Affordable Health Care for America Act

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Article summary (how summaries work)
The Affordable Health Care for America Act (H.R. 3962) is the final, merged version of the health care reform legislation that the House has been working on for much of 2009. The bill contains a moderate compromise on the public option by requiring the HHS Secretary to negotiate provider reimbursement rates rather than having them tied to Medicare. The bill also would require all individuals to have insurance, establish a new health insurance exchange, require most employers to provide insurance, ban insurance companies from denying coverage because of pre-existing conditions and more.

This bill has been estimated to extend health insurance to roughly 96 percent of the population at a ten year cost of $894 billion. It contains a number of tax and revenue provisions that result in it being deficit neutral over the 10-year budget period.

Expanding Coverage and Choice

  • Established a new Health Insurance Exchange for individuals and employers to use for comparison shopping between health care plans. The Exchange will carry plans that meet certain minimum coverage standards and will be available to the general public as a website and telephone hotline.
  • Creates a government-run public health insurance option to compete with the private plans offered on the Exchange. Unlike a previous version of the bill that would tie the public option to Medicare rates, the public option would have reimbursment rates that are negotiated by the Secretary of HHS. The Congressional Budget Office has estimated that the negotiated-rate public option would have higher premiums, on average, than similar private plans.
  • The bill contains a number of consumer protections including a ban on insurance companies denying coverage because of pre-existing medical conditions. It would also prohibit annual and lifetime caps on benefits and would only allow insurance companies to consider age, geographic region and family size when setting rates.
  • long-standing exemption from the federal antitrust laws would be ended by the bill.

Making Insurance More Affordable

  • Provides sliding-scale affordability credits for helping low and medium-income people buy insurance. The credits start and are most generous just above 150% of the Federal Poverty Level (the proposed new cut off for Medicaid) and are phased out completely at 400% of FPL. No affordability credits would be given to undocumented immigrants and any that are used to buy insurance plans that cover abortion must be segregated from the individual's share of the premiums so that the credits don't go towards the abortion coverage.
  • Caps annual out-of-pocket spending for qualifying plans at a maximum of $5,000 per individual.
  • Expands Medicaid eligibility to all individuals and families with incomes below 150% of the FPL.


  • Requires all employers (besides small ones with payrolls below $500,000 annually) to provide insurance for their eployees or pay a fine based on a percentage of their pay roll. The percentage would be phased up from 2% for companies just above the $500,000 payroll floor to the full 8 percent for companies with payrolls above $750,000.
  • Starting in 2013, once all provisions are implemented, it would require all individuals to have qualifying insurance coverage or pay an annual fine capped at 2.5 percent of income.


  • It requires all Americans to purchase comprehensive health insurance plans that provide more health benefits than most current health care plans. See pp. 103-118.
  • It requires the federal government to provide health insurance (public option) and long-term care insurance (CLASS program). See pp. 211-225 and 1562-1605.
  • It mandates price controls for health insurance, medical services, medical equipment, and prescription drugs. See pp. 96-97.
  • It provides unlimited funds to 30 grants and programs. See pp. 76, 1219, 1224, 1252, 1349, 1360, 1366, 1381, 1397, 1410, 1433, 1440, 1457, 1464, 1467, 1480, 1488, 1508, 1604, 1876.
  • It creates 74 new types grants. Each type may be granted multiple times by the Secretary of Health and Human Services at her discretion. See pp. 63, 72, 206-210, 618, 619, 737, 1176, 1190, 1232, 1234, 1236, 1241, 1248, 1262, 1265, 1268, 1270, 1272, 1305, 1308, 1313, 1314, 1315, 1333, 1352, 1361, 1372, 1382, 1385, 1391, 1398, 1402, 1410, 1412, 1418, 1422, 1433, 1437, 1441, 1457, 1462, 1464, 1467, 1480, 1487, 1609, 1626, 1628, 1655, 1664, 1667, 1698, 1702, 1704, 1719, 1744, 1748, 1749, 1797, 1801, 1827, 1850, 1860, 1868, 1869, 1871, 1874, 1875, 1877, 1900, 1910, 1925, and 1930.
  • It prevents states from receiving grant money if they enact tort reform. See pp. 1431-1433.
  • It creates federal insurance exchanges that are supported by national call centers to guide consumer choice, handle enrollment, process claims, and handle complaints. All communications must be supported in every language and culture in each state. See pp. 183-194, 617-618, 627, 1368, 1429, 1646, 1722, 1913, 1922, 1926, and 1934.
  • It limits FSAs, MSAs, and HSAs only to prescription drugs and insulin. It eliminates the option to make pre-tax purchases of non-prescription drugs, eyeglasses, dental care, etc. See pp. 324-325.
  • It creates several new federal agencies. One is the "Health Choices Administration" (see p. 131), which oversees Health Insurance Exchanges (see p. 155). Another is the "Indian Health Services", which oversees healthcare services to American Indians (see p. 1877).
  • It creates several new offices, such as the “Office of the ombudsman” (p. 213), "Office on Women's Health" (see pp. 1609, 1613, 1619, and 1621), and “Office of Indian Men’s Health” (see p. 1765).
  • It creates a massive expansion of the Department of Heath and Human Services, which already runs Medicaid and Medicare. It assigns more than 1000 new responsibilities to the Secretary of Health and Human Services. This includes giving away hundreds of grants worth billions of dollars, and overseeing a budget increased by hundreds of billions of dollars to support literally thousands of new regulations, penalties, sanctions, moratoriums, audits, investigations, oversights, surveillance, approvals, lawsuits, negotiations, services, awards, scholarships, loans, contracts, rebates, reimbursements, compensations, exemptions, waivers, reforms, offices, committees, task forces, centers, programs, standards, requirements, measures, methods, priorities, goals, rules, policies, processes, protocols, guidelines, plans, studies, surveys, reports, publications, web sites, call centers, data centers, facilities, training, and jobs. Almost every page in the bill gives new powers to the secretary. A few highlights include pp. 31, 56, 63, 72, 77-78, 88-89, 105, 205, 210, 211, 212, 213, 214, 216, 217, 219, 220, 266, 281, 284, 293, 426, 450, 510, 560, etc.
  • It gives the Secretary of HHS discretionary power to set prices, deny coverage, and ration health care (see pp. 19, 22, 23, 26, 62, 397-402, 404-405, 408, 478, 491-493, 508, 558-560, 582, 650, 725, 862, 1092, 1342, 1567, and 1571).
  • It requires the government to track and cross-link data for every medical claim, transaction, health record, patient survey, medical device and the data it produces. See pp. 76-89, 406-408, 661-662, 1330-1338, and 1502-1510.
  • It requires the government to track personal information such as the hiring of nurses and doctors along with their wages, benefits, turnover, and tenure; the tracking of drugs prescribed by doctors, the personal financial transactions of doctors, and the personal investments made by doctors. See pp. 762-825 (764, 809, 823, 825), 889-896, and 1230-1231.
  • It creates a new "Center for Comparative Effectiveness Research", which is given unlimited access to all information from all federal departments and agencies (see pp. 736, 737, 746). This includes information from Medicare, Medicaid, Social Security, the new health exchanges, the new government-run insurance agencies. This includes the new electronic data that will be collected by the government, which tracks all medical records, claims, complaints, financial data, doctors fees, doctors wages, medical equipment data, etc. The purpose is to enable the center to make recommendations so the new "Center for Quality Improvement" can define "best practices" to be incorporated into the "workflow of health care providers". See pp. 734-737, 738-762, 823-826, and 1323-1330.


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(The page numbers referenced in this article refer to the pages in the PDF.)