Health Care and Education Reconciliation Act of 2010

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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
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) and signed into law by President Barack Obama on March 30, 2010 at Northern Virginia Community College.

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

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 passed the Senate by a vote of 56-43, after having two minor provisions stricken under the Byrd Rule. A few hours later, the amended bill was passed by the House with the vote of 220-207.


On March 30, 2010 Obama signed the Health Care and Education Reconciliation Act of 2010 [1] 7 days after he had signed the Patient Protection and Affordable Care Act into law.[2][3] At the end of 2009, each house of Congress passed its own health care reform bill, but neither house passed the other bill. 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 super-majority 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, which failed. Republicans struck two provisions dealing with Pell Grants 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: Blanche Lincoln (D-AR), Ben Nelson (D-NE) and Mark Pryor (D-AR). Later 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 made several changes to the Patient Protection and Affordable Care Act that was signed into law 7 days earlier on March 23, 2010. These changes include the following,[18]

  • Increasing tax credits to buy insurance
  • Eliminating several of the special deals given to senators, such as Ben Nelson's "Cornhusker Kickback"
  • Lowering the penalty for not buying insurance from $750 to $695
  • Closing the Medicare Part D "donut hole" by 2020 and gives seniors a rebate of $250.
  • Delaying the implementation on taxing "Cadillac health-care plans" until 2018
  • Requiring doctors who treat Medicare patients be reimbursed at the full rate
  • Setting up a Medicare tax on the unearned incomes of families that earn more than $250,000 annually.
  • Offering 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]
  • Setting a penalty for a company with more than 50 workers not offering health care coverage after 2014, of $2,000 for each full-time worker above 30 employees. For example, an employer with 53 workers will pay the penalty for 23 workers, or $46,000.[19]
  • Increasing Medicaid payment rates to primary care doctors to match Medicare payment rates, which are higher, in 2013 and 2014.[19]
  • Having the federal government pay all 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.
  • Providing a 50% discount on brand-name drugs for Medicare patients beginning 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]
  • Extending 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.[21] The reform package included,[22]

  • Ending 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.[23]
  • Increasing the Pell Grant scholarship award.
  • For new borrowers of loans starting in 2014, those who qualify would be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income, down from 15%.[22]
  • For new borrowers after 2014, loans would be eligible to be forgiven to those who make timely payments after 20 years, down from 25 years previously.[22]
  • making it easier for parents to take out federal loans for students.[24]
  • using several billion dollars to fund schools that predominantly serve poor and minority students, as well as increasing community college funding.[23]

Tax avoidance

The law codified the "economic substance" rule of Gregory v. Helvering from 1935, which allows the IRS to invalidate tax avoidance transactions in certain situations.[25]

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.[26] 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.[27]

See also


  1. Pub.L. 111–152, 124 Stat. 1029, codified as amended at scattered sections of the Internal Revenue Code and in 42 U.S.C., 19 U.S.C., and 20 U.S.C.
  2. Obama signs higher-education measure into law William Branigin The Washington Post March 30, 2010.
  3. "Obama To Sign Health Care Reconciliation Bill". March 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  4. Gay, Sheryl (March 17, 2010). "Health Vote Caps a Journey Back From the Brink". The New York Times. Retrieved March 21, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  5. "Concurrent Resolution on the Budget for Fiscal Year 2010 - S.CON.RES.13".<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  6. 6.0 6.1 Klein, Philip (2010-03-15). "The Health Care "Shell" Game Begins". The American Spectator. Retrieved 7 April 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  7. HR443P1.PS
  8. HR443P2.PS
  10. 10.0 10.1 Brown, Carrie Budoff. "Loan bill could give Obama twin win". Retrieved 21 January 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  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.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  12. Roll call vote 167, via
  13. Health Care Fix-It Bill Headed for Revote 25 March 2010
  16. Roll call vote 105, via
  17. Roll call vote 194, via
  18. Reconciliation bill posted. Live Pulse. March 2010
  19. 19.0 19.1 19.2 19.3 19.4 19.5 Hossain, Farhana (March 19, 2010). "Proposed Changes in the Final Health Care Bill". The New York Times.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  20. "Policies to Improve Affordability and Accountability". The White House. February 22, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  21. Text of H.R.4872 as Reported in House: Health Care and Education Affordability Reconciliation Act of 2010 - U.S OpenCongress
  22. 22.0 22.1 22.2
  23. 23.0 23.1 "What would change if student lending legislation passes". The Washington Post. March 26, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  24. Big Changes Coming to Student Loans - US News and World Report 24 March 2010
  25. Rose CA. Tax Lawyer’s Dilemma: Recent Developments Heighten Tax Lawyer Responsibilities and Liabilities. Columbia Business Law Review. Volume 2011, Issue 1.
  26. "Cost Estimate for Pending Health Care Legislation". CBO Director's Blog. n.d. Retrieved March 21, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  27. "Health care reform bill 101: Who will pay for reform?". Christian Science Monitor. 22 March 2010. Retrieved 22 March 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>

External links