A summary of the health care change we got

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With the health care reform overhaul near complete, here’s a thumb-nail summary of the combined provisons in the reconciliation bill HR 4872 and and the new health care law it amends, prepared by CQ (subscription wall):


Extends health insurance coverage to about 32
million people who currently lack it, leading to coverage of about 94
percent of Americans. The cost of coverage expansions will total $940
billion from fiscal 2010 to fiscal 2019. But taking into account the
changes to mandatory spending and tax law, the overhaul will reduce the
deficit by a net $138 billion over the same period.

Creates state-based exchanges, or marketplaces,
where individuals without employer-provided insurance can buy health
care coverage. Federal subsidies will be available to help cover the
cost for individuals who earn between 133 percent and 400 percent of
the federal poverty level (or $24,352 to $73,240 for a family of three
in 2010).

Expands Medicaid eligibility to all individuals
with incomes of up to 133 percent of the federal poverty level.
Specifies that in all states, the federal government will cover the
entire cost of coverage to newly eligible people from 2014 through
2016. In 2017, federal matching funds for all states will cover 95
percent of the costs for the newly eligible people. The rate would be
94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and

Provides a one-time, $250 rebate for Medicare beneficiaries
who fall into a prescription drug coverage gap known as the “doughnut
hole” in 2010 and seeks to eliminate the gap entirely within 10 years.
Starting in 2011, the overhaul creates a discount of 50 percent on
brand-name drugs for beneficiaries who fall into the gap. The discount
will increase to 75 percent by 2020, with the government paying the
rest of the cost of the drugs.


Imposes new regulations on health insurance companies.
Beginning six months after enactment, health insurers may rescind group
or individual coverage only with clear and convincing evidence of fraud
or intentional misrepresentation by an enrollee. Insurance plans also
are required to allow parents to continue coverage for dependent
children who would otherwise not have health insurance until a child
reaches his or her 26th birthday. Insurers are barred from setting
lifetime limits on the dollar value of health care. And they also may
not set any annual limits on the dollar value of health care provided,
effective six months after enactment.

Requires individuals to obtain health insurance or pay either $325 or 2 percent of income, whichever is higher, in 2015. Fines will increase in subsequent years.

Penalizes employers with more than 50 workers who
have employees who obtain subsidies to purchase coverage through the
exchanges. Companies that offer health care benefits face a penalty of
either $3,000 for each employee (full-time or part-time) who receives a
subsidy or $750 per full-time employee, whichever would be less.


Imposes an excise tax on high-cost health care plans
— the so-called Cadillac plans — beginning in 2018. The tax will apply
to plans costing $10,200 for individual coverage and $27,500 for family

Increases the Medicare payroll tax for
individuals making more than $200,000 and couples making more than
$250,000 and imposes an additional 3.8 percent surtax on investment

Creates a 2.9 percent tax on the sale of any taxable medical device,
excluding less invasive and risky products classified as Class I by the
Food and Drug Administration. The tax also will not apply to
eyeglasses, contact lenses and hearing aids.

Imposes new fees on health insurers. Beginning in
2014, an annual flat fee of $8 billion will be levied on the industry.
It rises to $11.3 billion in 2015 and 2016, $13.9 billion in 2017, and
$14.3 billion in 2018. In 2019, these fees will be adjusted by the same
rate as the growth in health insurance premiums.

Levies annual industrywide fees on brand-name drugs
totaling $2.5 billion in 2011, $3 billion from 2012 through 2016, $3.5
billion in 2017, $4.2 billion in 2018, and $2.8 billion in 2019 and
later years.

Requires a reduction in federal matching payments
to states for Medicaid DSH payments, which are additional
reimbursements for hospitals that serve a disproportionate share of
low-income individuals. Specifically, the measure requires a reduction
in DSH payments by $14.1 billion from fiscal 2014 through fiscal 2019.

Consumer Watchdog
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