March 25, 2010 in Nation/World

Congress completes overhaul of health care

David Espo Associated Press

A look at details of the health care overhaul law

Some features of the health care overhaul bill President Barack Obama has signed, as modified by a package of changes passed Thursday by the House and Senate:

How many covered: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 94 percent of eligible non-elderly Americans will have coverage, compared with 83 percent now.

Cost: $938 billion over 10 years for the coverage expansion, according to the Congressional Budget Office.

Deficit reduction: CBO says the measure will reduce deficits by $143 billion over a decade.

Insurance mandate: Almost everyone will be 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 will be prohibited 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 will be able to keep children on their coverage up to age 26. A new high-risk pool will offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Major consumer safeguards will also take effect in 2014. Insurers will be prohibited from denying coverage to people with medical problems or charging them more. Insurers will not be able to 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 will be covered for the first time, starting in 2014. The federal government will pay 100 percent of costs for covering newly eligible individuals through 2016. A special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity is being eliminated. A different, one-time deal negotiated by Democratic Sen. Mary Landrieu for her state, Louisiana, worth as much as $300 million, remains.

Taxes: The bill applies an increased Medicare payroll tax to investment income and wages of individuals making more than $200,000 a year, or married couples above $250,000. The tax on investment income is 3.8 percent. The legislation also imposes a 40 percent tax on high-cost insurance plans worth more than $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 would receive a $250 rebate. Beginning in 2011, seniors in the gap would 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.

Help for small businesses: Businesses with 25 or fewer employees that offer health coverage to their work force will get tax credits. The credits will start this year and rise in 2014 to a maximum of 50 percent of the cost of premiums offered by the smallest businesses, those with 10 or fewer workers.

Subsidies for individuals: 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 will 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 will offer the same kind of purchasing power that employees of big companies benefit from. People working for medium-to-large firms will 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, and insurers could not deny them coverage.

How it’s paid for: The legislation cuts about $455 billion over 10 years from projected payment increases to hospitals, insurance companies and others under Medicare and other government health programs. Revenue increases over 10 years include: $210 billion from increasing the Medicare payroll tax; $107 billion from fees on insurance companies, drug makers and medical device manufacturers; $32 billion from the excise tax on high-value insurance plans; and $2.7 billion from a tax on indoor tanning services.

Government-run plan: No government-run insurance plan. People purchasing coverage through the new insurance exchanges will 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 will 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 will 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.

WASHINGTON — Capping an epic struggle, congressional Democrats put the final touches Thursday to historic legislation enshrining health care as the right of every citizen. Republicans vowed to campaign for repeal in the fall election season, drawing a quick retort from President Barack Obama: “I welcome that fight.”

The president spoke in Iowa as the Senate voted 56-43 for legislation making changes, including better benefits for seniors and low-income and middle-class families, to the bill he signed into law with a flourish at the White House on Tuesday.

The House added its approval a few hours later, 220-207, clearing the way for Obama’s signature on the second of two bills that marked the culmination of what the president called “a year of debate and a century of trying” to ensure coverage for nearly all in a nation where millions lack it. Obama is expected to sign the legislation early next week.

Taken together, the two bills also aim to crack down on insurance industry abuses and to reduce federal deficits by an estimated $143 billion over a decade. Most Americans would be required to buy insurance for the first time, and face penalties if they refused.

The second of the two bills also presented Obama with another victory, stripping banks and other private lenders of their ability to originate student loans in favor of a system of direct government lending.

After a monthslong battle in Congress, the political struggle was morphing into a new phase, where public debate was tinged with violence — and politicians accused one another of seeking to exploit it for their own advantage.

Apart from their impact on nearly every American and an estimated one-sixth of the American economy, the week’s events marked Obama’s biggest political triumphs since he took office more than a year ago. A pending arms control agreement with Russia, announced on Wednesday, added to his resume, and White House officials said they hoped the momentum would translate into further political successes in the run-up to the midterm elections.

