This month, as Congress begins to reconcile two very different health care reform bills in the Senate and House, it is worth taking perspective on the significance of this moment. It is an understatement to say that the road to health reform has been long and difficult. The most recent attempt, in 1994, failed through a combination of scare tactics by opponents and intense opposition from entrenched and wealthy interests. Since then, the health insurance industry has staved off the threat of real reform by pledging to control costs and make health insurance affordable. They have failed to deliver, however, and do not deserve another chance to play with the lives and pocketbooks of the American people.
Meaningful health reform must deliver accessible, affordable, high quality health care. Passage of reform is critical to the economic health of our nation and for millions of chronically ill and low income Americans. It is the goal of the thousands of chronically ill Americans who come to Capitol Hill every year, and the millions unable to make the trip, who share their stories of struggling with insurance company bureaucracy, medically related personal bankruptcies, deaths, and financial ruin that result from our broken health care system. It is the goal of county and local health officials who struggle to deliver the services their communities need as the public health system across our nation struggles under the weight of the uninsured and underinsured. These voices are not the fringe of America; they are from the heart of our nation and represent the reality of our broken health care system.
Businesses small and large, their employees, the self-employed, and the self-insured all find themselves increasingly unable to bear the cost of premiums that climb 8, 10, 15, or as much as 25% per year, every year. Our bill in the House -- America's Affordable Health Choices Act, H.R. 3962 -- was specifically designed to address the needs of small businesses, middle and low-income workers, and families to expand access and quality, while creating transparency and accountability in the health care industry.
The bill allows small businesses to access, for the first time, large group provider rates through the mechanism of the health insurance exchange. It provides substantial tax credits for small businesses to provide health care for their workers. Subsidies are made available to American families from 150% up to 400% of the federal poverty line so they can afford to purchase the health insurance plan of their choice. For the very poorest families in our communities, H.R. 3962 expands Medicaid to 150% of the federal poverty line, and it does so without substantially burdening the states. In fact, for the first three years, the expansion is fully funded by the Federal government and thereafter, states shoulder only 10% of the expansion.
Our bill in the House ends the insurance industry practice of capping annual and lifetime payments for health care. In two years, pre-existing conditions will no longer be able to be used as the basis for coverage denials. Insurance companies will have to report and justify their rate increases and spend at least 85% of the premium dollars they collect directly on patient care rather than administrative costs. We invest heavily in preventative services because we know that chronic health conditions either prevented or caught early cost less to the system and less to the patient than only responding to acute health needs. H.R. 3962 institutes basic consumer protections and requires plans to provide information and outreach in plain language, increasing consumer knowledge and power. Finally, because so much of our focus is on strengthening prevention and coordination of patient care (more efficient, cost effective, and results in better health outcomes), the House bill contains a much stronger investment in primary care physician training and education than the current Senate bill. In fact, I recently joined several of my colleagues in sending a letter to the President and Congressional leaders supporting the House language over the Senate language because of this concern.
As Congress calls upon its constituents to weigh in on health care reform during this final phase, I encourage all who are interested in health reform to visit my website and the websites of the Speaker of the House of Representatives and the Committee on Energy and Commerce to read the bill yourself, access summaries and fact sheets about the bill and its effects on different groups, and educate yourself about the substance of the bill.
Rep. Mike Honda represents California's 15th district and serves on the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies.