President Barack Obama signed a major health care overhaul bill Tuesday. Here are some of its features, along with details on a package of changes to the legislation under consideration by the Senate.
HOW MANY COVERED: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 94 percent of eligible non-elderly Americans will have coverage, compared with 83 percent now.
COST: $938 billion over 10 years for the coverage expansion, according to the Congressional Budget Office.
DEFICIT REDUCTION: CBO says the measure will reduce deficits by $143 billion over a decade.
INSURANCE MANDATE: Almost everyone will be required to be insured or else pay a fine, which takes effect in 2014. There is an exemption for low-income people.
INSURANCE MARKET REFORMS: Starting this year, insurers will be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents will be able to keep children on their coverage up to age 26. A new high-risk pool will offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards will also take effect in 2014. Insurers will be prohibited from denying coverage to people with medical problems or charging them more. Insurers will not be able to charge women more.
MEDICAID: Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults will be covered for the first time, starting in 2014. The federal government will pay 100 percent of costs for covering newly eligible individuals through 2016.
If the Senate approves a package of changes this week, a special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity would be eliminated. A different, one-time deal negotiated by Democratic Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million, would remain.
TAXES: The bill applies an increased Medicare payroll tax to investment income and wages of individuals making more than $200,000 a year, or married couples above $250,000. The tax on investment income would be 3.8 percent if the Senate acts on a package of changes this week — higher than originally proposed. If the Senate follows through, the legislation also would impose a 40 percent tax on high-cost insurance plans worth more than $10,200 for individuals and $27,500 for families. The tax would go into effect in 2018.
PRESCRIPTION DRUGS: Gradually closes the “doughnut hole” coverage gap in the Medicare prescription drug benefit that seniors fall into once they have spent $2,830. Seniors who hit the gap this year would receive a $250 rebate, if the Senate acts this week. Beginning in 2011, seniors in the gap would receive a discount on brand name drugs, initially 50 percent off. When the gap is completely eliminated in 2020, seniors will still be responsible for 25 percent of the cost of their medications until Medicare’s catastrophic coverage kicks in.
EMPLOYER RESPONSIBILITY: Employers are hit with a fee if the government subsidizes their workers’ coverage. Contingent on approval by the Senate this week, the $2,000-per-employee fee would be assessed on the company’s entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement.
HELP FOR SMALL BUSINESSES: Businesses with 25 or fewer employees that offer health coverage to their work force will get tax credits. The credits will start this year and rise in 2014 to a maximum of 50 percent of the cost of premiums offered by the smallest businesses, those with 10 or fewer workers.
SUBSIDIES FOR INDIVIDUALS: The aid is available on a sliding scale for households making up to four times the federal poverty level, $88,200 for a family of four. Premiums for a family of four making $44,000 will be capped at around 6 percent of income.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges, opening for business in 2014. The exchanges will offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms will not see major changes. But if they lose their jobs or strike out on their own, they may be eligible for subsidized coverage through the exchange, and insurers could not deny them coverage.
HOW IT’S PAID FOR: The legislation cuts about $455 billion over 10 years from projected payment increases to hospitals, insurance companies and others under Medicare and other government health programs. Revenue increases over 10 years include: $210 billion from increasing the Medicare payroll tax; $107 billion from fees on insurance companies, drug makers and medical device manufacturers; $32 billion from the excise tax on high-value insurance plans; and $2.7 billion from a tax on indoor tanning services.
GOVERNMENT-RUN PLAN: No government-run insurance plan. People purchasing coverage through the new insurance exchanges will have the option of signing up for national plans overseen by the federal office that manages the health plans available to members of Congress. Those plans will be private, but one would have to be nonprofit.
ABORTION: The bill tries to maintain a strict separation between taxpayer dollars and private premiums that would pay for abortion coverage. No health plan will be required to offer coverage for abortion. In plans that do cover abortion, policyholders would have to pay for it separately, and that money would have to be kept in a separate account from taxpayer money. States could ban abortion coverage in plans offered through the exchange. Exceptions would be made for cases of rape, incest and danger to the life of the mother.