In an interview, Sen. Ben Nelson says Morgan Stanley believes the actual cost to the pharmaceutical industry on their deal with the White House is not $80 billion as reported, but only $20 billion.
"The Senate remains very unlikely to pass any bill containing an unbridled public plan that potentially could ultimately threaten significant price deflation for US sales," said Morgan Stanley pharmaceutical analyst Andrew Baum. "Any eventual healthcare reform is likely relatively benign to the pharmaceutical part of the healthcare value chain," Baum said in a note to clients.
In addition to the elimination of Medicare Advantage, which covers about 11 million seniors, the health care reform bill will also cut over $40 billion in Medicare on home care. These seniors will not be able to have the same health insurance plan and perhaps the same doctor as President Obama has promised.
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/05/AR2009120503235.html
By Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Sunday, December 6, 2009
Heading into a make-or-break week, Senate Democratic leaders are struggling to preserve the fragile support of interest groups for an overhaul of the nation's health-care system, even as lawmakers seek to change the carefully crafted provisions that brought the groups on board.
On the floor and behind closed doors, the Senate wrestled Saturday with amendments that would impose additional cost-control requirements on hospitals, doctors and drug companies, squeezing out savings beyond the considerable sums those groups had already volunteered to give up.
Of particular concern to seniors groups is an effort to strengthen a new independent board that would determine the future of Medicare, raising the possibility of cuts much deeper than those envisioned in the $848 billion health-care bill.
President Obama is scheduled to visit the Capitol on Sunday to rally Democrats to overcome lingering disputes, including the major flashpoints of abortion and a government-run insurance option. But other unresolved issues that have attracted less public attention pose a direct threat to deals cut by the White House months ago to appease the American Hospital Association, the Pharmaceutical Research and Manufacturers of America and other industry groups whose opposition proved lethal to President Bill Clinton's 1994 quest for health-care reform.
Although those agreements helped to clear a political path for reform to move forward, many Democrats view them as overly generous.
Hospital, drug concerns
Hospital groups, for example, are quietly steaming over a measure unveiled Friday by Sens. Joseph I. Lieberman (I-Conn.), Arlen Specter (D-Pa.) and Susan Collins (R-Maine), aimed at improving quality and lowering costs throughout the health-care system. One provision would impose stiff penalties on hospitals with high infection rates -- a top priority for Collins, who is being wooed by Majority Leader Harry M. Reid (Nev.) as a potential GOP convert.
Another pending amendment causing heartburn for Reid is a proposal by Sen. Byron L. Dorgan (D-N.D.) that would permit U.S. pharmacies and drug wholesalers to import lower-priced medications from other countries, including Canada. Drug reimportation is a popular bipartisan cause on Capitol Hill. As a senator, Obama supported an earlier version of the Dorgan bill, and White House Chief of Staff Rahm Emanuel was a leading advocate of drug reimportation when he served in the House.
A preliminary estimate by the nonpartisan Congressional Budget Office shows that the Dorgan amendment would save the government about $19 billion over 10 years -- and consumers, presumably, many billions more. But the drug industry has remained loyal to the White House since striking a deal this year to offer discounts worth $80 billion to Medicare patients in exchange for the promise of millions of new customers, and Dorgan expects some colleagues to take that relationship into account.
"The pharmaceutical industry has a lot of clout," he said. "My hope is the American people also have some support here in the chamber."
The drug industry would suffer another costly blow under an amendment by Sen. Bill Nelson (D-Fla.) that would transfer about 6 million seniors eligible for Medicare into the Medicaid program, which pays much lower prices for the same drugs. Under Nelson's amendment, half the $106 billion in savings would be used to close the coverage gap in the Medicare prescription drug program known as the "doughnut hole."
Closing the hole, meanwhile, is the top priority of the AARP, which has sent signals that it could turn against the Senate bill unless Nelson's effort succeeds. Though AARP has not endorsed the legislation, the group's assurances have helped to inoculate Democrats in recent days from Republican charges that nearly $500 billion in proposed Medicare cuts -- the bill's major source of financing -- would decimate services for seniors.
AARP vs. the board
The unusual clout of AARP makes the behind-the-scenes battle over the scope of an Independent Medicare Advisory Board particularly sensitive. The board, consisting of 15 health experts, would be empowered to rein in Medicare spending if costs continued to soar after 2014, and Congress would be required to approve the panel's recommendations or enact savings plans of its own.
Senior White House officials view the board as a critical component of health reform, the enforcement mechanism to guarantee that all the well-intentioned ideas for making hospitals and doctors more efficient translate into savings for the government. But AARP and other groups have fought to weaken or kill the board, arguing that its narrow focus on Medicare could irreparably damage the program. The House has rejected the idea of relinquishing congressional control over Medicare.
"You can't, in isolation, whack away at Medicare if the broader health system isn't able to control costs, either," said David Sloane, AARP's senior vice president for government relations.
AARP and the National Committee to Preserve Social Security and Medicare, a nonprofit led by former congresswoman Barbara Kennelly (D-Conn.), are working with about a dozen Democratic freshmen on an amendment that would expand the board's duties to cover the entire health-care system, though any recommendation affecting the private sector would be strictly advisory.
The White House and other lawmakers are pushing in the opposite direction. Sen. John D. Rockefeller IV (D-W.Va.), the board's original author, wants to strip out exemptions in the first decade for hospitals and other providers who have agreed to reductions in Medicare payments. Rockefeller said he is also considering an amendment to undo changes Reid made that could tie the board's hands after 2019.
Those changes would allow the board to act only if Medicare spending rose faster than overall health spending. An earlier version, written by Senate Budget Committee Chairman Kent Conrad (D-N.D.), would have let Medicare grow just a bit faster than the national economy, a more frugal standard.
Deficit hawks, skeptical of assertions that the health-care bill would not increase deficits, say the changes would gut the board. Reid's version leaves it "essentially toothless," said Robert L. Bixby, executive director of the nonprofit Concord Coalition, which promotes balanced budgets. "It basically means that if health-care costs are growing out of control, so can Medicare."
But the endorsement of Kennelly's group is contingent on keeping Reid's language.
"If we're growing faster than overall health-care spending, it's a legitimate thing to cut the program back. But if we're doing our job and we're more efficient than health care in the general economy, then we should not have Medicare being punished," said Maria Freese, Kennelly's chief lobbyist and policy director.
