The Health Care Bill: A Two-Minute Guide

As all the world knows, the House voted Sunday in favor of a modified version of the Senate health care reform bill and-assuming the Senate agrees and the President signs-it's all over but the head scratching. What's this tremendously complex new law mean for you exactly, and how is it going to change your life? There will be reams written on the topic over the years. But for now, here are some answers about a historic bill that, love it or hate it, may affect your financial welfare more deeply than anything to come out of Congress in a long, long time.

Will the bill change my current coverage?
If you now get coverage through your employer, probably not. That's because existing plans are exempt from adopting the benefits levels dictated for other plans. There are just a couple of exceptions: Starting in six months, for example, a plan can't exclude children for pre-existing conditions (adults theoretically can be excluded until 2014), and it will have to cover your dependents up to age 26.

Will I have to get insurance if I don't already have it?
Yes, but not until 2014, when most of the plan's signature provisions kick in. If you don't, you could face a fine of up to $2,085, or 2.5% of income. But you'll be able to buy the insurance from a newly created American Health Benefit Exchange in your state, for a premium cost that can't exceed 8% of your income.

Will there be a public option?
No. The Republicans won that one.

How will the bill affect Medicare?
There will be a number of changes, including higher Part A premiums for high-income people and new rules for Medicare Advantage plans. But easily the most popular change is likely to be the gradual phasing out of the annoying "doughnut hole" in Part D, the prescription drug plan. The gap will close entirely by 2020; in the meantime you'll get a partial rebate for money you spend to cover the hole.

How am I going to pay for it?
The bill comes with a variety of new fees and taxes. After all, it's going to cost $940 billion over 10 years, according to the Congressional Budget Office. Among the taxes you'll see:

Fees on drug companies and insurers
An excise tax of 10% on overly generous health plans
A 2.9% tax on the sale of medical devices
A hike in your Medicare payroll taxes, if you make more than $250,000 and you're married, plus a 3.8% excise tax on interest, dividends and other unearned income.

Should I be happy about this or furious?
Both Republicans and Democrats agree that it never made any sense for health insurance to be tied solely to employment. That link, a historical accident, discourages entrepreneurship, makes employees reluctant to leave a job for a new opportunity, and it can turn a job loss into a financial catastrophe. The bill corrects that situation. But even if the bill becomes law, it won't in itself slow the rise in health care costs, and it's not clear that the program's massive costs-including subsidies for households with incomes as high as four times the poverty level-will remain under control. Remember Medicare? Health care costs have a way of escaping politicians' control.

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