The health reform debate in the 111 th Congress continued and expanded upon the work begun in the 110 th Congress. On November 12, 2008, the chairman of the Senate Finance Committee, Senator Baucus, released a white paper detailing his principles for health reform. This provided a framework for work within the committee for the 111 th Congress. Several bills were introduced when the 111 th Congress first convened, and these bills focused on a broad spectrum of approaches to health reform. On November 7, 2009, the House passed H.R. 3962 , the Affordable Health Care for America Act. H.R. 3962 is based on H.R. 3200 , America's Affordable Health Choices Act of 2009, which was originally introduced on July 14, 2009, and was reported separately on October 14, 2009, by three House Committees—Education and Labor, Energy and Commerce, and Ways and Means. The U.S. Senate passed its version of health insurance reform on December 24, 2009, the Patient Protection and Affordable Care Act, in H.R. 3590 , as amended by the Senate (hereafter referred to simply as H.R. 3590 ). H.R. 3590 consolidated and amended bills passed by the two committees with principal jurisdiction, the Committee on Health, Education, Labor, and Pensions, which ordered reported S. 1679 , the Affordable Health Choices Act on July 15, and the Senate Finance Committee, which ordered reported S. 1796 , America's Healthy Future Act of 2009, on October 19, 2009. The House and Senate must agree to the same measure with the same legislative language before a bill can be presented to the President. Congress did not chose to appoint a formal conference committee to negotiate a compromise that would then reported to each chamber for consideration, opting for negotiations between the chambers. In an effort to move the process forward, the President released a health reform proposal on February 22, 2010, which combines and modifies provisions in the Senate and House passed bills. On February 25, 2010, the President held a bipartisan meeting on health reform, attended by both Democrats and Republican Members of Congress. This report presents basic background information on health insurance that may be useful to legislators considering health insurance reforms. It describes health insurance reform approaches and provides brief descriptions of health insurance reform bills introduced in the 111 th Congress. The discussions in this report will not summarize all currently introduced legislation, but may be helpful in understanding the range of options that are currently being considered by Congress. The potential impact of various reform approaches and bills is not analyzed in this report. As a result, it does not provide evaluations of how well different bills, once enacted, would meet their objectives. However, all of these bills have a common focus: to address some or all of the current issues surrounding health insurance and health services. The costs of health insurance and health care services are consuming a growing portion of workers' compensation, and the percentage of individuals with job-based health insurance coverage is declining. Some states are seeking reforms in their state systems, providing useful trials and errors to potentially inform the debate at the federal level. Just as the federal debate in the 1990s was spurred by rising health care and health insurance costs, declining numbers of individuals with private coverage, and state experimentation and innovation, those same issues are at the center of the debate today. Many of the issues addressed through health reform legislation are exacerbated by the existing recession. Health insurance reform is a broad term spanning a large range of policy options, each of which has its own inherent strengths and weaknesses. Health insurance reform can focus on a discrete health insurance problem or issue, such as expanding public health insurance coverage for uninsured children or reducing the number of costly state benefit mandates and premium taxes on private health insurance plans. At the opposite end of the spectrum, however, are proposals that operate on a broader scale—changing the way people access public and/or private health insurance, investing large amounts of government resources to assist individuals with the cost of health care or health insurance, reducing costs and improving quality. The wide variation across proposed reforms is one factor that makes a simple yet comprehensive discussion of all of the important options challenging. Other fundamental differences separating health insurance reform approaches include different objectives of reforms and different priorities among important stakeholders. Health insurance reform may have a wide range of primary objectives, which can include the following: Reducing the number of people without health insurance. Most health insurance reforms seek to improve access to health insurance. In the United States, access to medical care is largely dependent on whether an individual has health insurance. Reducing the reliance on health insurance for at least some portion of needed medical care. Some approaches to reform reflect the position that part of the insurance problem in the United States is that people have too much of it—that the presence of insurance has desensitized Americans to the cost of health care services, allowing both the demand for and the prices of medical care, whether necessary or unnecessary, to grow too quickly. Legislation may include provisions intended to encourage cost-consciousness in individuals' choices of health insurance