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This Week in Health Reform—Federal Legislative Overview

BY Chad Levin | 11-23-2009 | 2:10 PM
This blog is written by a member of our blogging community and expresses that member's views alone.
Medicare Payroll in Senate Health Care Reform Legislation

Senate
Former President Bill Clinton visited Senate Democrats on
Capitol Hill this week, urging them to quickly pass health care reform
by the end of the year. Senate Leadership continues to work pulling its
final merged bill together and Majority Leader Harry Reid (D-NV) says
that he will introduce the legislation on the Senate floor the week of
November 16th.

Under Senate rules, a 60-vote majority is
required to move the bill forward before official debate can begin. It
is likely that Democrats will receive the 60-votes needed to move the
bill to the Senate floor, but it remains to be seen whether Reid has
the full 60 votes to overcome a filibuster for bill’s official passage.
Reid is still aiming to pass the legislation by the Christmas holiday.

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House
After
passing its health care reform legislation, the “Affordable Health Care
for America Act” (H.R. 3962), the House of Representatives was quiet
this week.

Overview: Medicare Payroll in Senate Health Care Reform Legislation

The
Senate’s health care reform legislation has still not yet been
unveiled, but there are reports that an analysis from the Congressional
Budget Office has found the bill to be more costly than expected, so
Senate Democrats are already considering new ways to pay for the bill.

One
of the options is an increase to the Medicare portion of the payroll
tax on individuals making $250,000 per year or more. Currently, workers
and employers each pay a 1.45 percent payroll tax for Medicare and the
new proposal would increase that to 2.5 percent payroll tax bracket for
those making $250,000 per year or more.

By including this new
approach, it would allow the Senate to either reduce or eliminate
altogether the controversial excise tax on “Cadillac” or high-cost
insurance plans, passed in the Senate Finance Committee’s bill last
month. Under legislation (S 1796) approved by the Senate Finance
Committee, individual insurance plans costing more than $8,000 and
family plans costing more than $21,000 would face a 40 percent excise
tax on any amount above that level.