Sunday, December 6, 2009
Home Care Patients Worry Over Possible Cuts
http://www.nytimes.com/2009/12/05/health/policy/05home.html
By ROBERT PEAR
Published: December 4, 2009
CARIBOU, Me. — Dozing in a big lift chair, propped up by pillows in the living room of her modest home here, Bertha G. Milliard greeted the nurse who had come to check her condition and review the medications she takes for chronic pain, heart failure, stroke and dementia.
Ms. Milliard, 94, said those visits had been highly effective in keeping her out of the hospital. But the home care she receives could be altered under legislation passed by the House and pending on the Senate floor as Congress returned to work this week.
As they are across the nation, Medicare patients and nurses in this town in northern Maine are anxiously following the Congressional debate because its outcome could affect Medicare’s popular home health benefit in a big way. The legislation would reduce Medicare spending on home health services, a lifeline for homebound Medicare beneficiaries, which keeps them out of hospitals and nursing homes.
Under the bills, more than 30 million Americans would gain health coverage. The cost would be offset by new taxes and fees and by cutbacks in Medicare payments to health care providers.
The impact of the legislation on Medicare beneficiaries has been a pervasive theme in the first week of Senate debate, which is scheduled to continue through the weekend.
Home care shows, in microcosm, a conundrum at the heart of the health care debate. Lawmakers have decided that most of the money to cover the uninsured should come from the health care system itself. This raises the question: Can health care providers reduce costs without slashing services?
Under the legislation, home care would absorb a disproportionate share of the cuts. It currently accounts for 3.7 percent of the Medicare budget, but would absorb 10.2 percent of the savings squeezed from Medicare by the House bill and 9.4 percent of savings in the Senate bill, the Congressional Budget Office says.
The House bill would slice $55 billion over 10 years from projected Medicare spending on home health services, while the Senate bill would take $43 billion.
Democratic leaders in the House and Senate justify the proposed cuts in nearly identical terms. “These payment reductions will not adversely affect access to care,” but will bring payments in line with costs, the House Ways and Means Committee said. The Senate Finance Committee said the changes would encourage home care workers to be more productive.
The proposed cuts appear to be at odds with other provisions of the giant health care bills. A major goal of those bills is to reduce the readmission of Medicare patients to hospitals. Medicare patients say that is exactly what home care does.
“It helps me be independent,” said Mildred A. Carkin, 77, of Patten, Me., as a visiting nurse changed the dressing on a gaping wound in her right leg, a complication of knee replacement surgery. “It’s cheaper to care for us at home than to stick us in a nursing home or even a hospital.”
Delmer A. Wilcox, 89, of Caribou, lives alone, is losing his vision, uses a walker and has chronic diseases of the lungs, heart and kidneys. He said his condition would deteriorate quickly without the regular visits he received from Visiting Nurses of Aroostook, a unit of Eastern Maine Home Care.
The Aroostook County home care agency, which lost $190,000 on total revenues of $1.9 million in the year that ended Sept. 30, estimates that it would lose an additional $313,000 in the first year of the House bill and $237,000 under the Senate bill.
The prospect of such cuts has alarmed patients and home care workers. “We would have to consider shrinking the area we serve or discontinuing some services,” said Lisa Harvey-McPherson, who supervises the Aroostook agency as president of Eastern Maine Home Care.
“Our staff are scared,” Ms. Harvey-McPherson said, “but it’s our patients who will pay the price if Congress makes the cuts in home care.”
The four agencies under the umbrella of Eastern Maine Home Care cover a huge geographic area. Its nurses aim to see five patients a day, and they drive an average of 25 miles between patients, traversing potato fields and forests of spruce, birch and maple trees — and a few bear, moose and lynx. In winter, they may need a snowmobile, or even cross-country skis, to reach patients in remote areas.
President Obama has said that the savings in Medicare would be achieved by eliminating “waste and inefficiency” and that “nobody is talking about reducing Medicare benefits.” Moreover, he said, health care providers stand to benefit because they would gain tens of millions of new paying customers.
Home care executives question the arithmetic.
“No family or individual should ever go without health care coverage,” Ms. Harvey-McPherson said, as she drove up to a patient’s home here. “But an increase in the number of people with insurance would not necessarily help our agency because we depend so heavily on caring for seniors, with 80 to 90 percent of our home care revenue coming from Medicare.”
The impact on Medicare is a major concern for Maine’s senators, Susan Collins and Olympia J. Snowe, both Republicans being courted by the White House. Ms. Collins, a longtime champion of home care, has indicated she will resist the proposed cuts.
“Deep cuts to home health care would be completely counterproductive to our efforts to control overall health care costs,” Ms. Collins said. “Home care and hospice have consistently proven to be cost-effective and compassionate alternatives to institutional care.”
Private insurance companies often follow Medicare’s lead. So cuts in home-care payments could also jeopardize home care for privately insured patients like Christopher M. Hayes, a 35-year-old police officer in Presque Isle, Me. His left leg was crushed when he was struck by a car while jogging. He is learning to walk again with the help of a physical therapist.
In trying to slow the growth of Medicare, Democrats in Congress assume that health care providers can increase their productivity at the same pace as the overall economy.
But Saundra Scott-Adams, executive vice president of Eastern Maine Home Care, said: “That’s a joke for home health care. We provide one-on-one care.”
Her doubts are shared by Richard S. Foster, chief actuary of the federal Centers for Medicare and Medicaid Services. Mr. Foster said the health care industry was “very labor-intensive” and could probably not match the productivity gains of the overall economy.
While nurses can monitor some patients with electronic telecommunications devices, they said they still needed to provide hands-on care to many.
Phillip H. Moran, a 65-year-old diabetic in Houlton, Me., lost his right leg several years ago. His kidneys are failing. Without regular visits from a home health nurse, Mr. Moran said, he would be in danger of losing his other leg because of complications from diabetes. As a double amputee, he would be more likely to go into a nursing home.
“The nurses’ visits are really important,” Mr. Moran said. “If they are cut, it could cost people their lives.”
By ROBERT PEAR
Published: December 4, 2009
CARIBOU, Me. — Dozing in a big lift chair, propped up by pillows in the living room of her modest home here, Bertha G. Milliard greeted the nurse who had come to check her condition and review the medications she takes for chronic pain, heart failure, stroke and dementia.
