Health Care Reform Cheat Sheet, Version 3.0


This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.


They couldn't have waited one day. Nope, so on my first day back from vacation I'm forced to dive into health care reform head-first! Ladies and gentlemen, there wasn't enough tequila in Mexico to get through 2,562 pages of this thorny legislation. So without further ado, this is my third attempt (here's version #1 and #2, for comparison purposes) to create a cheat sheet for the non-wonks out there. Remember, there could be a fourth version after the bill goes back to the Senate.

How much? $940B over a decade, which is expected to reduce the deficit by nearly $140B in the first 10 years, according to a CBO estimate.

Who Pays?

  • Your friends with awesome union health insurance plans: There will be a new excise tax on high-premium ("Cadillac") insurance plans. Tax = 40% of premiums paid on plans costing more than $27,500 annually for a family, starting in 2018
  • "Rich" taxpayers: There will be an increase in Medicare payroll taxes on couples with income of more than $250,000 a year AND unearned income, like interest and capital gains, will be subject to additional 3.8% tax
  • Sun slaves: You know those guys at the guy who sort tans in the winter because they frequent indoor tanning salons? They are soon going to pay a 10% tax
  • The "bad guys": Everyone beats up on these guys, so why not whack them with fees? The government will impose fees on insurance companies, pharmaceutical companies and medical device manufacturers, including $33 billion over ten years on fees on drug makers, starting in 2014
  • A tax on individuals without qualifying coverage, maximum penalty set at 2.5% of income

What do I have to do?

  • Employees would be generally allowed to keep their work-provided coverage
  • If you are a U.S. citizens or legal residents, you have to purchase qualifying health coverage
  • Starting in 2014, there will be state-based exchanges where those who can't get insurance can compare and shop for plans
  • Exemptions for economic hardship, religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants, incarcerated individuals

What does my boss have to do?

  • Employers of 50 or more full-time workers that do not offer coverage would pay a fee as high as $2K/worker if the government ends up subsidizing employees' coverage
  • Self-employed people and small businesses could pick a plan offered through new state-based purchasing pools

Will Uncle Sam HELP Financially?

  • Tax credits for individuals and families likely making up to 400% of the federal poverty level, or $88,000 for a family of four to purchase insurance through the Exchanges
  • Tax credits to buy health coverage available to small employers with up to 25 workers and average wage of $40,000 or less

What's Going to Change?

  • Eventual elimination of lifetime limits on coverage and annual limits on coverage
  • Eventual elimination of pre-existing condition exclusions by 2014
  • Requirement to extend dependent coverage to age 26
  • insurers will not be allowed to charge women or persons with medical problems higher rates. Premiums of older people can't be more than 3X as expensive as those of younger
  • Coverage will be portable, even if you leave a job
  • Limit any waiting periods for coverage to 90 days
  • Temporary national high-risk pool: Will provide coverage to individuals with pre-existing medical conditions, until new rules banning pre-existing conditions take hold in 2014
  • Require health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers. Insurance companies pay out 74 cents on every dollar currently-new rules will see that amount rise to 80-85 cents
  • Develop standards for insurers to use in providing information on benefits and coverage and to promote administrative simplification
  • Limit deductibles in the small group market to $2K for individuals and $4K for families
  • Create a new federal body that would have power to block insurers from raising rates

Changes to Medicaid/Medicare

  • Benefits will be cut by > $500B over 10 years
  • Expansion of Medicaid to anyone under 65, with income eligibility levels of 133% of poverty ($29,327 a year for a family of four)
  • Will add approximately 16M Americans to public plans
  • Fed government will pay for all for new recipients at first, then 90%, with states picking up 10%, EXCEPT Nebraska, which will pay nothing, thanks to Senator Ben Nelson. No further discussion from the Cornhuskers on eschewing this most obvious case of pork...

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Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
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    View all articles by Jill Schlesinger on CBS MoneyWatch »
    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

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