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WASHINGTON — A transformative health care bill is headed to President Barack Obama for his signature as Congress takes the final steps in Democrats' improbable and history-making push for near-universal medical coverage.
On the cusp of succeeding where numerous past congresses and administrations have failed, jubilant House Democrats voted 219-212 late Sunday to send legislation to Obama that would extend coverage to 32 million uninsured Americans, reduce deficits and ban insurance company practices such as denying coverage to people with pre-existing medical conditions.
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AT A GLANCE: HEALTH CARE OVERHAUL BILL
Congress approved a major overhaul of the nation's health care system for President Barack Obama's signature. Here are some of the features of the legislation.
HOW MANY COVERED: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 95 percent of eligible Americans would have coverage, compared with 83 percent today.
COST: $940 billion over 10 years, according to the Congressional Budget Office.
INSURANCE MANDATE: Almost everyone is required to be insured or else pay a fine, which takes effect in 2014. There is an exemption for low-income people.
INSURANCE MARKET REFORMS: Starting this year, insurers would be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents would be able to keep older kids on their coverage up to age 26. A new high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards would also take effect in 2014. Insurers would be prohibited from denying coverage to people with medical problems or charging them more. Insurers could not charge women more.
MEDICAID: Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults would be covered for the first time, starting in 2014. The federal government would pay 100 percent of costs for covering newly eligible individuals through 2016.
If the Senate approves a package of changes this week, a special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity would be eliminated. A different, one-time deal negotiated by Democratic Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million, remains.
TAXES: To make up for the lost revenue, the bill applies an increased Medicare payroll tax to the investment income and to the wages of individuals making more than $200,000, or married couples above $250,000. The tax on investment income would be 3.8 percent. If the Senate follows through, it would impose a 40 percent tax on high-cost insurance plans above the threshold of $10,200 for individuals and $27,500 for families. The tax would go into effect in 2018.
PRESCRIPTION DRUGS: Gradually closes the "doughnut hole" coverage gap in the Medicare prescription drug benefit that seniors fall into once they have spent $2,830. Seniors who hit the gap this year will receive a $250 rebate. Beginning in 2011, seniors in the gap receive a discount on brand name drugs, initially 50 percent off. When the gap is completely eliminated in 2020, seniors will still be responsible for 25 percent of the cost of their medications until Medicare's catastrophic coverage kicks in.
EMPLOYER RESPONSIBILITY: Employers are hit with a fee if the government subsidizes their workers' coverage. The $2,000-per-employee fee would be assessed on the company's entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement. Part-time workers are included in the calculations, counting two part-timers as one full-time worker.
SUBSIDIES: The aid is available on a sliding scale for households making up to four times the federal poverty level, $88,200 for a family of four. Premiums for a family of four making $44,000 would be capped at around 6 percent of income.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Small businesses, the self-employed and the uninsured could pick a plan offered through new state-based purchasing pools called exchanges, opening for business in 2014. The exchanges would offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms would not see major changes. But if they lose their jobs or strike out on their own, they may be eligible for subsidized coverage through the exchange.
GOVERNMENT-RUN PLAN: No government-run insurance plan. People purchasing coverage through the new insurance exchanges would have the option of signing up for national plans overseen by the federal office that manages the health plans available to members of Congress. Those plans would be private, but one would have to be nonprofit.
ABORTION: The bill tries to maintain a strict separation between taxpayer dollars and private premiums that would pay for abortion coverage. No health plan would be required to offer coverage for abortion. In plans that do cover abortion, policyholders would have to pay for it separately, and that money would have to be kept in a separate account from taxpayer money. States could ban abortion coverage in plans offered through the exchange. Exceptions would be made for cases of rape, incest and danger to the life of the mother.
GOP HEALTH CARE SUMMIT IDEAS: Following a bipartisan health care summit last month, Obama announced he was open to incorporating several Republican ideas into his legislation. But two of the principle ones — hiring investigators to pose as patients and search for fraud at hospitals and increasing spending for medical malpractice reform initiatives — did not make it into the legislation. The legislation incorporates only one, an increase in payments to primary care physicians under Medicaid, an idea mentioned by Sen. Charles Grassley, R-Iowa.
TIMELINE: WHEN CHANGES GO INTO EFFECT
THIS YEAR
— Sets up a high-risk health insurance pool to provide affordable coverage for uninsured people with medical problems.
— Starting six months after enactment, requires all health insurance plans to maintain dependent coverage for children until they turn 26; prohibits insurers from denying coverage to children because of pre-existing health problems.
— Bars insurance companies from putting lifetime dollar limits on coverage and canceling policies except for fraud.
