Tuesday, December 22, 2009

Health Care Bill 101

Surely we all remember seeing the legendary School House Rock "I'm Just A Bill" Cartoon at some point in our youth during one of the many mornings we sat transfixed in front of the TeeVee...then again, for some of you Pokemon/Generation-Y folks out there, that may be before your time. At any rate, suffice it to say, it was a milestone in the civic education of millions of young Americans regarding the legislative process of how a bill becomes a law. Ironically, for many Americans, it was probably the last time they ever actually learned about the laws in Congress that effect their every day lives. Well today we can change that (if only for the small amount of time it will take you to read this post) by taking a look inside the infamous Health Care Bill.

Not to get too technical on you, but there are actually two Health Care Bills at the moment: one Bill that was vigorously debated and eventually passed (220 to 215) by the U.S. House of Represenatives on November 7 of this year (H.R. 3962: Affordable Health Care for America Act), and the other Bill is the one we're all hearing about now that just survived filibuster (60 to 40) in the U.S. Sentate yesterday (Monday, December 21) at 1 o'clock in the morning (H.R. 3590: Patient Protection and Affordable Care Act) and will be passed by the Senate as soon as the Republicans stop messing around with unecessary post-filibuster procedures and allow the final up-or-down vote to happen. (if you're wondering why the H.R. #'s don't match, there is a reason for that but I'll spare you the details here)

If we recall our "Just a Bill" cartoon lesson, both houses of Congress have to pass their own version of the Bill in order for it to go forward to be signed into law by the President. But what the Cartoon didn't tell us when we were pre-schoolers is that in order for a Bill to become law, each house must eventually pass IDENTICAL versions of the legislation before the President can sign it. Obviously the House Bill is currently different from the soon-to-be-passed Senate Bill. Once the Senate Bill is finally passed, the law requires the Senate and the House to sit down and compromise with each other in order to make both of their Bills say the exact same thing - this is known as the "Reconciliation Process." Lady Z did a post discussing that process here.

That being the case, I figured I'd take a few minutes and review what is contained in each bill (compiled from New York Times and Washington Post):


HOUSE VERSION
ISSUE
SENATE VERSION
Has a Public Option that sets up
health care exchanges run by the
Secretary of Health and Human
Services.
Public Option
No Public Option.
Requires individuals to purchase
insurance or pay a penalty of 2.5
percent of income. Employers must
pay 65% of family premiums or pay
a penalty based on payroll. Small
businesses with less than $500,000
on payroll are exempt and payrolls
up to $750,000 would have a reduced
contribution.
Mandate
Individuals must purchase insurance
or pay a penalty that would be the
greater of $750 or 2% of income by
2016. Does not require employers to offer health insurance.
Private health plans can choose
whether to cover abortion. The
Public Option will not cover abortions.
Abortion
Private health plans can choose whether to cover abortion.
Cover everyone with incomes less than 150 percent of the poverty level:
($33,075 for a family of four).
This will cover 15 million new Americans.
Medicaid
Expansion
Cover everyone with incomes
less than 133 percent of the poverty level:
($29,327 for a family of four). This
will cover 14 million new Americans.
Bans denial of insurance based on
pre-existing conditions. Premiums for
older people cannot be more than 2x
the premium for young adults. Bans
the antitrust exemption for health
insurance companies.
Insurance
Company
Regulations
Bans denial of insurance based on
pre-existing conditions. Premiums for
older people cannot be more than
3x the premium for young adults. Keeps
the antitrust exemption for health
insurance companies. Insurance
companies must spend 80-85% of
premium revenues on medical claims.
Can buy insurance from the public
exchanges, but can not get federal
subsidies to help pay the costs.
Illegal
Immigrants
Can not buy insurance from the
exchanges, even if they were able to
pay the full cost themselves, without
federal subsidies.
Available to people with incomes up
to 400 percent of the federal poverty
level ($88,200 for a family of four).
Tax Credits
for
Individuals
Available to people with incomes up to
400 percent of the federal poverty level
($88,200 for a family of four).
Employers with 25 or fewer workers
and average wages of $40,000 or less
would qualify for tax credits for up to
two years. The amount, up to 50 % of
premium costs, phases out as firm size
and average wages increase. The credit
would not be allowed for employees
earning more than $80,000 a year.


Tax Credits
for
Businesses
Employers with 25 or fewer workers
and average wages of $50,000 or less
would qualify for tax credits for up to
six years. The amount, up to 50 % of
premium costs, phases out as firm size
and average wagesincrease.
5.4% surcharge on taxpayers who earn
more than $500,000 a year, or
$1 million a year for families. Expected
to raise $460 billion from 2011 to 2019.
A 2.5 % excise tax on the medical
devices sold for use in the United
States. Expected to raise $20 billion
from 2013 to 2019.
Take $404 billion out of the projected
growth in Medicare and other federal programs over 10 years.



How is it
Paid For?
A 40 percent excise tax on so-called
Cadillac health plans — employer-
sponsored group health plans with
premiums over $8,500 for individual coverage and $23,000 for family.
Expected to raise $149 billion from
2013 to 2019.
Annual fees, allocated by market share,
on health care companies. Expected to
raise more than $100 billion from 2011
to 2019.
Take $483 billion out of the projected
growth in Medicare and other federal
programs over 10 years.
$1.052 trillion over 10 years.

Expected to reduce the deficit by $139 billion.

36 million people would gain coverage, leaving 18 million uninsured.


BOTTOM
LINE

$871 billion over 10 years.

Expected to reduce the deficit by $132 billion.

31 million people would gain coverage, leaving 23 million uninsured.





You may now return to your normally scheduled program (aka: ignoring Congress).
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