Senate Majority Leader Harry Reid, D-Nev., on Wednesday released his proposal to overhaul the nation’s health care system.
The bill, which the Senate voted Saturday to begin debate on, would expand health coverage for the poor and provide subsidies for millions of others to help them buy policies on a government-regulated insurance exchange. It would prevent insurers from hiking rates based on health status and would end the practice of rescissions, where insurers cancel policies for people who failed to report details of their medical history.
The bill is estimated to cover 31 million uninsured Americans and to cost $848 billion over 10 years. The Congressional Budget Office projects that it will decrease the federal deficit by $130 billion by 2019.
Debate on the bill is expected to resume after the Thanksgiving holiday, with senators offering amendments to modify the legislation. A final vote could come shortly before Christmas. Once the Senate agrees on a bill, the House and Senate leadership will meet to reconcile differences between the chambers’ bills. That process is expected to begin after the New Year.
In the meantime, here’s a detailed look at the bill and what it could mean for you, depending on your income, age, job status and current insurance:
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What would affect everyone
* Eliminates pre-existing condition exclusions so that you can no longer be denied coverage
* Caps what you can be required to pay in out-of-pocket expenses
* Ends lifetime limits on benefits
Other changes under the bill
Are you now insured?
You already buy your own insurance or you get it through your employer.
If your employer provides insurance, you should be able to keep your it, but you should be aware of the …
‘Cadillac’ plan tax
Under this Senate proposal, you could see your plan taxed at a rate of 40 percent for every dollar that exceeds $8,500 per year for individual coverage and $23,000 per year for family coverage.
* That threshold would be $1,350/$3,000 higher for plans that cover the retired or employees in high-risk professions.
* Taxes would be paid by insurers or plan administrators, but could cause your insurer or employer to stop offering your current plan.
If your employer offers health insurance but does not pay at least 60 percent of the cost, or if the cost exceeds 9.8 percent of your income, you may qualify to buy subsidized insurance on the exchange.
If you currently buy your own insurance, you would likely go to the exchange to buy a policy. Depending on your income, you may qualify for a subsidy to help pay your premium.
Are you now uninsured?
You don’t have insurance because you’re self-employed or unemployed and can’t afford to buy insurance, or because your employer doesn’t offer it.
YOUR INCOME LEVEL
Individual
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Family of four*
* Based on a family of four with a 50-year-old head of household
Medicaid
If you are an individual who makes less than $14,404, or if you have a family of four with income less than $29,327, you would qualify for Medicaid by 2014.
Estimated number of people who would be newly eligible for Medicaid (including children who would join the Children’s Health Insurance Program): 15 milllion
Subsidies
If you are an individual who makes between $14,404 and $43,320, or if you have a family of four with income between $29,327 and $88,200, you qualify for government subsidies to help you buy a policy.
Estimated number of people this could affect: 25 million
Because of a practice called age rating, individuals who are closer to 19 should expect to pay the lower number listed in the ranges above, while indiduals who are closer to 64 should expect to pay the higher number.
Individual income: $17,328
You pay: $849
Individual income: $21,660
You pay: $1,365
Individual income: $27,075
You pay: $2,180
Individual income: $32,490
You pay: $2,637-$3,184
Individual income: $37,905
You pay: $2,637-$3,715
Individual income: $43,320
You pay: $2,637-$4,245
Family income: $17,328
You pay: $1,729
Family income: $44,100
You pay: $2,778
Family income: $55,125
You pay: $4,438
Family income: $66,150
You pay: $6,483
Family income: $77,175
You pay: $7,563
Family income: $ 88,200
You pay: $8,644
If you make more than $43,320/$88,200 and your employer doesn’t offer you health insurance, you can buy a policy on the exchange, but will not be eligible for a subsidy. Individuals would likely see premium costs of $2,637-$7,911 and a family of four would pay $7,108-$21,325, depending on the age of the policy holder.
Estimated number of people this could affect: 5 million
Are you concerned about Medicare?
You are a senior citizen on Medicare or are reaching Medicare age and want to make sure your benefits will be there when you need them.
MEDICARE ADVANTAGE
These are private insurance alternatives funded through Medicare that typically offer more generous benefits than standard Medicare. The bill would change the payment rates for these plans, which some people say could limit the availability of the plans in future years.
