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Mar. 19 2010 - 11:39 am | 3,857 views | 4 recommendations | 15 comments

A short summary of the health care reconciliation bill

Here are the ‘fixes’ the House has added to the Senate Bill. Should the bill pass the House – the vote expected to take place on Sunday – these items will go to the Senate where the Democrats will attempt to pass them via reconciliation.

-Better tax credits for low income and middle-income families to help pay insurance premiums.

Individuals earning less than $41,500, or a family of three earning less than $70,400, will receive a higher tax credit than what had originally been granted in the Senate Bill.

-Six months after the bill is enacted into law –

- All existing and future health insurance plans are prohibited from imposing lifetime limits on payouts.

- All existing and future health insurance plans are prohibited from denying coverage to children with pre-existing health conditions. Insurance companies will be barred from denying coverage to adults with pre-existing conditions beginning in 2014.

- Children up to age 26 can remain on their parent’s insurance policies.

- Annual limits on what an insurance company will pay will be restricted and will be prohibited completely beginning in 2014.

-Modifications to the “Cadillac tax”-

This tax on higher priced insurance policies has been pushed five years and now won’t go into effect until 2018. The thresholds for the tax have also been raised, now applying to individual policies that cost $10.200 or more and family policies costing $25,500 or more. Under the new numbers, the value of dental and vision plans (often provided by the large union plans) will not be included in determining if a policy reaches the threshold for the tax.

-Higher Tax on people earning over $200,000 to make up for the scaled back Cadillac tax.

To continue to make the numbers work, the money lost by delaying the Cadillac tax on high end policies had to be made up somewhere. So, for those individuals earning $200,000 or more year, and couples who earn $250,000 or more, the current Medicare tax deducted from paychecks in the amount of 1.45% will rise to 2.35%.

-Lower penalty for those who choose not to buy health insurance for most people.

The flat payment annual penalty is reduced to$695 by 2016 or 2.5% of income by 2016. Penalty for a family is the greater of 3 times the individual flat fee penalty $2,085 or 2.5% of household income.

-Increases penalties for large employers (50+ workers).

Large employers will have to pay a fee of $2,000 per employee if they do not offer health coverage.

-Ends the Part D Medicare Donut hole.

For seniors who fall into the donut hole in 2010 (the gap in pharmaceutical coverage), the government will provide a rebate in the amount of $250.00. The donut hole will be closed completely by 2020.

- Raises payments to primary care physicians for Medicaid patients.

Beginning in 2013, payments to primary doctors seeing Medicaid patients must be 100% of the Medicare rate for treatment. This is important as it will help stem the loss of doctors refusing to see these patients due to poor payment.

-Kills the Cornhusker Compromise while picking up the full tab for Medicaid expansion.

While the offensive deal made in the Senate will disappear, the federal government will pick up 100% of the costs states incur through expanding Medicaid to cover more people as required in the Senate bill.


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  1. collapse expand

    “Individuals earning less than $41,500″

    Woohoo! Later this year I’m hoping to get into private investigation, which isn’t great on pay or benefits. Being able to afford decent health insurance should feel great. Perhaps I’ll start a non-profit to help conservatives adjust to this new economic reality. “Hi, I’m Bill, and I’m a conservative. I used to have to work crap jobs with huge companies like Hertz and Wal-Mart to get health insurance, but now I don’t know. I can still get health insurance if I start a small business or join one. I used to come home proud of a hard day’s work and dreading the next day’s monotony, but now I come home resenting work and wanting something more fulfilling, like I imagine they feel in Europe. The other day I saw a girl with a lip piercing and thought it looked kind of cute; please, I think I need help…”

    “Children up to age 26 can remain on their parent’s insurance policies.”

    Is including your 26th year, or would coverage end when you hit 26?

    “…picking up the full tab for Medicaid expansion.”

    Are there any stipulations as to milestones states must meet as they begin taking on some of the Medicaid cost, or are they free to screw around until it’s time to start paying for things themselves, like many states seem to be doing with funding from the Stimulus?

  2. collapse expand

    Another helpful post.