More than 10 lawmakers in the House said they had received threats or worse as a consequence of the health care debate, most of them Democrats who voted in favor of the legislation. There were reports of bricks through windows, a cut propane line to a grill and numerous obscene and threatening phone calls and faxes. An undisclosed number of lawmakers were under increased police protection.

Speaker Nancy Pelosi, D-Calif., and the GOP leader, Rep. John Boehner of Ohio, both denounced the threats and incidents of violence. But Democrats said Republicans had been too slow to respond, drawing an outraged response in return.

“By ratcheting up the rhetoric, some will only inflame these situations to dangerous levels,” said Republican Whip Eric Cantor of Virginia. “Enough is enough. It has to stop.”

An aide to Rep. Chris Van Hollen of Maryland, head of the Democratic 2010 campaign effort, responded: “This is straight out of the Republicans’ political playbook of deflecting responsibility and distracting attention away from a serious issue.”

“Repeal and replace” was the new slogan for Republicans as they pivoted away from earlier attempts to kill the health care legislation. Officials said it was meant to appeal to tea party activists — who staged an occasionally unruly demonstration outside the Capitol over the weekend — as well as to independent voters eager for changes in the health care system but fearful the Democrats went too far.

“Republicans fought on behalf of the American people this week and will continue to fight until this bill is repealed and replaced with commonsense ideas that solve our problems without dismantling the health care system we have and without burying the American dream under a mountain of debt,” said Senate Republican leader Mitch McConnell of Kentucky.

Repeal was far-fetched in the extreme since Republicans are now deep in the minority in both houses and would need a two-thirds majority to overcome a certain veto by Obama.

But Republicans circulated polls showing public backing for the overhaul at no better than 40 percent, despite months of Democratic efforts to rally support. Attacking the bill as a government takeover of health care paid for in higher taxes and Medicare cuts, they taunted House Democrats who voted for it, saying those lawmakers had cleared the way for their own defeat this fall.

Democrats said any unease was the result of months of Republican distractions — as far back as last summer’s debunked charges of “death panels” — and predicted the public would warm to the new law once its first benefits take effect.

That was Obama’s pitch in Iowa, where he trumpeted a “set of reforms” that will take effect before the elections.

He said small businesses would be eligible for tax credits to help them cover the cost of insurance for employees, including a $250 rebate from the government for seniors with high prescription drug costs.

“This year, insurance companies will no longer be able to drop people’s coverage when they get sick, or place lifetime limits or restrictive annual limits on the amount of care they can receive,” he said.

“This is the reform that some folks in Washington are still hollering about. And now that it’s passed, they’re already promising to repeal it. … Well, I say go for it,” he said.

Senate passage of the follow-up measure was nearly along party lines. Democratic Sens. Blanche Lincoln and Mark Pryor of Arkansas and Ben Nelson of Nebraska joined 39 Republicans in opposing the legislation. Republican Johnny Isakson of Georgia, who is hospitalized, did not vote.

The House vote followed the same pattern, with 32 Democrats joining 175 Republicans in opposition.

Democrats had hoped the Senate’s vote would end their yearlong campaign to overhaul the health care system. But Republicans forced the deletion of two minor student loan-related provisions, and that required a revote in the House.

The day’s events marked the final stages of a rescue mission that Obama and Democratic leaders mounted more than two months ago, after Republicans unexpectedly won a Massachusetts Senate seat and with it, the ability to slow final action on health care legislation.

Under a revised strategy, the House agreed to approve a Senate-passed bill despite numerous objections, on the condition that both houses would follow quickly with a fix-it measure. The one finally brought to a vote on Thursday added more than $20 billion to subsidies for lower- and middle-income individuals and families who will be required to purchase insurance and about $8 billion over a decade for states that already provide more generous than average Medicaid benefits.

The Senate vote took place with Vice President Joe Biden presiding, a symbolic gesture since his vote was not needed.

Moments before approving the legislation, the Senate paused for a moment of silence in memory of Sen. Edward M. Kennedy of Massachusetts, who died last year after a career of more than 45 years in which he relentlessly pursued legislation to enact national health care.

© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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