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Health Care and Education Reconciliation Act of 2010

Health Care and Education Reconciliation Act of 2010
Great Seal of the United States
Long title An Act to provide for reconciliation pursuant to Title II of the concurrent resolution on the budget for fiscal year 2010 (S. Con. Res. 13).
Enacted by the 111th United States Congress
Public Law 111-152
Statutes at Large 124 Stat. 1029 thru 124 Stat. 1084 (55 pages)
Acts amended Patient Protection and Affordable Care Act
Legislative history
  • Introduced in the House as H.R. 4872 by John Spratt (D-SC) on March 17, 2010
  • Committee consideration by Budget
  • Passed the House on March 21, 2010 (220–211)
  • Passed the Senate on March 25, 2010 (56–43) with amendment
  • House agreed to Senate amendment on March 25, 2010 (220–207)
  • Signed into law by President Barack Obama on March 30, 2010
Health care reform in the United States
Latest enacted
Third-party payment models
House votes by congressional district.
  Democratic yea on both votes
  Democratic nay on both votes
  Democratic nay on first vote, not voting on second
  Republican nay on both votes
  Republican nay on first vote, not voting on second
  Republican nay on first vote, no representative seated on second
  No representative seated
Senate vote by state.
  Democratic yea
  Democratic nay
  Independent yea
  Republican nay
  Republican not voting

The Health Care and Education Reconciliation Act of 2010 (Pub.L. 111–152, 124 Stat. 1029) is a law that was enacted by the 111th United States Congress, by means of the reconciliation process, in order to amend the Patient Protection and Affordable Care Act (Pub.L. 111–148). It was signed into law by President Barack Obama on March 30, 2010.[1]

The law also includes the Student Aid and Fiscal Responsibility Act, which was attached as a rider.[2] However, small technical parts of the bill relating to Pell Grants were removed during the reconciliation process.

Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010. The Health Care and Education Reconciliation Act of 2010 was passed by the House of Representatives on March 21, 2010, by a vote of 220–211, and on March 25, after having two minor provisions stricken under the Byrd Rule, passed the Senate by a vote of 56-43. A few hours later, the amended bill was passed by the House 220-207. President Obama signed the health care reconciliation bill into law on Tuesday, March 30, at Northern Virginia Community College.[3]


  • History 1
  • Provisions 2
    • Amending the Senate's Healthcare Bill 2.1
    • Student loan reform 2.2
    • Tax avoidance 2.3
  • Deficit effect 3
  • See also 4
  • References 5
  • External links 6


Two separate health care reform bills had been passed by each house of Congress, but neither bill was passed by the other house as of year's end 2009. The Senate bill, the Patient Protection and Affordable Care Act, became the most viable avenue to reform following the death of Democratic Senator Ted Kennedy and his replacement by Republican Scott Brown. Lacking a filibuster-proof supermajority in the Senate, the Obama administration and House Speaker Nancy Pelosi began encouraging the House to pass the Senate bill, then pass a new bill to amend it using the reconciliation process.[4]

Under the Fiscal Year 2010 budget resolution,[5] the text of the reconciliation bill submitted to the Budget Committee had to have been reported by the relevant Committees by October 15, 2009.[6] Therefore, the Democrats combined the text of America's Affordable Health Choices Act of 2009 as reported out of the Ways and Means Committee, and as it was reported out of the Education and Labor Committee, and the text of the Student Aid and Fiscal Responsibility Act as reported out of the Education and Labor Committee.[7][8] This version was never meant to be passed, it was only created so that the reconciliation bill would comply with the Budget resolution.[6] The bill was automatically amended to the version that was meant to be passed per the special rule that was reported out of the Rules Committee.[9] The Student Aid and Fiscal Responsibility Act was added to the Reconciliation Act as only one reconciliation bill can be passed each budget year, and it also faced a tough road through the Senate due to Republican filibuster and opposition from several centrist Democratic Senators.[10] The move was also thought to give President Obama two key victories in overhauling the health care and student loan system. It also eventually became clear that the budget savings caused by the student loan bill would become essential to the overall reconciliation bill by reducing the deficit enough for the overall bill to qualify for the reconciliation process.[10]

Passage of the legislation in the United States House of Representatives using the self-executing rule method was considered but rejected by House Democrats. Instead, on March 21, 2010, the House held a series of votes: the first vote on ordering the previous question on the special rule resolution that set the terms of debate, the second on the rule itself, the third on the Senate bill, the fourth on a minority attempt to amend the reconciliation bill itself, and finally a vote on the reconciliation bill itself.[11] The reconciliation bill passed on a vote of 220–211, with all 178 Republicans and 33 Democrats voting against it.[12]

In the Senate, the bill faced numerous amendments made by the Republicans, all of which failed. However, the Republicans had two provisions dealing with Pell Grants stricken from the bill due to violations of budget reconciliation rules, forcing the bill to return to the House.[13] The two provisions were: The fourth paragraph of Sec. 2101(a)(2)(C) and Sec. 2101(a)(2)(D).[14][15] On March 25, the bill passed the Senate by a 56–43 vote, with all Republicans and 3 Democrats voting against it.[16] The only Democratic Senators to vote against were: Lincoln (D-AR), Nelson (D-NE) & Pryor (D-AR). Later in the same day the House passed the modified bill by a 220–207 vote, sending it to President Obama for a signature.[17]


The Health Care and Education Reconciliation Act is divided into two titles, one addressing health care reform and the other addressing student loan reform.

