What’s in the health care reform bill? It isn’t easy to get a concise version. But my brother wants one. So I spent my morning trying to put one together. Here it is. I am not 100% sure that all of this is correct, so I promise to update the body of the post should anyone bring any mistakes to my attention.
Subsidies:
The bill increases the limit for Medicaid to 150% of poverty, or $33,075 for a family of four. Right now the limit is at the poverty line (with some exceptions) or $22,050 for a family of four.
Families earning up to 400% of poverty ($88,200) will have their premiums and out-of-pocket expenses capped. The cap starts at 3% of income for non-Medicaid-eligible families and rises to 10% for families earning between $77,175 and $88,200.
Medicare will cover all prescriptions, eliminating the “donut hole.” Currently annual drug expenses are covered up to $2,700, and coverage kicks in again at $6,100, but Medicare recipients are responsible for expenses in-between. Medicare will be allowed to negotiate prescription drug costs.
Mandates:
Employers must offer insurance or pay a fee equal to a percentage of their payroll. Businesses with less than $500,000 in payroll are exempt. The fee will start at 2% of marginal payroll and rise to 8% for firms with more than $1.5 million in wages.
The penalty for failing to purchase insurance is set at 2.5% of income, up to a $750 per-person cap, or $3,000 for a family of four.
Insurance reform:
Insurers will be prohibited from discriminating on the basis of pre-existing conditions. Annual out-of-pocket costs will be capped on and lifetime benefit limits will be banned. Age-related premium increases will be capped at 200%.
All plans will have to meet a minimum “essential benefits” package.
A national Health Insurance Exchange will be created, which will provide a centralized market in which businesses with less than 100 employees and individuals can purchase coverage. No plans traded on the exchange will be allowed to cover abortion. Only legal residents of the United States will be allowed to purchase plans on the exchange.
The anti-trust exemption for insurance companies is eliminated.
A non-profit public plan will be available to anyone unable to purchase insurance on the exchanges or through their employer.
Revenue and cost reduction:
A 5.4% surtax will be imposed on incomes over $500,000 for single taxpayers, and $1 million for married couples. The fees mentioned under “mandates” will also generate revenue.
The government currently reimburses private plans that supplement Medicare (called Medicare advantage) by about 14% (or $1,100 per recipient) compared to what it costs to insure the same services directly. That difference will be eliminated.
The plan is expected to generate a surplus through 2023. (The annual surplus does not decline over time; rather, CBO projections end.)
Editorializing below the fold.


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