Ms. Milliard, 94, said those visits had been highly effective in keeping her out of the hospital. But the home care she receives could be altered under legislation passed by the House and pending on the Senate floor as Congress returned to work this week.
As they are across the nation, Medicare patients and nurses in this town in northern Maine are anxiously following the Congressional debate because its outcome could affect Medicare’s popular home health benefit in a big way. The legislation would reduce Medicare spending on home health services, a lifeline for homebound Medicare beneficiaries, which keeps them out of hospitals and nursing homes.
Under the bills, more than 30 million Americans would gain health coverage. The cost would be offset by new taxes and fees and by cutbacks in Medicare payments to health care providers.
The impact of the legislation on Medicare beneficiaries has been a pervasive theme in the first week of Senate debate, which is scheduled to continue through the weekend.
Home care shows, in microcosm, a conundrum at the heart of the health care debate. Lawmakers have decided that most of the money to cover the uninsured should come from the health care system itself. This raises the question: Can health care providers reduce costs without slashing services?
Under the legislation, home care would absorb a disproportionate share of the cuts. It currently accounts for 3.7 percent of the Medicare budget, but would absorb 10.2 percent of the savings squeezed from Medicare by the House bill and 9.4 percent of savings in the Senate bill, the Congressional Budget Office says.
The House bill would slice $55 billion over 10 years from projected Medicare spending on home health services, while the Senate bill would take $43 billion.
Democratic leaders in the House and Senate justify the proposed cuts in nearly identical terms. “These payment reductions will not adversely affect access to care,” but will bring payments in line with costs, the House Ways and Means Committee said. The Senate Finance Committee said the changes would encourage home care workers to be more productive.
The proposed cuts appear to be at odds with other provisions of the giant health care bills. A major goal of those bills is to reduce the readmission of Medicare patients to hospitals. Medicare patients say that is exactly what home care does.
“It helps me be independent,” said Mildred A. Carkin, 77, of Patten, Me., as a visiting nurse changed the dressing on a gaping wound in her right leg, a complication of knee replacement surgery. “It’s cheaper to care for us at home than to stick us in a nursing home or even a hospital.”
Delmer A. Wilcox, 89, of Caribou, lives alone, is losing his vision, uses a walker and has chronic diseases of the lungs, heart and kidneys. He said his condition would deteriorate quickly without the regular visits he received from Visiting Nurses of Aroostook, a unit of Eastern Maine Home Care.
The Aroostook County home care agency, which lost $190,000 on total revenues of $1.9 million in the year that ended Sept. 30, estimates that it would lose an additional $313,000 in the first year of the House bill and $237,000 under the Senate bill.
The prospect of such cuts has alarmed patients and home care workers. “We would have to consider shrinking the area we serve or discontinuing some services,” said Lisa Harvey-McPherson, who supervises the Aroostook agency as president of Eastern Maine Home Care.
“Our staff are scared,” Ms. Harvey-McPherson said, “but it’s our patients who will pay the price if Congress makes the cuts in home care.”
The four agencies under the umbrella of Eastern Maine Home Care cover a huge geographic area. Its nurses aim to see five patients a day, and they drive an average of 25 miles between patients, traversing potato fields and forests of spruce, birch and maple trees — and a few bear, moose and lynx. In winter, they may need a snowmobile, or even cross-country skis, to reach patients in remote areas.
President Obama has said that the savings in Medicare would be achieved by eliminating “waste and inefficiency” and that “nobody is talking about reducing Medicare benefits.” Moreover, he said, health care providers stand to benefit because they would gain tens of millions of new paying customers.
Home care executives question the arithmetic.
“No family or individual should ever go without health care coverage,” Ms. Harvey-McPherson said, as she drove up to a patient’s home here. “But an increase in the number of people with insurance would not necessarily help our agency because we depend so heavily on caring for seniors, with 80 to 90 percent of our home care revenue coming from Medicare.”
The impact on Medicare is a major concern for Maine’s senators, Susan Collins and Olympia J. Snowe, both Republicans being courted by the White House. Ms. Collins, a longtime champion of home care, has indicated she will resist the proposed cuts.
“Deep cuts to home health care would be completely counterproductive to our efforts to control overall health care costs,” Ms. Collins said. “Home care and hospice have consistently proven to be cost-effective and compassionate alternatives to institutional care.”
Private insurance companies often follow Medicare’s lead. So cuts in home-care payments could also jeopardize home care for privately insured patients like Christopher M. Hayes, a 35-year-old police officer in Presque Isle, Me. His left leg was crushed when he was struck by a car while jogging. He is learning to walk again with the help of a physical therapist.
In trying to slow the growth of Medicare, Democrats in Congress assume that health care providers can increase their productivity at the same pace as the overall economy.
But Saundra Scott-Adams, executive vice president of Eastern Maine Home Care, said: “That’s a joke for home health care. We provide one-on-one care.”
Her doubts are shared by Richard S. Foster, chief actuary of the federal Centers for Medicare and Medicaid Services. Mr. Foster said the health care industry was “very labor-intensive” and could probably not match the productivity gains of the overall economy.
While nurses can monitor some patients with electronic telecommunications devices, they said they still needed to provide hands-on care to many.
Phillip H. Moran, a 65-year-old diabetic in Houlton, Me., lost his right leg several years ago. His kidneys are failing. Without regular visits from a home health nurse, Mr. Moran said, he would be in danger of losing his other leg because of complications from diabetes. As a double amputee, he would be more likely to go into a nursing home.
“The nurses’ visits are really important,” Mr. Moran said. “If they are cut, it could cost people their lives.”
Saturday, December 5, 2009
Side by Side Comparison between House and Senate Healthcare Bills
Here is a very comprehensive side by side comparison between the two health care bills in the House (H.R. 3962) and the Senate (H.R. 3590), from the Kaiser Family Foundation, not affiliated with the Kaiser Permanente Medical Group:
http://www.kff.org/healthreform/upload/housesenatebill_final.pdf
http://www.kff.org/healthreform/upload/housesenatebill_final.pdf
Friday, December 4, 2009
Energy Incentives for Individuals in the American Recovery and Reinvestment Act
http://www.irs.gov/newsroom/article/0,,id=206875,00.html
Audio File for Podcast: Energy Tax Credits
The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals to invest in energy-efficient products.
Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.
The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit. The IRS has issued Notice 2009-53 that will allow manufacturers to certify that their products meet these new standards.
