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FOR IMMEDIATE RELEASE: October 1, 2009

SCHUMER OFFERS MAJOR REVISION TO HEALTH CARE REFORM BILL TO ADDRESS AFFORDABILITY CONCERNS


Proposal Would Expand Hardship Waiver To Exempt More Americans From Mandate To Buy Insurance If Affordable Plans Are Not Availableā€”Current Bill Sets Threshold At 10% Of Income; Schumer Amendment Lowers Bar To 8% of Income

Schumer Amendment Would Also Eliminate Penalty For Americans Who Fail To Buy Insurance In First Year Of Overhaul; For Second Year, Penalty Is Reduced By 50 P

WASHINGTON, DC—U.S. Senator Charles E. Schumer (D-NY) today offered a major revision to the Senate health care bill in order to exempt a greater number of middle-class Americans from an obligation to purchase health insurance if there are no affordable plans in their area and to prevent any penalty from being imposed on any American who fails to buy insurance in the first year after the overhaul takes effect.

 

Schumer’s amendment, which is deficit-neutral, could represent a potential breakthrough in addressing the affordability concerns surrounding the new “exchanges” established in the landmark health care reform proposal.

 

“This proposal provides needed breathing room for middle-class families that would face difficult circumstances under a mandate. We shouldn’t require anyone to buy a policy they can’t afford,” Schumer said.

 

Currently, the bill introduced by Senate Finance Chairman Max Baucus provides for an exemption from the individual mandate for Americans who only have access to insurance plans that cost more than 10 percent of their income. Schumer’s amendment would lower the threshold for this so-called “affordability waiver” to 8 percent, freeing Americans in tight economic circumstances from a requirement to purchase a health insurance policy that they cannot afford. This change would save the government roughly $5 billion.

 

The second part of Schumer’s amendment provides for a phase-in of the “personal responsibility payment” charged to Americans who are not eligible for a hardship waiver, but still fail to purchase insurance. Under Schumer’s proposal, there would be no penalty imposed on any American in the first year of the reform bill taking effect. In the second year, 50 percent of the penalty would be imposed. The full penalty would not go into effect into 2015, which would be the third year of the law.

 

This revision costs approximately $5 billion. Combined with the expanded hardship waiver, Schumer’s proposal is anticipated to be deficit-neutral.

 

“This proposal spares every American from paying a penalty in the first year of this overhaul taking effect. We should let the dust settle on this plan before we penalize anyone for not buying insurance right away,” Schumer said.

 

Schumer planned to offer the amendment Thursday afternoon after the Senate Finance Committee voted on an amendment by Senator Maria Cantwell (D-WA).

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