— Provides tax credits to help small businesses with up to 25 employees get and keep coverage for their employees.
— Begins narrowing the Medicare prescription coverage gap by providing a $250 rebate to seniors in the gap, which starts this year once they have spent $2,830. It would be fully closed by 2020.
— Reduces projected Medicare payments to hospitals, home health agencies, nursing homes, hospices and other providers.
— Imposes 10 percent sales tax on indoor tanning.
2011
— Creates a voluntary long-term care insurance program to provide a modest cash benefit helping disabled people stay in their homes or cover nursing home costs. Benefits can begin five years after people start paying a fee for the coverage.
— Provides Medicare recipients in the prescription coverage gap with a 50 percent discount on brand name drugs; begins phasing in additional drug discounts to close the gap by 2020.
— Provides 10 percent Medicare bonus to primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities; improves preventive coverage.
— Freezes payments to Medicare Advantage plans, the first step in reducing payments to the private insurers who serve about one-fourth of seniors. The reductions would be phased in over three to seven years.
— Boosts funding for community health centers, which provide basic care for many low-income and uninsured people.
— Requires employers to report the value of health care benefits on employees’ W-2 tax statements.
— Imposes $2.3 billion annual fee on drugmakers, increasing over time.
2012
— Sets up program to create nonprofit insurance co-ops that would compete with commercial insurers.
— Initiates Medicare payment reforms by encouraging hospitals and doctors to band together in quality-driven “accountable care organizations” along the lines of the Mayo Clinic. Sets up a pilot program to test more efficient ways of paying hospitals, doctors, nursing homes and other providers who care for Medicare patients from admission through discharge. Successful experiments would be widely adopted.
— Penalizes hospitals with high rates of preventable readmissions by reducing Medicare payments.
2013
— Standardizes insurance company paperwork, first in a series of steps to reduce administrative costs.
— Limits medical expense contributions to tax-sheltered flexible spending accounts to $2,500 a year, indexed for inflation. Raises threshold for claiming itemized tax deduction for medical expenses from 7.5 percent of income to 10 percent. People older than 65 can still deduct medical expenses above 7.5 percent of income through 2016.
— Increases Medicare payroll tax on couples making more than $250,000 and individuals making more than $200,000. The tax rate on wages above those thresholds would rise to 2.35 percent from the current 1.45 percent. Also adds a new tax of 3.8 percent on income from investments.
— Imposes a 2.3 percent sales tax on medical devices. Eyeglasses, contact lenses, hearing aids and many everyday items bought at the drugstore are exempt.
2014
— Prohibits insurers from denying coverage to people with medical problems or refusing to renew their policy. Health plans cannot limit coverage based on pre-existing conditions or charge higher rates to those in poor health. Premiums can only vary by age (no more than 3-to-1), place of residence, family size and tobacco use.
— Coverage expansion goes into high gear as states create new health insurance exchanges — supermarkets for individuals and small businesses to buy coverage. People who already have employer coverage won’t see any changes.
— Provides income-based tax credits for most consumers in the exchanges, substantially reducing costs for many. Sliding scale credits phase out completely for households above four times the federal poverty level, about $88,000 for a family of four.
— Medicaid expanded to cover low-income people up to 133 percent of the federal poverty line, about $29,300 for a family of four. Low-income childless adults covered for the first time.
— Requires citizens and legal residents to have health insurance, except in cases of financial hardship, or pay a fine to the IRS. Penalty starts at $95 per person in 2014, rising to $695 in 2016. Family penalty capped at $2,250. Penalties indexed for inflation after 2016.
— Penalizes employers with more than 50 workers if any of their workers get coverage through the exchange and receive a tax credit. The penalty is $2,000 times the total number of workers employed at the company. However, employers get to deduct the first 30 workers.
2018
— Imposes a tax on employer-sponsored health insurance worth more than $10,200 for individual coverage, $27,500 for a family plan. The tax is 40 percent of the value of the plan above the thresholds, indexed for inflation.
2020
— Doughnut hole coverage gap in Medicare prescription benefit is phased out. Seniors continue to pay the standard 25 percent of their drug costs until they reach the threshold for Medicare catastrophic coverage, when their co-payments drop to 5 percent.
CONSUMER RESOURCES
NY Times: Clarity on changes for consumers
WashingtonPost.com: Health care calculator
Reuters: Winners and losers in health care bill
CBSNews.com: A look at what's in the bill
AP VIDEO
Health care bill: What it means to you
'Baby Killer' shouted during health care debate
Congress passes historic health care reform bill
Obama: 'We can still tackle big things'
Photos
Stories
