Health Care Reform Becomes Law
In a remarkably partisan vote, Congress passed landmark health care legislation in March 2010. The new legislation addresses two of the major health care controversies: coverage for the uninsured and a form of "Patient Bill of Rights". It is very questionable whether it effectively addresses a third major problem: the relatively high cost of medical care in the United States when compared to other industrialized countries. On the contrary, the expanded coverage requirements may increase the cost of health care as a percentage of the GDP.
The following summarizes some of the key provisions:
:Coverage requirements:
All must obtain health insurance or pay tax penalties. The penalties will be phased in between 2014 and 2016. The types of insurance plans available will vary; there will be an option to purchase catastrophic coverage only.
Government assistance with purchasing insurance:
Available to persons or families with income below 400% of the Federal Poverty Level ($73,243 for a family of three). These persons will receive tax credits to help with the purchase of insurance. The amount of the tax credits will vary based on the income level.
Mechanisms:
The lower cost, government assisted insurance plans will be through state-based insurance exchanges. These will be primarily operated by nonprofits and their plans will be available to individuals and to employers with less than 100 employees.
Insurance regulation:
Insurance plans forbidden from rejecting applicants due to preexisting conditions. Elimination of dollar caps on coverage.
Employer requirements:
Employers with 50 or more employees must provide health insurance as part of compensation or pay fine. The requirement may be met by facilitating a low income employee's participation in the government-assisted insurance exchange program. Employers with more than 200 employees must provide health insurance. Employers to receive tax credits to assist in meeting the coverage requirements.
Medicaid Expansion:
Effective 2014, government provided health care will become available to all persons with income less than 133% of the federal poverty level ($24,407) for a family of three. Presently such coverage is only available to children, seniors, and disabled persons. Most of the expanded coverage will be financed primarily with federal funds, not state funds.
Abortion:
Limits the extent to which federal subsidies will be available for this procedure to saving the life of the woman or cases of rape or incest
Financing the reform:
New taxes on health care providers and pharmaceutical manufacturers. Limits on the tax deductibility of health insurance by employers to high income employees. There is a 0.9% increase in Medicare payroll taxes for Americans who earn more than $200,000 annually individually and $250,000 for couples.
Medicare:
Detailed provisions and incentives to achieve greater cost containment in the Medicare program. The "doughnut hole" in the prescription drug coverage has been closed, amounting to a substantial savings for seniors.