Until the guidance is released, homeowners generally may continue to rely on manufacturers’ certifications that were provided under the old guidance. For exterior windows and skylights, homeowners may continue to rely on Energy Star labels in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.
Residential Energy Efficient Property Credit (Section 1122): This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. See Notice 2009-41.
Plug-in Electric Drive Vehicle Credit (Section 1141): The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer's vehicles after the manufacturer has sold at least 200,000 vehicles.
Plug-In Electric Vehicle Credit (Section 1142): The new law also creates a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable. For more information see: Questions and Answers, IR-2009-44, Notice 2009-54 and Notice 2009-58.
Conversion Kits (Section 1143): The new law also provided a tax credit for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.
Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144): Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.
Questions and Answers
If you have questions about the energy incentives for individuals, these questions and answers might help.
Related Items:
Audio File for Podcast: Energy Tax Credits
The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals to invest in energy-efficient products.
Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.
The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit. The IRS has issued Notice 2009-53 that will allow manufacturers to certify that their products meet these new standards.
Until the guidance is released, homeowners generally may continue to rely on manufacturers’ certifications that were provided under the old guidance. For exterior windows and skylights, homeowners may continue to rely on Energy Star labels in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.
Residential Energy Efficient Property Credit (Section 1122): This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. See Notice 2009-41.
Plug-in Electric Drive Vehicle Credit (Section 1141): The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer's vehicles after the manufacturer has sold at least 200,000 vehicles.
Plug-In Electric Vehicle Credit (Section 1142): The new law also creates a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable. For more information see: Questions and Answers, IR-2009-44, Notice 2009-54 and Notice 2009-58.
Conversion Kits (Section 1143): The new law also provided a tax credit for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.
Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144): Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.
Questions and Answers
If you have questions about the energy incentives for individuals, these questions and answers might help.
Related Items:
- IR-2009-44, Energy-Saving Steps This Year May Result in Tax Savings Next Year
- Fact Sheet 2009-10, Energy Provisions of the American Recovery and Reinvestment Act of 2009
- Energy Incentives for Businesses in the American Recovery and Reinvestment Act
- U.S. Department of Energy Energystar Web site
- The American Recovery and Reinvestment Act of 2009: Information Center
IRS Lowers Standard Mileage Rates
http://www.webcpa.com/news/IRS-Lowers-Standard-Mileage-Rates-52602-1.html
The Internal Revenue Service has issued its 2010 optional standard mileage rates for calculating the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The rates for business, medical and moving purposes are slightly lower than last year’s rates, reflecting generally lower transportation costs.
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car, van, pickup truck or panel truck will be:
• 50 cents per mile for business purposes;
• 16.5 cents per mile for medical or moving purposes; and,
• 14 cents per mile in service of charitable organizations.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.
Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Revenue Procedure 2009-54 contains additional details on the standard mileage rates.
The Internal Revenue Service has issued its 2010 optional standard mileage rates for calculating the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The rates for business, medical and moving purposes are slightly lower than last year’s rates, reflecting generally lower transportation costs.
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car, van, pickup truck or panel truck will be:
• 50 cents per mile for business purposes;
• 16.5 cents per mile for medical or moving purposes; and,
• 14 cents per mile in service of charitable organizations.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.
Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Revenue Procedure 2009-54 contains additional details on the standard mileage rates.
Thursday, December 3, 2009
House to Consider Estate Tax; Senate to Begin Long Health Reform Debate
http://www.bnasoftware.com/News_Articles/News/House_to_Consider_Estate_Tax;_Senate_to_Begin_Long_Health_Reform_Debate.asp
By Mack A. Paschal
Publication date: 11/30/2009
The House is scheduled to debate and vote on legislation making the 2009 estate tax levels permanent, as the Senate begins in earnest a lengthy debate on a massive health care reform bill (H.R. 3590) during the Nov. 30 legislative week.
Following a week-long Thanksgiving recess, both chambers return to Capitol Hill with loaded agendas. The Senate returns to work Nov. 30 and the House will follow a day later on Dec. 1.
House Majority Leader Steny Hoyer (D-Md.) made it official Nov. 25 that House members can expect to vote on an estate tax bill (H.R. 4154) that would extend the current rate of 45 percent, rather than allow the rate to fall to zero in 2010 and then rebound to 55 percent in 2011 as would happen under current law.
The exemption levels in the bill, sponsored by Rep. Earl Pomeroy (D-N.D.), also would remain at 2009 levels, providing individuals with a $3.5 million exemption and couples with a $7 million exemption.
The bill could be considered on the House floor by Dec. 3, according the House schedule for the upcoming legislative week. The House Rules Committee is expected to meet by Dec. 2 to formulate a rule for floor debate of the bill.
House Has Reform Bills on Agenda
In addition to the estate tax bill, the House leadership plans to consider some financial regulatory reform measures earlier in the Nov. 30 week.
When the chamber reconvenes Dec. 1 at 2 p.m., members can expect to consider seven measures under suspension of the rules. They include a bill (H.R. 3029) to establish a research, development, and technology demonstration program to improve the efficiency of gas turbines used in combined cycle power generation systems and legislation (H.R. 3598) that would assist the Department of Energy in promoting energy efficient technologies that increase water use efficiency. Votes on legislation considered under suspension of the rules must pass by a two-thirds majority vote. Any requests for recorded votes on the legislation will occur after 6:30 p.m.
The House meets Dec. 2 and 3 at 10 a.m. each day for legislative business. On Dec. 2, the chamber will consider at least 10 more pieces of legislation, including a bill (H.R. 1242) that would amend the Emergency Economic Stabilization Act of 2008 to provide for additional monitoring and accountability of the Troubled Assets Relief Program.
Also on Dec. 2, the House leadership has scheduled legislation (H.R. 2873) that would give the Securities and Exchange Commission more enforcement authority. Members also will consider a resolution (H. Con. Res. 197) that would encourage banks and mortgage servicers to work with families affected by contaminated drywall to allow temporary forbearance without penalty on payments on their home mortgages.
The chamber likely will consider the estate tax measure on Dec. 3.
Health Care Debate Looms
Senators are preparing for a debate on health care reform that could last up to at least the projected Dec. 18 adjournment target for the First Session, if not longer.
The Senate reconvenes Nov. 30 at 2 p.m. At 3 p.m., the Senate resumes consideration of H.R. 3590, the legislative vehicle for the Senate Democratic reform bill, offered by Senate Majority Leader Harry Reid (D-Nev.).