CUTTING COSTS
The bill would also establish a commission to find ways to cut costs in Medicare. The commission is likely to recommend reductions in the subsidies for additional benefits that are beyond the standard Medicare benefit package and to change payment rates for some services.
MEDICARE PART D
In 2010, the government will extend from $2,700 to $3,300 the amount that seniors can spend on drug costs and receive a subsidy of 75 percent. For drugs bought in the “doughnut hole” coverage gap, drugmakers will be required to provide a 50 percent discount on those drugs.
Major funding sources
With expected yield totals for 2010-19
YIELD
Figures shown here represent revenues and savings that would go toward paying for the cost of expanding coverage.
INDIVIDUALS
Penalties of as much as $750 per adult who doesn’t get insurance, with some exceptions.
Yield: $8 billion
Increase in the Medicare payroll tax from 1.45 percent to 1.95 percent for individuals/couples making more than $200,000/$250,000
Yield: $54 billion
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EMPLOYERS
Yield: $28 billion
Employers that don’t offer health benefits and have more than 50 full-time employees will be charged a fee of $750 per employee if any employee receives subsidized insurance through the exchange.
Employers who offer health benefits must pay 60 percent of the cost and the employee portion of the premium must not exceed 9.8 percent of income. Employees whose employer-sponsored plans don’t meet these requirements would be eligible to buy subsidized insurance on the exchange. Their employer would be charged a fee of $3,000 for each employee receiving a subsidy or $750 for all employees in the firm, whichever is the smaller amount.
INDUSTRY
Yearly fees on pharmaceutical companies ($2.3 billion), health insurers ($6.7 billion) and medical device makers ($2 billion)
Yield: $102 billion
40 percent excise tax on every dollar above the threshold for so-called Cadillac plans, policies with yearly premiums of more than $8,500 for an individual and $23,000 for a family.
Yield: $149 billion
Hospitals that currently receive payments from the government to compensate for the care they provide to low-income patients and the uninsured would see those payments reduced as more people become insured.
Yield: $43 billion
REDUCED MEDICARE SPENDING
Medicare payment rates for hospitals, nursing homes and other providers would be reduced over the next 10 years.
Yield: $192 billion
Reduced Medicare Advantage program payment rates.
Yield: $118 billion
Key differences between House and Senate bills
ABORTION LANGUAGE
Both bills attempt to prevent federal funds from being used to pay for abortions. This issue is complicated because people who receive government subsidies to buy insurance would also be paying some of their own money to buy a plan
SENATE: Requires insurers, whether they are public or private, to segregate federal money from premium revenues in separate accounts to ensure that only private funds are used to cover abortions
HOUSE: Prohibits insurance plans from offering abortion coverage to anyone who receives federal subsidies, even if the customer would be willing to pay for the coverage out of her own pocket. Also prohibits a government-run insurer (the “public option”) from offering abortion coverage
Government-run “public option”
SENATE: Creates a government insurance plan to compete with private insurers, but allows states to opt out
HOUSE: Creates a government insurance plan to compete with private insurers
Major funding sources
SENATE: Taxes industry and increases Medicare payroll tax for the wealthy
HOUSE: Taxes people with yearly incomes over $500,000 and couples with incomes over $1 million
Requirements for individuals
SENATE: Requires individuals to carry insurance or pay a fee of up to $750
HOUSE: Requires individuals to carry insurance or pay 2.5 percent of income
Requirements for businesses
SENATE: Does not explicitly require businesses to provide health insurance, but imposes penalties if employees receive government subsidies to buy coverage
HOUSE: Requires employers to provide health insurance to employees or pay a fee
SOURCE: Tribune Newspapers reporting
5 things you might not know about the Senate bill
1. Charges a 5 percent tax on elective cosmetic surgery.
2. Small employers that offer health insurance would be eligible for a tax credit.
3. Adults younger than 30 would be offered the option of a lower-cost catastrophic plan that would meet the requirement to carry insurance.
4. Under Medicare, hospital payments will be pegged to a hospital’s percentage of preventable readmissions.
5. Providers at long-term care facilities will be subject to background checks.