the federal government. Like the previous bill, however, most large employers would be required to either offer their employees health insurance or contribute funds (in the form of an 8 percent payroll tax) on their behalf to help subsidize the coverage they would instead obtain through health insurance exchanges. Small employers (defined as businesses with annual payrolls not exceeding $750,000) would be expected to pay a smaller percentage, and those with annual payrolls of $500,000 or below would be exempt from this “pay or play” requirement. The CBO’s preliminary analysis estimates that penalty payments by employers under the pay or play system would amount to about $135 billion collected from 2010 through 2019.

In contrast, a similar preliminary analysis (pdf) of the main Senate healthcare bill under consideration, the America’s Healthy Future Act of 2009 (S. 1796) introduced by Sen. Max Baucus (D-Mont.), indicates that the number of people obtaining employer-provided insurance would actually decline. According to a summary of this analysis, “relative to currently projected levels, the number of people either purchasing individual coverage outside the exchanges or obtaining coverage through employers would decline by several million.” As with the House healthcare legislation, the Senate bill includes a mandate for most legal residents of the United States to obtain health insurance, and establishes health insurance “exchanges” through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage. Unlike the House bill, the Baucus bill does not contain the pay-or-play employer mandate to provide health insurance. This legislation does, however, require large employers (those with more than 50 employees) that do not provide health insurance benefits to pay a penalty for full-time workers who obtain subsidized coverage through health insurance exchanges. The CBO analysis estimates that from 2010-2019, these employer penalty payments would total $23 billion. In its current form, the Senate bill does not include a public health insurance option, although Sen. Harry Reid (D-Nev.) has stated that he intends to include a public option in some form in the final bill. The above legislation is being reconciled with the Affordable Health Choices Act (S. 1679) (pdf), the healthcare reform bill that has already cleared the Senate Health, Education, Labor and Pensions (HELP) Committee. The above analysis will necessarily change once a final Senate bill is unveiled.

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