Prior to the recess, the bill overcame a major hurdle, achieving the 60 votes needed to advance the measure for debate on the Senate floor. The vote of 60-39 taken the Saturday before the congressional recess was strictly along party lines. This action will allow senators to begin offering amendments to the legislation during the upcoming debate.
Currently pending is a substitute amendment offered by Reid. However, when the chamber reconvenes, both Reid and Senate Minority Leader Mitch McConnell (R-Ky.) will be allowed to offer amendments. There will be no roll call votes on Nov. 30.
The House passed its health reform package Nov. 7 (H.R. 3962) on a party line 220-215 vote.
Appropriations Update
The Senate also could consider, on a dual path, unfinished fiscal 2010 appropriations legislation. Prior to adjourning, the Senate completed work on its ninth spending bill, the military construction-Department of Veterans Affairs appropriations bill (H.R. 3082).
With only five of the 12 regular appropriations bills signed into law, most of the federal government programs are operating under a continuing resolution through Dec. 18.
Four of the remaining bills are awaiting conference committee action.
Meanwhile, congressional committees have scheduled hearings on a variety of topics, including the Bernanke nomination, financial stability, internet gambling, over-the-counter derivatives, and transportation issues.
Climate Change Meetings
Lisa Jackson, administrator of the Environmental Protection Agency, is scheduled to testify at a Dec. 2 hearing before a joint hearing of the Senate Environment Committee and its Subcommittee on Superfund, Toxics, and Environmental Health. The 2:30 p.m. meeting will examine the Federal Toxic Substances Control Act, which gives EPA the authority to require reporting, recordkeeping and testing requirements, and restrictions relating to chemical substances and/or mixtures.
The Senate Energy Committee will meet Dec. 2 to discuss policy options for reducing greenhouse gas emissions.
Transportation Issues
The Senate Commerce Committee has scheduled a Dec. 2 hearing on transportation security challenges since Sept. 11, 2001.
Stimulus tracking will be discussed at a Dec. 2 hearing by a House Transportation subcommittee. The hearing will focus on issues surrounding the building of border stations by the General Services Administration.
Aviation safety, focusing on pilot fatigue, will be the topic of a Dec. 1 hearing before a Senate Commerce subcommittee.
Issues Regarding Bankruptcy
The Senate Judiciary Committee again will attempt to mark up a bill (S. 1624) that would provide leniency to homeowners facing bankruptcy due to a catastrophic illness or serious medical problems.
A House Judiciary panel has scheduled a Dec. 3 hearing on protecting employees in airline bankruptcies.
The Subcommittee on Health, Employment, Labor, and Pensions of the House Education and Labor Committee Dec. 2 is scheduled to examine the impact of the Delphi bankruptcy on workers and retirees.
The complete text of this article can be found in the BNA Daily Tax Report, November 30, 2009. For comprehensive coverage of taxation, pension, budget, and accounting issues, sign up for a free trial or subscribe to the BNA Daily Tax Report today. Learn more »
© 2009, The Bureau of National Affairs, Inc.
By Mack A. Paschal
Publication date: 11/30/2009
The House is scheduled to debate and vote on legislation making the 2009 estate tax levels permanent, as the Senate begins in earnest a lengthy debate on a massive health care reform bill (H.R. 3590) during the Nov. 30 legislative week.
Following a week-long Thanksgiving recess, both chambers return to Capitol Hill with loaded agendas. The Senate returns to work Nov. 30 and the House will follow a day later on Dec. 1.
House Majority Leader Steny Hoyer (D-Md.) made it official Nov. 25 that House members can expect to vote on an estate tax bill (H.R. 4154) that would extend the current rate of 45 percent, rather than allow the rate to fall to zero in 2010 and then rebound to 55 percent in 2011 as would happen under current law.
The exemption levels in the bill, sponsored by Rep. Earl Pomeroy (D-N.D.), also would remain at 2009 levels, providing individuals with a $3.5 million exemption and couples with a $7 million exemption.
The bill could be considered on the House floor by Dec. 3, according the House schedule for the upcoming legislative week. The House Rules Committee is expected to meet by Dec. 2 to formulate a rule for floor debate of the bill.
House Has Reform Bills on Agenda
In addition to the estate tax bill, the House leadership plans to consider some financial regulatory reform measures earlier in the Nov. 30 week.
When the chamber reconvenes Dec. 1 at 2 p.m., members can expect to consider seven measures under suspension of the rules. They include a bill (H.R. 3029) to establish a research, development, and technology demonstration program to improve the efficiency of gas turbines used in combined cycle power generation systems and legislation (H.R. 3598) that would assist the Department of Energy in promoting energy efficient technologies that increase water use efficiency. Votes on legislation considered under suspension of the rules must pass by a two-thirds majority vote. Any requests for recorded votes on the legislation will occur after 6:30 p.m.
The House meets Dec. 2 and 3 at 10 a.m. each day for legislative business. On Dec. 2, the chamber will consider at least 10 more pieces of legislation, including a bill (H.R. 1242) that would amend the Emergency Economic Stabilization Act of 2008 to provide for additional monitoring and accountability of the Troubled Assets Relief Program.
Also on Dec. 2, the House leadership has scheduled legislation (H.R. 2873) that would give the Securities and Exchange Commission more enforcement authority. Members also will consider a resolution (H. Con. Res. 197) that would encourage banks and mortgage servicers to work with families affected by contaminated drywall to allow temporary forbearance without penalty on payments on their home mortgages.
The chamber likely will consider the estate tax measure on Dec. 3.
Health Care Debate Looms
Senators are preparing for a debate on health care reform that could last up to at least the projected Dec. 18 adjournment target for the First Session, if not longer.
The Senate reconvenes Nov. 30 at 2 p.m. At 3 p.m., the Senate resumes consideration of H.R. 3590, the legislative vehicle for the Senate Democratic reform bill, offered by Senate Majority Leader Harry Reid (D-Nev.).
Prior to the recess, the bill overcame a major hurdle, achieving the 60 votes needed to advance the measure for debate on the Senate floor. The vote of 60-39 taken the Saturday before the congressional recess was strictly along party lines. This action will allow senators to begin offering amendments to the legislation during the upcoming debate.