and health care and include a group of approaches sometimes referred to as promoting "consumer directed" health care. Reducing the cost of health insurance. Some advocates of reform believe that the rising cost of health insurance must be addressed before other problems can be dealt with. Their reform approaches reflect the belief that more people will purchase insurance once more affordable plans are available. Thus, they assert reducing the number of uninsured is secondary to reducing the cost of the insurance. Cost-reducing approaches span the continuum, from preempting the application of state laws which increase the price of insurance, to establishing a single government payer for all health insurance. Advocates of single payer approaches believe such a system would improve administrative efficiencies, thereby reducing overall health insurance costs. Legislation has also been introduced in the 111 th Congress that features objectives related to improving the quality of medical care or the quality of health insurance products. Proposals to improve health outcomes, increase the availability of information about high-quality health care and providers, and establish disease management systems are raising interest among private insurers, government programs, and employers. These provisions alone, however, will not reduce the number of people without any insurance, and their effect on medical costs is as yet undetermined. What constitutes adequate health insurance is an important consideration that is beyond the scope of this report. Nonetheless, sponsors of bills extending coverage are likely to grapple with complex questions about the kind of coverage that should be extended. Sponsors of bills offering generous government subsidies for health insurance may feel that it is their duty to set a minimum standard for qualifying coverage as a way to ensure that taxpayers' funds are being used responsibly. One of the challenges of undertaking comprehensive health insurance reform is that every U.S. legal resident is a stakeholder whose individual preferences and needs may differ. Reform approaches reflect different choices about the relative importance of needs among stakeholder groups, including federal, state, and local governments, health care providers, medical researchers, insurance carriers, employers, workers, and consumers. Needs can vary considerably among stakeholder groups, and even within them. For example, health care consumers may prefer low-cost health insurance obtained through lower profits to health insurers while, according to standard economic theory, those health insurers will seek to maximize profits. Within consumer groups, there are healthy people who may prefer limited insurance coverage or none at all, while elderly or less healthy consumers may prefer more comprehensive coverage. Sometimes meeting the needs of one group can exacerbate the problems encountered by others. For example, requiring health care premiums to be community rated—that is, based on the average costs of everyone in a large group—can reduce premiums for individuals with expensive medical conditions. On the other hand, community-rated rates could lead to higher premiums for the healthiest individuals. Since the early 1990s, a number of incremental health insurance reforms have been enacted (see Text Box 1 ). Health insurance reform in the 111 th Congress may use a variety of approaches, ranging from incremental improvements that build on the nation's current patchwork of coverage to reforms of a much broader scope. A number of incremental reforms enacted over the past 15 years have improved the availability of health insurance for some populations. However, they have been built on a system in which some continue to have no access to any insurance and others to only unaffordable options, and the number of uninsured has continued to rise; such changes may also have exacerbated the loss of privately sponsored coverage. For example, a body of research has concluded that expanding Medicaid and the State Children's Health Insurance Program (CHIP) has generated some crowd-out of private coverage; on the other hand, children are the only subpopulation in which uninsurance rates have fallen over the past decade. Questions about the scope of reforms extend to the cost of the reform plans. At one end of the federal financing spectrum are approaches that feature subsidies for individuals to use toward the cost of health insurance. Such bills presume that a financial commitment from the federal government is essential to achieve universal or near-universal coverage, whether coverage is provided through government programs or private plans. A fair amount of research supports the notion that significant subsidies would be needed to induce many of the uninsured to purchase coverage. On the other end of the spectrum are a number of market reform approaches that reflect the position that government laws and regulations have raised the cost of insurance, reduced the number of options available to people, and created disincentives to purchase low-cost insurance. For example, state benefit mandates are blamed for increasing costs and reducing choices. Bills at this end of the spectrum aim to make the market for insurance work better, proposing to achieve higher coverage rates without subsidies because people would find health insurance products are more affordable by meeting, but not exceeding, their insurance needs. While the 111 th Congress is still relatively new, several health insurance reform bills have already been introduced.