A divisive $875 billion health reform legislation that promises to expand health insurance to cover 32 million uninsured Americans passed the House by 219 to 212 late Sunday night.

In a rare Sunday vote that split along party lines, the House adopted the Senate health bill as well as a reconciliation package meant to bridge differences between the House and Senate legislation. All 178 Republicans, and 34 Democrats who jumped the aisle, opposed the bill.

"Tonight, after nearly 100 years of talk and frustration, after decades of trying, and a year of sustained effort and debate, the United States Congress finally declared that America's workers and America's families and America's small businesses deserve the security of knowing that here, in this country, neither illness nor accident should endanger the dreams they've worked a lifetime to achieve," President Obama said in a speech Sunday night.

On Tuesday, Obama is expected to sign the bill on the White House lawn, after which the reconciliation package, which passed 220 to 211 in a separate vote, will go to the Senate for debate.

Hurdles remain

However, hurdles remain for both pieces of the reform legislation. The reconciliation package, which can't be approved by the Senate until President Obama signs the bill, will face a tough fight, as Republicans Senators are keying-up to delay or thwart its passage.

Under Senate rules, there must be at least 20 hours of debate on the reconciliation package, but Republicans could offer unlimited amendments in an effort to derail the discussion. While under parliamentary rules Democrats could override the Republicans, it would require votes from three-fourths of the body, meaning they would need to lure some Republicans in support of the legislation.

And larger battles lie ahead for the reform bill itself. Attorneys general from Virginia, South Carolina and Florida have pledged to file lawsuits, alleging the bill is unconstitutional because it requires citizens to purchase health insurance.

Details of the bill

The legislation and the reconciliation package passed on Sunday aim to expand health care coverage over the next decade to some 32 million Americans who are currently uninsured. The bills do this largely by expanding Medicaid rolls, covering anyone who makes up to 133 percent of the poverty line, and also requiring almost everyone to carry insurance under threat of an annual fine. The size of the fine is set to rise every year, starting in 2014 at $95, or one percent of income, whichever is greater, and in 2016 capping at $695, or 2.5 percent of income.

For those too poor to buy health insurance and who aren't covered by employers or eligible for Medicaid or Medicare, the government will offer subsidies. According to the plans, those making between 133 and 400 percent of the poverty level will be able to buy subsidized insurance from state-run insurance "exchanges." By 2014, similar exchanges will be created for small businesses to buy insurance for their employees, but starting this year, business employing less than 25 people are eligible for up to 35 percent tax credits for covering workers' health insurance premiums.

The legislation also strengthens coverage for children, young adults and those with pre-existing conditions. Six months after passage, insurance companies can't deny coverage to children based on pre-existing conditions, and in 14 years won't be able to deny it to anybody with pre-existing conditions. Children can also stay on their parent's plan until they turn 26.

In order to rally many Democrats, the package also scuttled a widely loathed exemption for Nebraska from all new Medicaid expenses, widely referred to as the "Cornhusker kickback."

And to rope in conservative Democrats wary of seeing public money going to pay for abortions, the package makes clear that abortions are not covered by insurance provided through the state-run exchanges, except in cases of rape, incest or risk to the mother's life.

Dollars and sense

The bill bears a hefty price tag, around $875 billion, with an additional $65 billion from the compromise package.

Funding for the legislation comes from a new 3.8 percent tax on investments for individuals making more than $200,000 and families making more than $250,000. Most controversially, the bill also slaps a 40 percent excise tax on so-called "Cadillac" insurance plans worth over $27,500 for families, although the reconciliation package delays the tax until 2018, giving Congress plenty of time to kill the tax.

The bills also hit indoor tanning salons with a 10 percent excise tax.

Although pricey, the non-partisan Congressional Budget Office expects the bill, plus changes from the reconciliation package, to actually help the government save money, by slashing the federal deficit by $143 billion from 2010 to 2019, and then by more than $1 trillion in the following decade.

In part, the savings come from scale-backs to Medicare as well as changes in the way the government funds college education. Under proposed reforms in the reconciliation package, the federal government will no longer guarantee student loans provided through private banks, but will instead administer the same loans directly to student borrowers, while also increasing the Pell Grant program. The CBO estimates these changes alone will result in over $19 billion in savings.

Nonetheless, critics of the bill are quick to point out that CBO estimates assume that certain politically unpopular measures - cuts to Medicare and taxes on the "Cadillac" health care plans, often held by union members - will be made. If not, the bills will "substantially increase the deficit," in the words of Megan McArdle, a columnist for the Atlantic, writing online for the Washington Post on Sunday.

Reactions

On Monday morning, Health and Human Services Secretary Kathleen Sebelius told CBS's "The Early Show" that once people learn more about the legislation, and despite a campaign to "confuse and scare Americans," they'll like it.

Others are not so sure. McArdle, a writer with libertarian views, worries that the bill's 3.8 tax on investments will cut into innovation - and raise rents.

"It's pretty distressing that they've chosen to fund so much of this through capital income - the new 4% surcharge on royalties, rents, interest and dividends. There's a reason that even countries like Sweden tend to go light on their capital taxes; capital is mobile, and it's easy to chase away," she writes for the Post.

She emphasizes that the tax hike won't just stick it to the rich, either. "Renters will be glad to know that as soon as it takes effect, that 4% tax increase is probably going to show up as an increase in your annual rent, above and beyond whatever increase they were already planning," she adds.

Some progressives aren't much happier. Blogger Chris Crotty, a political campaigner who writes for San Diego News Network, argues that the bill "will have little or no affect on the vast majority of U.S. citizens."

"Calling the legislation 'health care reform' is a misnomer," he writes in his online column on Monday. "What the bill achieved was minor meddling with health insurance."