Details Of The House Health Care Reform Bill

Proposal Includes Public Option, New Rules For Insurance Companies

Oct 31, 2009

That's what the Speaker of the House, Democrat Nancy Pelosi of California, says of the 1,990-page bill. She said it will reduce the deficit by $104 billion over the next decade. Republicans say the health care reform bill is too sweeping and they will introduce their own proposal.

Public Option

The public plan will be available only to people who are not insured by their employers, Medicare or Medicaid. The plan will be funded by $2 billion in federal start-up money and then paid for by premiums from those enrolled. The premiums are expected to be slightly higher than average premiums for employer plans. The bill also creates a Health Insurance Exchange, starting in 2013, in which people can choose among the public plan and several private plans. These exchanges are expected to eventually replace some employer health plans. The federal government will develop a minimum plan that all public and private plans would have to meet.

Employer Health Plans

Employers can provide benefits for their employees. Or companies can default to the public option or an exchange plan and pay 2.5 percent of their adjusted gross income above an as yet unspecified level. Small businesses with payrolls below $500,000 are exempt from this requirement. A new small business tax credit will be provided to slightly larger companies to offset benefit costs.

Rules for Insurance Companies

The bill prohibits insurance companies from refusing coverage for individuals in poor health. It also forbids insurers from refusing to cover treatments for pre-existing conditions and from putting annual or lifetime limits on benefits. Premiums can be determined only by the insured’s age, geographical location and family size; health status, gender and other factors can no longer be figured in. Young adults may be covered on their parents’ policies until age 26. The bill makes the insurance companies subject to antitrust laws and requires them to spend 85 percent of their income on benefits.

Rules for Individuals

Individuals must either obtain insurance coverage or pay 2.5 percent of their adjusted income above the income tax filing threshold. The Medicaid program, which covers low-income individuals, will be expanded to those with incomes up to 150 percent of the poverty line ($33,075 for a family of four). Subsidies will be provided for people earning between 150 percent and 400 percent of the poverty line, ($88,000 for a family of four). At the other end of the spectrum, big earners ($500,000 for an individual or $1 million for a couple) will pay a 5.4 percent health care tax.

Medicare Recipients

The bill calls for an array of new benefits for Medicare recipients, including closing the “doughnut hole” that cuts out all subsidies for prescription drug costs between $2,700 and $6,154. But it calls for $400 billion to be cut from Medicare over 10 years, much of it from the Medicare Advantage plan, under which seniors enroll in HMOs that administer their benefits.

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Nov 6, 2009 12:09 PM

Guest :

What I want to know "why this bill is being forced on all of us". I didn't want this bill and there has been no transparency from the Dems on this bill. Now it comes out, that illegal aliens will be covered so what was said about the president is true he lied to all of us about the this bill on national television. Uh, I wonder what else he and Pelosi are lying about. This country is being taken apart piece by piece, and so many of you have bought into it. And I'm not saying that the Republicans are the right party either they also have a lot of fault in this. I thing it's high time for term limitations for congress and the senate, don't you?