    As we come to the end of this battle (hopefully) I would just like to take this time to thank you for sorting through the lies and half truths and hypocritical posturing and political gamesmanship and procedures and translating the obscure and baffling legalities and clarifying the various positions and sorting through the logical and illogical. Also great thanks for steering me through my own misconceptions and talking me down from my rants and bursts of nonsense. Your posts have been clear and rational, even when being rational is completely infuriating, it has been an enlightening and often entertaining ride. I look forward to the next crusade.

  3. collapse expand

    Thanks for the hard work you have done on this topic, it was very helpful to many. I feel the topic is soon to be over, I will just wait and see what your new writing interest will be!

  4. collapse expand

    Rick, I have a question for you, will the “tax credit” for lower income families help enough?

    • collapse expand

      Hard to say if it will help ‘enough’. I think it will help. And don’t forget that there are additional government subsidies coming as direct payments. So much of this is going to be trial and error where some things will work better than expected and some will come up short and need revising. It will be an on-going process.

      In response to another comment. See in context »
  5. collapse expand

    Let me add my thanks to the above, and warn you that should the bill pass, your work explaining it will have just begun. I doubt that you’ll get much time to worry about financial reform.

  6. collapse expand

    I’m a common American. I have 2 kids and a wife of 10 years. We are planning a family trip to Disneyland sometime in the summer.

    I have some questions about this bill.

    Let me start with this statement. We (my wife and I) work on a daily basis. We pay our bills and own our home we have worked hard to get to the spot in life we are now. We both have heath care for our self and the entire family though our employer.

    The other day we went to the doctor for some minor rash that my wife developed out of nowhere. We turned in our insurances and had $0 copay for the specialist and primary care physician she saw. We went to the pharmacy and turned in the scrips she got and her insurance did not cover the script but my insurance did. There was $0 copay for it. If we did not have the second coverage then it would of been close to $120 for that script. She called her insurance to find out why it was not covered and it was due to the fact it was a antihistamine that they say can be obtained over the counter. After 2 days the rash cleared up and all was well.

    But the reason I bring this up is to ask some questions about the plan it self.

    What does it cover and what does it not cover?
    Other the the over $200,000 income tax is there any additional costs?
    Would we be able to switch from our employers HMO to PPO?
    What sort of tax would our employer incur?

    Another set of questions arise form listing to whats been said.
    What is the effect on school loans?
    What sort of pay downs to single states are included?
    What are the going to be copay?

    I would like to get some clear answers on these itmes. Thank you for your time.

    • collapse expand

      I”ll try to answer your questions as best I can in this limited space.

      What does it cover and what does it not cover?

      That’s a broad question! if you research the pieces I’ve done here on True/Slant you can find the answer. I just could not lay out the entire bill in this comment response.

      Other the the over $200,000 income tax is there any additional costs?
      Shouldn’t bet to you as an insured. If you were to choose not to purchase health insurance, you would be subject to the penalty for not having it as it will now be mandated. But if you continue your insurance, no costs.

      Would we be able to switch from our employers HMO to PPO?

      That is between you and your employer. The legislation does not get into that.

      What sort of tax would our employer incur?

      An increase in the Medicare payroll tax. If your employer has less than 50 employees, there should be any others. If more there are some obligations. Also, if they are providing the so called ‘cadillac policies”, ie. policies that are expensive, there will be a tax on these down the road, but not until 2018.

      What is the effect on school loans?
      Nothing on any loan you currently have. It affects the government subsidies of the corporations in the business of providing school loans using government money. Up until now, they’ve been paid a very nice sum by the government to hand out student loans using government money. Going forward, if the legislation passes, the government will do it themselves and save the fees they’ve been paying.

      What sort of pay downs to single states are included?

      I assume you are asking about Medicaid. the federal government will pick up 100% of the extra costs of the expanded medicaid system that is being put into law to cover more people. Up until now, it’s been about 50-50 between states and feds to pay for a state’s medicaid program.

      What are the going to be copay?
      Again, that depends on the policy you are provided by your employer.

      In response to another comment. See in context »
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    About Me

    I am an attorney in Southern California, and a frequent writer, speaker and consultant on health care policy and politics. To that end, I am active member of the Association of Health Care Journalists. Based in beautiful Santa Monica, California, I'm very pleased to have the opportunity to be a contributing editor to True/Slant. I've recently finished a book designed to make the health care debate understandable to the average reader, and expect it to be out in the next five months or earlier. In my 'spare time', I continue to write for television and, occasionally, for comic books.

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