Extended coverage and crackdown on insurance abuses

WHAT WAS BEING VOTED ON?

A: The House of Representatives voted legislation through that will extend healthcare coverage to 32 million Americans without it and crack down on insurance company abuses.

It caps a year-long quest by President Barack Obama and the Democrats to overhaul the country’s health system and reshape a sector that represents one sixth of the giant US economy.

Under the bill, health insurance will be extended to virtually all citizens, new taxes imposed on the wealthy and restrictive insurance practices such as refusing to cover people with pre-existing medical conditions barred.

The measure represents the biggest expansion of the social safety net since Medicare and Medicaid were enacted in 1965 during President Lyndon Johnson’s administration to provide government-funded health care coverage to the elderly and poor.

Under the legislation, most Americans would be required to buy insurance, and face penalties if they refused. Much of the money in the bill would be devoted to subsidies to help families at incomes of up to $88,000 (€65,000) a year pay their premiums.

The insurance industry would come under new federal regulation. They would be forbidden from placing lifetime dollar limits on policies, from denying coverage because of pre-existing conditions and from canceling policies when a policyholder becomes ill.

Parents would be able to keep children on their coverage up to the age of 26. A high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion ramps up even more.

Once enacted, the two bills would also create a series of so-called “insurance exchanges” beginning in 2014 where self-employed people and small businesses could pool together to shop for health care coverage.

HOW BIG A VICTORY IS THIS FOR PRESIDENT OBAMA?

A: Passage was a huge victory after a year of intense effort in which Obama put his own reputation on the line, often against the counsel of close advisers and members of his own party who wanted health care to take a back seat to efforts to improve the economy and generate jobs.

“This is the defining moment for the presidency,” said David Kendall, senior fellow for health and fiscal policy at the centrist Third Way think tank. “The thing that is fascinating to me is that what he’s managed to do in this is to unify the Democratic party on an issue that’s not just divided Democrats from Republicans, but divided Democrats from each other.”

The bill’s failure would have left the Democrats weakened and divided.

WILL IT HELP OBAMA WITH HIS OTHER AGENDA ITEMS?

A: Maybe.

Experts had said failure would cripple Obama’s presidency, and some Democrats who had not planned to back the revamp said they were swayed by concern that its failure – after more than a year of intense effort – could leave Obama unable to push through any major legislation. Obama’s approval ratings are hovering just below 50%.

The healthcare victory provides a resounding denunciation to critics who had termed him a ditherer with little to show for 14 months in office.

It could give him momentum on a range of other signature causes, including job creation bills, his proposed financial regulatory package, immigration reform and climate change.

WILL IT HELP THE DEMOCRATS RETAIN CONTROL OF THE US CONGRESS IN MID-TERM ELECTIONS IN NOVEMBER?

A: The party that holds the White House typically loses seats in Congress in the first election after a new president takes office.

But healthcare’s influence on the November election will depend on whether it works and how quickly voters start to feel an impact.

If Americans feel they are benefiting by election day, when more than a third of the Senate and every seat in the House will be up for grabs, it will be hard for Republicans to convince the public to vote against those who backed it. If voters do not feel benefits, the Democrats will have a harder time, especially if joblessness is still near 10%.