Currently pending is a substitute amendment offered by Reid. However, when the chamber reconvenes, both Reid and Senate Minority Leader Mitch McConnell (R-Ky.) will be allowed to offer amendments. There will be no roll call votes on Nov. 30.
The House passed its health reform package Nov. 7 (H.R. 3962) on a party line 220-215 vote.
Appropriations Update
The Senate also could consider, on a dual path, unfinished fiscal 2010 appropriations legislation. Prior to adjourning, the Senate completed work on its ninth spending bill, the military construction-Department of Veterans Affairs appropriations bill (H.R. 3082).
With only five of the 12 regular appropriations bills signed into law, most of the federal government programs are operating under a continuing resolution through Dec. 18.
Four of the remaining bills are awaiting conference committee action.
Meanwhile, congressional committees have scheduled hearings on a variety of topics, including the Bernanke nomination, financial stability, internet gambling, over-the-counter derivatives, and transportation issues.
Climate Change Meetings
Lisa Jackson, administrator of the Environmental Protection Agency, is scheduled to testify at a Dec. 2 hearing before a joint hearing of the Senate Environment Committee and its Subcommittee on Superfund, Toxics, and Environmental Health. The 2:30 p.m. meeting will examine the Federal Toxic Substances Control Act, which gives EPA the authority to require reporting, recordkeeping and testing requirements, and restrictions relating to chemical substances and/or mixtures.
The Senate Energy Committee will meet Dec. 2 to discuss policy options for reducing greenhouse gas emissions.
Transportation Issues
The Senate Commerce Committee has scheduled a Dec. 2 hearing on transportation security challenges since Sept. 11, 2001.
Stimulus tracking will be discussed at a Dec. 2 hearing by a House Transportation subcommittee. The hearing will focus on issues surrounding the building of border stations by the General Services Administration.
Aviation safety, focusing on pilot fatigue, will be the topic of a Dec. 1 hearing before a Senate Commerce subcommittee.
Issues Regarding Bankruptcy
The Senate Judiciary Committee again will attempt to mark up a bill (S. 1624) that would provide leniency to homeowners facing bankruptcy due to a catastrophic illness or serious medical problems.
A House Judiciary panel has scheduled a Dec. 3 hearing on protecting employees in airline bankruptcies.
The Subcommittee on Health, Employment, Labor, and Pensions of the House Education and Labor Committee Dec. 2 is scheduled to examine the impact of the Delphi bankruptcy on workers and retirees.
The complete text of this article can be found in the BNA Daily Tax Report, November 30, 2009. For comprehensive coverage of taxation, pension, budget, and accounting issues, sign up for a free trial or subscribe to the BNA Daily Tax Report today. Learn more »
© 2009, The Bureau of National Affairs, Inc.
Monday, November 30, 2009
California cap in malpractice cases an issue
http://www.sacbee.com/capitolandcalifornia/story/2357268.html
By Dan Walters
dwalters@sacbee.com
One of the many contentious issues in the national health care debate is something that began 34 years ago in California when Jerry Brown, in the first year of his first governorship, signed legislation imposing a $250,000 limit on pain and suffering damages in medical malpractice cases.
The version of a national health care bill that Speaker Nancy Pelosi pushed through the House contains a provision that would push – but not quite compel – California and other states with malpractice damage caps to repeal them.
A little history: During the mid-1970s, insurance premiums for malpractice insurance skyrocketed in response to some big damage judgments. They rose so high that many doctors threatened to leave the state, or abandon specialized practices, particularly obstetrics. At one point, doctors' wives staged a sleep-in protest in Brown's outer office, albeit with the fashionably dressed demonstrators sleeping in down sleeping bags and noshing on catered meals.
Brown and the Legislature responded with the Medical Injury Compensation Reform Act (MICRA), imposing the $250,000 limit on "noneconomic" damages, which had been the form of the big malpractice verdicts, despite opposition from lawyers who represented plaintiffs in the personal injury suits and collected percentages of the damages as their fees.
MICRA's enactment had three effects: materially lowering malpractice insurance costs, encouraging 30-plus states to enact limits of their own, and igniting a decades-long war in the California Legislature between trial lawyers and medical care providers, backed by insurers.
The lawyers have made several high-powered efforts to repeal or modify the cap in California, contending that injured patients were being denied fair compensation. But they failed even when their bills were carried by speakers of the state Assembly.
The law, however, has been a full-employment act for lobbyists for rival factions and has generated many millions of dollars in campaign contributions.
Advocates of the cap contend that if President Barack Obama and Congress are serious about reining in medical costs, they'll make it part of national health care. The Congressional Budget Office, in fact, says such a cap would save $54 billion in health care costs over a decade, and other estimates are higher.
Obama has been noncommittal, but Pelosi and other Democratic leaders of Congress, as a gesture toward the national trial lawyer lobby, included a provision in their bill that would give "incentive payments" to states that establish a "fair resolution" process for malpractice claims but only if a state "does not limit attorneys' fees or impose caps on damages."
It's likely to be a major issue when House and Senate leaders try to iron out a compromise bill, and if it survives, Brown, who aspires to return to the governorship in 2010, may have to decide whether the cap he supported in 1975 will be repealed.
By Dan Walters
dwalters@sacbee.com
One of the many contentious issues in the national health care debate is something that began 34 years ago in California when Jerry Brown, in the first year of his first governorship, signed legislation imposing a $250,000 limit on pain and suffering damages in medical malpractice cases.
The version of a national health care bill that Speaker Nancy Pelosi pushed through the House contains a provision that would push – but not quite compel – California and other states with malpractice damage caps to repeal them.
A little history: During the mid-1970s, insurance premiums for malpractice insurance skyrocketed in response to some big damage judgments. They rose so high that many doctors threatened to leave the state, or abandon specialized practices, particularly obstetrics. At one point, doctors' wives staged a sleep-in protest in Brown's outer office, albeit with the fashionably dressed demonstrators sleeping in down sleeping bags and noshing on catered meals.
Brown and the Legislature responded with the Medical Injury Compensation Reform Act (MICRA), imposing the $250,000 limit on "noneconomic" damages, which had been the form of the big malpractice verdicts, despite opposition from lawyers who represented plaintiffs in the personal injury suits and collected percentages of the damages as their fees.
MICRA's enactment had three effects: materially lowering malpractice insurance costs, encouraging 30-plus states to enact limits of their own, and igniting a decades-long war in the California Legislature between trial lawyers and medical care providers, backed by insurers.
