Health Reform Watch: Health Care Helps Bring Down Deficit Plan; Judge Rules for Reform in Virginia

BY Lea Winerman  December 3, 2010 at 4:47 PM EST

Citing Health Care, Republicans Say No to Deficit Plan

President Obama’s bipartisan Deficit Commission failed to get the 14 votes necessary to send its deficit reduction plan to a full vote in Congress. The plan made major cuts in federal spending across the board, including in health care. It would gradually phase out employer health benefits’ tax-free status and, for the first time, set cap on how fast Medicare’s budget could grow.

Two of the Republicans who voted against the plan cited health care as their reason. Rep. Paul Ryan of Wisconsin said the bill didn’t do enough to address the rising costs of health care, and Rep. Jeb Hensarling of Texas said that it would “accelerate the arrival of Obamacare,” Politico reported.

Federal Judge Throws Out Health Reform Challenge in Virginia

The judicial battle over health care reform continued this week with a victory for the Obama administration. A federal judge on Tuesday ruled against Liberty University, a Christian college in Lynchburg, Va. The school had argued that the law would require it to offer insurance that covered abortions, and also that the individual mandate is unconstitutional. The judge rejected both claims.

The ruling follows a Michigan judge’s similar decision in October. But other judges have allowed two higher-profile challenges to move forward — one brought by Virginia Attorney General Ken Cuccinelli, and one brought by a multi-state coalition of attorneys general led by Florida’s Bill McCollum. U.S. District Judge Henry Hudson has said he will make a ruling Cuccinelli’s lawsuit this month.

New Guidance for Small Businesses

The IRS on Thursday released new guidance to help small business claim a 2010 tax credit for providing health insurance to their workers. Businesses with up to 25 employees that pay less than $50,000 average wage can qualify for the tax credit, on a sliding scale.