House Healthcare Bill Passed in U.S. After Bitter Battle

The U.S. healthcare reform process moved one step forwards with the passage of this version of the bill in the House of Representatives. The bill—H.R. 3962, entitled the "Affordable Healthcare for Americans Act"—mandates wider healthcare insurance coverage for over 90% of the population. The financial consideration attributed to the House's version of reform is expected to be less than US$900 billion spread over a decade. The passage of the bill was a stormy one, however, before being approved by the House. The voting margins were very tight, with 220 positive and 215 negative votes.

The bill is a disappointment for healthcare insurance firms, who would be under greater scrutiny if the bill is enacted. According to the Wall Street Journal, the bill repeals an exemption from federal antitrust oversight, increasing challenges for the industry. Furthermore, competition in the market would increase if the government goes ahead with the public healthcare insurance plan option. President Barack Obama's government is also understood to be stepping up antitrust enforcement efforts, which could increase the challenges in the market and bring any acquisitions or mergers under the regulatory spotlight.

Despite increasing opposition from the insurance and even the pharmaceutical industry, the AARP (Association for the Advancement of Retired People) and the American Medical Association (AMA) have both endorsed the House's version of legislation. The AMA's support comes with some conditions attached, however—namely, to commit to rolling back any mandated cuts in physician payments under Medicare, according to the Christian Science Monitor. Still, the amendments announced before the House passed the healthcare bill are expected to have provided crucial support.

Outlook and Implications

The healthcare reform process is one of President Obama's key agendas to tackle in the first year of his presidency. However, the reform legislation has faced stiff opposition and consistent delay in the U.S. Congress, pushing back the earlier deadline for signing of the legislation in October 2009 to the current, more realistic, December 2009. The passage of the bill supports this new deadline, as the Senate members will be under increasing pressure to pass their own version of the health legislation over the next few weeks.

The broad outline of the healthcare legislation emanating from Congress has remained broadly consistent, with emphasis clearly on expanding insurance coverage, increasing industry oversight, and cutting costs. The General Accountability Office (GAO) has, in tandem with the announcements of the various committee bills, as well as the final House bill, provided its comments on the financial impact of the proposed legislation—primarily, whether it adds to the federal fiscal deficit or not. The House bill has scored well in this respect, with the GAO noting that the first decade will see no addition to the deficit, although subsequently there would be increasing contributions expected.

The impact of the passage of the healthcare bill on the various industry groups has been more or less consistent, too. The pharmaceutical industry is fighting off efforts to increase scrutiny over drug prices, including a potential price negotiation for federal programmes such as Medicare and Medicaid. However, the insurance industry is expected to face tougher challenges, with higher oversight scrutiny and competition from a federal government-backed public healthcare plan.

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