The lawyers have made several high-powered efforts to repeal or modify the cap in California, contending that injured patients were being denied fair compensation. But they failed even when their bills were carried by speakers of the state Assembly.
The law, however, has been a full-employment act for lobbyists for rival factions and has generated many millions of dollars in campaign contributions.
Advocates of the cap contend that if President Barack Obama and Congress are serious about reining in medical costs, they'll make it part of national health care. The Congressional Budget Office, in fact, says such a cap would save $54 billion in health care costs over a decade, and other estimates are higher.
Obama has been noncommittal, but Pelosi and other Democratic leaders of Congress, as a gesture toward the national trial lawyer lobby, included a provision in their bill that would give "incentive payments" to states that establish a "fair resolution" process for malpractice claims but only if a state "does not limit attorneys' fees or impose caps on damages."
It's likely to be a major issue when House and Senate leaders try to iron out a compromise bill, and if it survives, Brown, who aspires to return to the governorship in 2010, may have to decide whether the cap he supported in 1975 will be repealed.
Wednesday, November 25, 2009
Retirement news from the IRS
Here is a publication from the IRS called "Retirement News for Employers". However, it has excellent info for everyone.
http://www.irs.gov/pub/irs-tege/rne_fall09.pdf
http://www.irs.gov/pub/irs-tege/rne_fall09.pdf
Saturday, November 21, 2009
FAQ: guide to health care reform
http://news.yahoo.com/s/ynews/20091121/ts_ynews/ynews_ts992
If you've recently found yourself wondering, "What the heck is going on with the health care reform debate?", you're not alone. The American legislative process is unwieldy, and never more so than in the United States Senate. Now that the Senate voted Saturday to move its bill to a full debate, some big hurdles remain.
Because we think you may have some of the same questions we did, and the bill being discussed would constitute one of the most consequential reforms in a generation if passed, we thought we'd put together a quick primer on what to expect in the weeks to come.
So, what exactly happened Saturday?
Saturday night at 8 p.m. ET, Senate Majority Leader Harry Reid brought his proposed bill to the floor of the Senate for a procedural vote to kick off a full debate and amendment process. To get things started, he needed 60 votes for a "motion to proceed." He got them.
The big suspense was over whether or not the bill would be successfully filibustered by opponents who wanted to stop the bill from moving forward.
What the heck is a filibuster?
Saturday night's "motion to proceed" vote was the first time the process could be stopped by a filibuster. There are two more times remaining.
With a filibuster, Republicans can prevent a vote by extending debate indefinitely by, for example, reading Sarah Palin's new book over and over and over again and refusing to stop. To bypass a hypothetical "Going Rogue" loop, Harry Reid needs 60 senators to vote to end any filibuster. This is called a "cloture" vote.
After Saturday, opponents will get their next chance to filibuster when the Senate votes to end full debate and send the bill to its final phase.
Who would filibuster and why?
Excluding the outside possibility that Olympia Snowe would break ranks, all 40 Republicans would likely support a filibuster. So, to prevent Democrats from getting the 60 votes necessary to break one, only one Democrat or independent would need to defect.
The most likely suspects for this are independent Joe Lieberman and conservative Democrats Mary Landrieu, Ben Nelson, and Blanche Lincoln. Recent speculation has focused on Lincoln, who faces low approval numbers in conservative Arkansas and an upcoming re-election bid in 2010. Nelson and Landrieu are also both from conservative states, though neither is up for re-election in 2010. Lieberman is not up for re-election and is from more liberal Connecticut, but may be influenced by the large insurance industry presence in his state.
What happens if the Senate does pass a bill?
After weeks of speeches and amendments and filibuster threats, if the Senate passes a bill, it moves on to a "conference committee." Here, members of both the House and the Senate will negotiate over the final details while trying to merge the bill passed by the House with the bill passed by the Senate.
All the hot-button issues will be on the table. If the Senate passes a bill without a "Public Option" it will need to be debated again. Many House Democrats want the controversial Stupak Amendment, which bans funding or subsidies for any insurance plan that funds abortion, removed in conference.
If these issues are ironed out, the committee will create a "conference report," or final bill, that will need to be passed yet again by both the House and the Senate. Yet again this vote in the Senate can be filibustered, so any ''conference report'' will need the support of 60 senators one last time.
If the "conference report" is passed in both houses of Congress, it will be sent to President Obama's desk for his likely signature.
When will all of this be over?
Up until last week, few people thought that this process could be completed by the end of the year. But the Senate Democrat's bill recently received positive feedback from the Congressional Budget Office, the nonpartisan federal agency that advises Congress on financial matters. This has led some political observers to think that maybe, just maybe, Americans will know whether or not their country's health care system will be dramatically overhauled in time for the holidays.
-- Thomas Kelley and Brett Michael Dykes are contributors to the Yahoo! News blog
If you've recently found yourself wondering, "What the heck is going on with the health care reform debate?", you're not alone. The American legislative process is unwieldy, and never more so than in the United States Senate. Now that the Senate voted Saturday to move its bill to a full debate, some big hurdles remain.
Because we think you may have some of the same questions we did, and the bill being discussed would constitute one of the most consequential reforms in a generation if passed, we thought we'd put together a quick primer on what to expect in the weeks to come.
So, what exactly happened Saturday?
Saturday night at 8 p.m. ET, Senate Majority Leader Harry Reid brought his proposed bill to the floor of the Senate for a procedural vote to kick off a full debate and amendment process. To get things started, he needed 60 votes for a "motion to proceed." He got them.
The big suspense was over whether or not the bill would be successfully filibustered by opponents who wanted to stop the bill from moving forward.
What the heck is a filibuster?
Saturday night's "motion to proceed" vote was the first time the process could be stopped by a filibuster. There are two more times remaining.
With a filibuster, Republicans can prevent a vote by extending debate indefinitely by, for example, reading Sarah Palin's new book over and over and over again and refusing to stop. To bypass a hypothetical "Going Rogue" loop, Harry Reid needs 60 senators to vote to end any filibuster. This is called a "cloture" vote.
After Saturday, opponents will get their next chance to filibuster when the Senate votes to end full debate and send the bill to its final phase.
Who would filibuster and why?
Excluding the outside possibility that Olympia Snowe would break ranks, all 40 Republicans would likely support a filibuster. So, to prevent Democrats from getting the 60 votes necessary to break one, only one Democrat or independent would need to defect.