Amending the Senate's Healthcare Bill

The Reconciliation bill makes several changes to the Patient Protection and Affordable Care Act that was signed into law on March 23, 2010. These changes include the following,[18]

  • Increasing the tax credits to buy insurance
  • Eliminates several of the special deals given to senators, such as Ben Nelson's "Cornhusker Kickback"
  • Lowers the penalty for not buying insurance from $750 to $695
  • Closes the Medicare Part D "donut hole" by 2020 and gives seniors a rebate of $250.
  • Delays the implementation on taxing "Cadillac health-care plans" until 2018
  • Requires doctors who treat Medicare patients be reimbursed at the full rate
  • Sets up a medicare tax on the unearned incomes of families that earn more than $250,000 annually.
  • Offer more generous subsidies to lower income groups. Households below 150% of the federal poverty level would pay 2% to 4% of their income on premiums. Health plans would cover 94% of the cost of benefits.[19] Households with incomes from 150% to 400% of the federal poverty level ($88,200 for a family of four) would pay on a sliding scale from 4% to 9.8% of their income on premiums, rest will be covered by government advanceable, refundable tax credit. Health plans would cover 70% of the cost of the benefits.[19][20]
  • In 2014, if a company with more than 50 workers does not offer coverage, they will be obligated to pay $2,000 for each full-time worker in the company, exempting the money due for the first 30 employees. For example, an employer with 53 workers will pay the penalty for 23 workers, or $46,000.[19]
  • Would increase Medicaid payment rates to primary care doctors to match Medicare payment rates, which are higher, in 2013 and 2014.[19]
  • The federal government would pay all of the costs of expanding Medicaid under the reform until 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% thereafter. Some states that already insure childless adults under Medicaid would receive more federal money for covering that group through 2018.
  • The Medicare patients will receive 50% discount on brand-name drugs would begin in 2011. By 2020, the government would pay to provide up to 75% discount on brand-name and generic drugs, eventually closing the coverage gap.[19]
  • Would extend the ban on lifetime limits and rescission of coverage to all existing health plans within six months after signing into Law.[19]

Student loan reform

Title II of the reconciliation bill deals with student loan reform. The language is very similar to the Student Aid and Fiscal Responsibility Act that passed the House in 2009; but with some slight variation. The reform package includes,[21]

  • Ends the process of the federal government giving subsidies to private banks to give out federally insured loans. Instead loans will be administered directly by the Department of Education.[22]
  • Increases the Pell Grant scholarship award.
  • For new borrowers of loans starting in 2014, those who qualify will be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income (the previous cap was 15%.)[21]
  • Also, for new borrowers after 2014, loans will be eligible to be forgiven to those who make timely payments after 20 years (the current time-frame being 25 years).[21]
  • Will make it easier for parents to take out federal PLUS loans for students.[23]
  • Several billion dollars will be used to fund schools that predominantly serve poor and minority students, as well as increasing community college funding.[22]

Tax avoidance

The law codified the "economic substance" rule of Gregory v. Helvering (1935) which allows the IRS to invalidate tax avoidance transactions in certain situations.[24]

Deficit effect

The Congressional Budget Office's last estimate predicted that if both bills were passed into law in 2010, the net reduction in federal deficits would be $143 billion over the 2010–2019 period as a result of the proposed changes in direct spending and revenues. That figure comprises $124 billion in net reductions deriving from the health care and revenue provisions and $19 billion in net reductions deriving from the education provisions.[25] The health care and revenue provisions consist in part of several new taxes, fees on health-related industries, and cuts in government spending on healthcare programs like Medicare Advantage.[26]

See also


  1. ^ on, March 30, 2010.The Washington Post
  2. ^ Text of H.R.4872 as Reported in House: Health Care and Education Affordability Reconciliation Act of 2010 - U.S OpenCongress
  3. ^ "Obama To Sign Health Care Reconciliation Bill". 
  4. ^ Gay, Sheryl (March 17, 2010). "Health Vote Caps a Journey Back From the Brink". The New York Times ( Retrieved March 21, 2010. 
  5. ^ : "Concurrent Resolution on the Budget for Fiscal Year 2010 - S.CON.RES.13". 
  6. ^ a b Klein, Philip (2010-03-15). "The Health Care "Shell" Game Begins". The American Spectator. Retrieved 7 April 2010. 
  7. ^ HR443P1.PS
  8. ^ HR443P2.PS
  9. ^
  10. ^ a b Brown, Carrie Budoff. "Loan bill could give Obama twin win". Retrieved 21 January 2011. 
  11. ^ "COMMITTEE ON RULES - Senate Amendments to H.R. 3590 Patient Protection and Affordable Care Act H.R. 4872 Reconciliation Act of 2010". Retrieved March 21, 2010. 
  12. ^ Roll call vote 167, via
  13. ^ Health Care Fix-It Bill Headed for Revote
  14. ^
  15. ^
  16. ^ Roll call vote 105, via
  17. ^ Roll call vote 194, via
  18. ^ BREAKING - Reconciliation bill posted - Live Pulse -
  19. ^ a b c d e f Hossain, Farhana (March 19, 2010). "Proposed Changes in the Final Health Care Bill". The New York Times. 
  20. ^ "Policies to Improve Affordability and Accountability". The White House. 
  21. ^ a b c
  22. ^ a b "What would change if student lending legislation passes". The Washington Post. March 26, 2010. 
  23. ^ Big Changes Coming to Student Loans - US News and World Report
  24. ^ Rose CA. Tax Lawyer’s Dilemma: Recent Developments Heighten Tax Lawyer Responsibilities and Liabilities. Columbia Business Law Review. Volume 2011, Issue 1.
  25. ^ "Cost Estimate for Pending Health Care Legislation". CBO Director's Blog. Retrieved March 21, 2010. 
  26. ^ "Health care reform bill 101: Who will pay for reform?". Retrieved March 22, 2010. 

External links

  • Text of law, (available in plain text and PDF formats).
  • - The actual bill being considered.
  • - A section-by-section analysis of the bill.
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