The Senate’s health reform package is scheduled for delivery on Christmas
Eve. Senators are expected to take a final vote that day on legislation to
overhaul the nation’s health care system. And if the Democrats’ shaky coalition
holds, the bill should pass.
It’s projected to extend coverage to 31 million more people, raising the
percentage of insured Americans to 94%. The legislation also aims to curb the
relentless rise in health care costs, though critics question whether the plan
will produce much savings.
Here are the major elements of the Senate reform plan:
How to Protect Your Health Care in a Rough Economy
Financing
The legislation, at a cost of $871 billion over 10 years, will be financed
by taxes and fees, Medicare reductions, and at least one quirk.
To pay for coverage expansions, more than $400 billion will be cut from the
Medicare program. The Senate bill also raises the Medicare payroll tax for
individuals making at least $200,000 a year and couples earning at least
$250,000, from 1.45% to 2.35%.
One key provision creates a new excise tax on high-cost “Cadillac”
benefits. Health plans valued at more than $8,500 for individuals and $23,000
for families would trigger the tax, though some occupations would be
exempted.
Along with these new levies, medical industries — from drug manufacturers
to medical device makers — would pay annual fees. Also, as a last-minute
addition, tanning-salon treatments would draw a 10% tax, replacing a proposed
levy on elective cosmetic medical procedures.
Main Provisions
Insurer prohibitions: The Senate bill would bar health insurance
companies from discriminating against people with pre-existing conditions. No
longer could an insurer deny coverage to them.
It also would end premium differentials based on gender. Insurers could no
longer set lifetime limits on coverage, and would be restricted on how much
they charged older people. And the bill would also require insurers to spend at
least 80% of their premium revenues on medical care.
Exchanges: States would establish new health insurance marketplaces
where the uninsured, individuals, and small businesses could shop for health
plans.
Subsidies: Lower- and middle-income individuals would receive
government subsidies to afford health insurance. They would be available to
people with incomes up to 400% of the federal poverty level ($88,200 for a
family of four).
Requirements for individuals: Most uninsured adults would have to
purchase health insurance or face paying a penalty, which would begin at $95 a
year per person in 2014, and rise to $750 or 2% of a household’s income,
whichever is greater, in 2016 and beyond.
Employer mandates: Companies with more than 50 full-time workers must
offer health insurance or pay a fine if an employee obtains a subsidy for
coverage through the insurance exchanges. Smaller businesses, meanwhile, would
get tax credits to offer coverage.
Medicaid expansion: People with income up to 133% of the federal
poverty level ($29,327 for a family of four) would be eligible to join
Medicaid, the government insurance program for low-income Americans.
