Health Care Reform: The Final Countdown?

In the days before a vote is expected, the near-final version of the health care reform bill seems to have taken shape. Before they fine-tune the bill, however, Democrats must wait for the cost assessment from the Congressional Budget Office. The main features of the bill at the time of this writing are highlighted below.¹
    Beneficiaries. Health insurance will be made available to more than 31 million uninsured or underinsured Americans.
    Insurance mandate. Almost every American will be required to be insured or pay a fine; there are exemptions for low-income persons.
    Insurance reform. Insurance industry practices such as denying coverage to persons with preexisting conditions or charging women higher rates than men for equal services will be prohibited. In addition, the federal government will have the authority to block rate hikes, roll back premium prices, and force insurers to provide rebates to consumers.
    Medicaid. The federal-state Medicaid program would be expanded to cover persons with incomes up to 133% of the federal poverty level, or $29,327 a year for a family of 4. The government would also pay 100% of the tab for newly eligible persons through 2017. While the deal giving Nebraska 100% federal financing of the state’s cost to provide Medicaid to newly eligible participants was eliminated, a similar deal negotiated by Sen Mary Landrieu (D) of Louisiana and worth up to $300 million remains.
    Taxes. A tax on high-cost insurance plans, or so-called Cadillac plans, has been scaled back and delayed from 2013 to 2018. The policy cost thresholds at which the tax would be imposed were moved up from $8500 to $10,200 for individuals and from $23,000 to $27,500 for families. These changes result in $120 billion in lost revenue over 10 years; this revenue will be recovered primarily from an increase in Medicare payroll tax to investment income and to wage income for individuals earning more than $200,000 and married couples earning more than $250,000.
    Prescription medications. The coverage gap in the Medicare prescription drug benefit will be eliminated. The Senate bill would have provided a 50% discount on the cost of brand-name medications during the coverage gap, but President Obama wants to close the gap entirely by 2020. The cost of eliminating the coverage gap has not been disclosed at the time of this writing, but an additional $10 billion in revenue from fees on the pharmaceutical industry are slotted to help pay for this.
    Employer responsibility. Businesses are not required to offer health coverage, but a fee will be imposed on companies with more than 50 employees if the government subsidizes employees’ coverage. The fees have been increased to $2000 per employee, up from $750, but companies will be granted an allowance that was not part of the original Senate bill. (For example, 2 part-time workers count as 1 full-time employee.)
    Subsidies. More generous subsidies for purchasing insurance will be provided, making aid available for households that earn up to 4 times the poverty level, or $88,000 for a family of 4.
    Choice. Small business, self-employers, and the uninsured can choose a plan offered through insurance exchanges, which are new state-based purchasing pools. Employees of large companies would not see significant changes.
    Government-run plan. The proposal does not include the “public option,” or the government-run insurance plan sought by many Democrats and approved by the House. Instead, Americans will have the option of purchasing coverage under a national plan that is overseen by the federal office that manages the government health plan that is available to members of Congress. These plans would be private and nonprofit.
    Abortion. No health plan would be required to offer coverage for this ever-divisive procedure. For those plans that do cover abortion, strict separation between taxpayer dollars and private premium funds would have to be maintained. States would also have the right to ban abortion coverage in plans offered through insurance exchanges, but exceptions would be made in cases of rape, incest, and danger to the life of the mother.

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Reference

1. Associated Press. A look at Democrats’ health care overhaul. March 15, 2010. http://www.google.com/hostednews/ap/article/ALeqM5hJ40t0N7wq4o5GLbWHhub2aY83CQD9EEUJM82. Accessed March 15, 2010.