While President Barack Obama praised a $1.2 trillion comprehensive health reform bill passed by the House as “courageous” and “historic,” Republican congressmen and members of the insurance industry are faulting the bill for its numerous shortcomings, especially the public option.

The Affordable Health Care for America Act (HR 3962) passed a vote in the House Nov. 7 by a vote of 220-215, with 39 Democrats voting against the measure and only one Republican – Rep. Ahn “Joseph” Cao (R-La.) – voting in favor. Among the bill’s stipulations are the creation of a government-run insurance program, created to offer plans in competition with the private market, and health insurance exchanges, online marketplaces for individuals and small business to shop for coverage. The bill also requires every American to obtain health insurance by 2013, ends an antitrust exemption for insurers, and bans them from denying or limiting coverage for pre-existing conditions or imposing lifetime limits on coverage.

Both the House and Senate will have to agree on a single bill to reach Obama’s desk. The Senate has not passed its final bill.

“Given the heated and often misleading rhetoric surrounding this legislation I know that this was a courageous vote for many members of Congress, and I’m grateful to them and for the rest of their colleagues for taking us this far,” President Obama said in a statement following the passage of the bill.  “Now it falls on the United States Senate to take the baton and bring this effort to the finish line on behalf of the American people. And I’m absolutely confident that they will.”

Senate opposition

Senators, however, were not as confident as the president. Senate Majority Leader Harry Reid (D-Nev.) has said getting a comprehensive bill in his own chamber of Congress might not happen until the end of this year.

Meanwhile, following the House vote, two prominent members of the Senate voiced their opposition to HR 3962 and its chances of passage.

Speaking on “Fox News Sunday,” Sen. Joe Lieberman (I-Conn.) reiterated his opposition to the public plan, calling it “unnecessary” and included in the bill “by people who really want the government to take over all of health insurance.”

Sen. Lindsey Graham

“If the public option plan is in there, as a matter of conscience, I will not allow this bill to come to a final vote, because I believe the debt can break America and send us into a recession that’s worse than the one we’re fighting our way out of today,” Lieberman said.  “I don’t want to do that to our children and grandchildren.”

Sen. Lindsey Graham (R-S.C.) called the House bill “dead on arrival” in the Senate.

“I think the public option will destroy our private health care,” Graham said on CBS’ “Face the Nation” Nov. 8. “Nobody in this country in the insurance business can compete with a government-sponsored plan, where the government writes the benefits and politicians will never raise the premiums. It will be a death blow to private choice.”

Industry ‘disappointed’

Joining senators in their opposition to the House bill, spurred by the inclusion of the public option, were two of the biggest health insurance industry trade groups: America’s Health Insurance Plans and the Blue Cross Blue Shield Association (BCBSA).

As she did prior to the vote, AHIP president and CEO Karen Ignagni decried the public option as a tool to cause millions to lose their coverage and said cuts to Medicare Advantage “will force millions of seniors out of the program entirely.

“This bill imposes inflexible mandates before getting everyone covered and new regulations that duplicate what is already in place at the state level,” Ignagni said in a statement on behalf of the organization’s nearly 1,300 member companies. “Many of these reforms begin in 2010 after employees have already chosen their plans and contracts have been negotiated. The result will be increased costs and massive disruptions in the quality coverage individuals and families rely on today.”

In its statement, the BCBSA said it was “disappointed” with the passing of a House bill “that undermines the goals of comprehensive health reform.

“Instead of using this once-in-a-generation opportunity to expand coverage, rein in costs, and improve healthcare quality, the bill creates a new government-run plan that jeopardizes affordability and access to coverage for the 160 million people who receive their benefits through their employers today; makes health coverage much more expensive, particularly for individuals and small employers; and represents a massive federal takeover of state regulatory functions,” its statement said.

The BCBSA represents 39 independent, locally operated Blues across the nation covering nearly 102 million Americans.

‘Winners and losers’

Also voicing its dissatisfaction with the House bill was the Independent Insurance Agents & Brokers of America, whose president and CEO, Robert Rusbuldt, said the trade group was “greatly disappointed” with the House bill.

“We seem to be back on square one: a bad bill that includes a ‘public option’ and deprives the American people of true choices in their health care,” Rusbuldt said.

“The House passed a bill today that includes a government-run health insurance plan that would unfairly compete with the private insurance marketplace, limit consumer choice and increase the taxpayer burden,” added Charles Symington, Big I senior vice president of government affairs. “This bill picks winners and losers, and small businesses and health care consumers are the biggest losers today.”

Symington pointed to the bill’s 5.4% surtax on individuals earning more than $500,000 a year, which also applies to small businesses filing as individuals, and a mandate on insurers to provide coverage to their employees or face an 8% payroll tax.

“An unreasonable employer mandate coupled with a huge tax increase will put many small businesses in the untenable position of deciding between job cuts, employee pay cuts, or shutting their doors,” said Symington. “Health care reform should not be financed on the backs of small businesses that are struggling to make ends meet in this very difficult economic time.”