The most likely suspects for this are independent Joe Lieberman and conservative Democrats Mary Landrieu, Ben Nelson, and Blanche Lincoln. Recent speculation has focused on Lincoln, who faces low approval numbers in conservative Arkansas and an upcoming re-election bid in 2010. Nelson and Landrieu are also both from conservative states, though neither is up for re-election in 2010. Lieberman is not up for re-election and is from more liberal Connecticut, but may be influenced by the large insurance industry presence in his state.
What happens if the Senate does pass a bill?
After weeks of speeches and amendments and filibuster threats, if the Senate passes a bill, it moves on to a "conference committee." Here, members of both the House and the Senate will negotiate over the final details while trying to merge the bill passed by the House with the bill passed by the Senate.
All the hot-button issues will be on the table. If the Senate passes a bill without a "Public Option" it will need to be debated again. Many House Democrats want the controversial Stupak Amendment, which bans funding or subsidies for any insurance plan that funds abortion, removed in conference.
If these issues are ironed out, the committee will create a "conference report," or final bill, that will need to be passed yet again by both the House and the Senate. Yet again this vote in the Senate can be filibustered, so any ''conference report'' will need the support of 60 senators one last time.
If the "conference report" is passed in both houses of Congress, it will be sent to President Obama's desk for his likely signature.
When will all of this be over?
Up until last week, few people thought that this process could be completed by the end of the year. But the Senate Democrat's bill recently received positive feedback from the Congressional Budget Office, the nonpartisan federal agency that advises Congress on financial matters. This has led some political observers to think that maybe, just maybe, Americans will know whether or not their country's health care system will be dramatically overhauled in time for the holidays.
-- Thomas Kelley and Brett Michael Dykes are contributors to the Yahoo! News blog
Friday, November 20, 2009
Key Provisions of the Senate Health Care Bill
http://www.cbsnews.com/blogs/2009/11/19/politics/politicalhotsheet/entry5713730.shtml
This post was written by CBS News correspondent Nancy Cordes and CBS News producer John Nolen
Senate Majority Leader Harry Reid unveiled his health care proposal "The Patient Protection and Affordable Care Act" on Wednesday night.
The Congressional Budget Office says the bill would cost $848 billion dollars over 10 years, reduce the deficit by $130 billion and would extend coverage to 94 percent of eligible Americans, reducing the number of uninsured individuals by 31 million leaving about 24 million people uninsured.
Here's a look at some of the key provisions of the bill:
• Effective Date 2014
• Requires most individuals to purchase coverage through their employer, privately or through a public plan. Includes exemptions for economic hardships. Fines for individuals not complying would start at $95 in 2014 phased-in over time up to $750.
• Creates a new public federal health insurance plan, the so-called "public option" which would compete with private insurers. States would have the choice of opting out by passing a state law.
• Establishes Health Insurance Exchanges, a marketplace where individuals, small businesses and others could purchase health care coverage.
• Insurance companies could not refuse coverage based on pre-existing condition. Would not allow higher premiums for pre-existing conditions or based on gender.
• Allows children to stay on their parents plan up to age 26.
• There's no employer mandate, but fines are paid by companies if the government subsidizes employees coverage.
• Extends tax credits to individuals and families earning up to 400 percent of the poverty level, on a sliding scale depending on income. On the low end of the scale Americans would pay no more than 2 percent of their income on premiums, rising to 9.8 percent at the high end of the scale.
• Forty percent Tax on high premium insurance plans, so-called "Cadillac" plans, those plans costing over $8,500 for individuals and $23,000 for families.
• Creates a new 5 percent tax on elective Cosmetic Surgery
• Increases Medicare payroll taxes by one-half percent to 1.95 percent for individuals earning more than $200,000 or couples earning more than $250,000.
• Limitations on Health flexible spending accounts, capping annual contributions at $2,500.
• Provides for one year additional $500 dollars for seniors before hitting the Medicare donut hole, but does not close the donut hole.
• Expands Medicaid program for low – income people from 100 percent of poverty level to 133 percent of poverty level.
• Immigrants in the country illegally would not receive health care subsidies, nor would they be able to obtain insurance through an insurance exchange.
This post was written by CBS News correspondent Nancy Cordes and CBS News producer John Nolen
Senate Majority Leader Harry Reid unveiled his health care proposal "The Patient Protection and Affordable Care Act" on Wednesday night.
The Congressional Budget Office says the bill would cost $848 billion dollars over 10 years, reduce the deficit by $130 billion and would extend coverage to 94 percent of eligible Americans, reducing the number of uninsured individuals by 31 million leaving about 24 million people uninsured.
Here's a look at some of the key provisions of the bill:
• Effective Date 2014
• Requires most individuals to purchase coverage through their employer, privately or through a public plan. Includes exemptions for economic hardships. Fines for individuals not complying would start at $95 in 2014 phased-in over time up to $750.
• Creates a new public federal health insurance plan, the so-called "public option" which would compete with private insurers. States would have the choice of opting out by passing a state law.
• Establishes Health Insurance Exchanges, a marketplace where individuals, small businesses and others could purchase health care coverage.
• Insurance companies could not refuse coverage based on pre-existing condition. Would not allow higher premiums for pre-existing conditions or based on gender.
• Allows children to stay on their parents plan up to age 26.
• There's no employer mandate, but fines are paid by companies if the government subsidizes employees coverage.
• Extends tax credits to individuals and families earning up to 400 percent of the poverty level, on a sliding scale depending on income. On the low end of the scale Americans would pay no more than 2 percent of their income on premiums, rising to 9.8 percent at the high end of the scale.
• Forty percent Tax on high premium insurance plans, so-called "Cadillac" plans, those plans costing over $8,500 for individuals and $23,000 for families.
• Creates a new 5 percent tax on elective Cosmetic Surgery
• Increases Medicare payroll taxes by one-half percent to 1.95 percent for individuals earning more than $200,000 or couples earning more than $250,000.
• Limitations on Health flexible spending accounts, capping annual contributions at $2,500.
• Provides for one year additional $500 dollars for seniors before hitting the Medicare donut hole, but does not close the donut hole.
• Expands Medicaid program for low – income people from 100 percent of poverty level to 133 percent of poverty level.
• Immigrants in the country illegally would not receive health care subsidies, nor would they be able to obtain insurance through an insurance exchange.
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