U.S. House Passes Major Health-Care Overhaul Bill

(Adds President Obama's comments, number of Democratic detractors.)

WASHINGTON -(Dow Jones)- The U.S. House on Saturday passed landmark health overhaul legislation that would extend insurance coverage to 36 million Americans now lacking it, taking a crucial step toward realizing President Barack Obama's top legislative priority.

The bill passed by a 220-215 vote. Rep. Joseph Cao (R., La.) was the lone Republican supporting the bill. A total of 39 Democrats voted against the bill.

The bill's passage, which came after exhaustive negotiations within the Democratic ranks, was assured only hours before the vote took place. It is the first bill of its kind--a broad-ranging measure aimed at revamping the modern U.S. health sector and moving the nation toward universal health coverage--that has passed the House or the Senate.

"For generations, the American people have called for affordable, quality health care for their families," said House Speaker Nancy Pelosi (D., Calif.). "Today, the call will be answered."

President Barack Obama touted the passage of the bill in a statement after the vote.

"Thanks to the hard work of the House, we are just two steps away from achieving health insurance reform in America," Obama said. "Now the United States Senate must follow suit and pass its version of the legislation. I am absolutely confident it will, and I look forward to signing comprehensive health insurance reform into law by the end of the year."

A number of Democrats announced their opposition to the bill before the vote, many of whom cited concerns about its $1.1 trillion cost and potential for adding to the federal budget deficit over the long haul.

House Democratic leaders won sufficient support for the bill only after allowing passage of an amendment to the bill aimed at barring federal funding of abortions under insurance plans offered in an "exchange" created by the bill in a concession to pro-life Democrats. In a dramatic reversal of the bill's earlier direction, pro-choice lawmakers unsuccessfully mounted a last-ditch effort to defeat the amendment.

But as the bill's passage appeared to be a foregone conclusion, tensions between the warring factions gradually eased. President Barack Obama spoke to House Democrats Saturday morning, urging them to take action on the bill.

In remarks later in the day at the White House, Obama said "this is our moment to live up to the trust that the American people have placed in us."

Republicans argued that a public health insurance plan that would be created by the bill would displace private health insurance. The result, they said, would be government bureaucrats making decision on what medical practices and procedures would be covered and which doctors would see patients covered by the plan.

"When patients, and their families, and their doctors are not allowed to independently decide what care should be provided, we lose more than our healthcare system," said Rep. Tom Price (R., Ga.). "We lose our morality and our freedom."

The Senate, which is awaiting a cost estimate on a version of health-care legislation negotiated by Senate Majority Leader Harry Reid (D., Nev.) has yet to vote on a bill. If the Senate passed a bill, the two bills would have be reconciled in a conference committee before the president could sign the legislation.

Beginning in 2013, the House bill would create a vast system of tax credits for low and middle-income people to purchase insurance from the proposed exchange. Families with incomes at up to 400% of the federal poverty level--about $88,000 for a family of four--would be eligible for the subsidies.

The bill also expands the low-income Medicaid program to cover those with incomes at up to 150% of the federal poverty level.

The bill would also bar insurers from denying coverage based on pre-existing conditions in 2013. The bill would require, however, that most individuals carry insurance or face a penalty of up to 2.5% of their adjusted gross income.

Likewise, it would require employers with payrolls of $500,000 or more to offer insurance coverage or face a penalty of 8% of their payroll.

The bill would paid for by a mix of new tax provisions and spending cuts. The most significant change would place a 5.4% surtax on individuals earning more than $500,000 and joint incomes of more than $1 million--a provision that would generate $460.5 billion over ten years.

The vote marks a victory for Pelosi despite Democratic leaders' concessions to allow a vote on the anti-abortion amendment. Divisions between Democrats had endangered the bill earlier in the week, with pro-life Democrats threatening to block a vote of the bill on the House floor.

House Democrats on Friday had appeared to embrace language offered by Rep. Brad Ellsworth (D., Ind.) that would clarify that the federal government would not pay for abortion coverage. But the U.S. Conference of Catholic Bishops indicated that they would not support the bill without stronger language barring federal funding of abortions, which hardened the position of the pro-life lawmakers.

"We thought that we'd met the expectations of those who were against abortion coverage," said House Energy and Commerce Chairman Henry Waxman (D., Calif.). "The [Conference of Catholic Bishops] disagreed with that and looked at it in a different way, and that was a very difficult issue to resolve."

The amendment that passed, which was offered by Rep. Bart Stupak (D., Mich.), would essentially disallow people receiving affordability subsidies from enrolling in private insurance plans in the proposed national exchange, if the plans offer abortion coverage. It was approved by a 240-194 vote.

-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com

(END) Dow Jones Newswires

11-08-09 0039ET