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Key Provisions of the Senate Health Care Reform Bill

The "Patient Protection and Affordable Care Act," H.R. 3590

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Key Provisions of the Senate Health Care Reform Bill

Mildred Poyato,9, whose family doesn't have health insurance, gets a checkup from Dr. Adrian Khaw at the University of Miami Pediatric Mobile Clinic on September 25, 2009.

Joe Raedle/Getty Images
This article summarizes key provisions in the U.S. Senate health care bill, "Patient Protection and Affordable Care Act," H.R. 3590, which was unveiled by Senate Majority Leader Harry Reid on November 18, 2009 after the non-partisan Congressional Budget Office concluded that the bill:

  • would reduce the federal deficit by $130 billion over the 2010-2019 period;
  • would cover about 31 million Americans who are presently uninsured;
  • would raise the percentage of Americans with health care coverage from 83% to 94%;
  • would slow the annual growth rate of Medicare to 6% from its 8% growth rate since 1990.
The Senate's "Patient Protection and Affordable Care Act" is the companion legislation to the House health care reform bill, which was hotly debated and negotiated over many months, and passed on November 7, 2009 in a historic House 220 to 215 vote.

Health care coverage and reform measures under the Senate plan are similar to the House health care reform bill.

However, most fiscal aspects of the Senate health care reform plan differ considerably from the House plan, including in funding sources for reform legislation, decreased employer penalties for not offering health insurance to employees, and decreased taxpayer penalties for not obtaining mandated coverage.

Health Care Coverage

Like the House bill, a Medicare-like public plan will offer four levels of care to all U.S. citizens and legal residents to choose from, without regard to pre-existing medical conditions: basic, enhanced, premium and premium-plus. The four government plan levels are differentiated mainly by costs covered by the public plan, rather than the participant, and range from 60% to 90% of costs.

Under the Senate bill, states may opt-out of allowing the public plan to be provided to their residents. Illegal immigrants are not covered by either the Senate or House health care refrom bill.

The public plan will be offered along with a myriad of private plans via a state-based insurance exchange. For the first few years, only small businesses, the uninsured, and self-employed persons may purchase policies from the exchange.

In contrast to the House bill, employers will be strongly encouraged, but not required, to provide health insurance coverage for employees. If coverage is not provided, businesses will be assessed a flat fee per employee who buys insurance via the exchange.

Like the House bill, the Senate bill reforms for-profit practices by mandating that private insurers:

  • are required to accept all applicants,
  • may not charge higher premiums because a person becomes ill,
  • prohibits the use of pre-existing conditions to limit or disallow coverage, and
  • children may remain on parents'insurance through age 26.
  • No lifetime caps on coverage expenditures.
Mandatory Insurance with Cost Subsidies

As is the case for car insurance in most states, All Americans will be required to obtain some form of healthcare insurance coverage.

Subsidies to help pay for the costs of government plans will be given on a sliding scale to individuals and families with annual incomes between 133% to 400% of poverty level. Those earning less than 133% are eligible for Medicaid coverage.

Penalties of up to $750 per adult, under the Senate plan, would be assessed for failure to purchase insurance coverage. The House plan charges much higher penalties, as high as 2.5% of annual income.

Doctors and Hospitals

Under the Senate's public option plan, doctors, hospitals and other medical professionals will be reimbursed at individually or regionally negotiated rates.... a change forced by legislators who hail from largely rural areas, which often receive below-cost rates under standardized Medicare reimbursement procedures.

It's widely expected that all doctors and hospitals that currently provide Medicare services will also opt to provide "public option" healthcare plan services.

Paying for Government "Public Option" Plan

The goal for the Obama administration and Democratic leadership in Congress is for government "public option" health care to be budget-neutral, which means new government funds will be found (new revenues or cost-cutting measures) to pay for the new Medicare-like plan.

The Senate Democrats' "Patient Protection and Affordable Care Act" legislation plans to pay for these new initiatives through the following:

  • A 40% tax on employer-provided "cadillac plans," which are defined as having employer-paid annual premiums over $23,000 for families and $8,500 for individuals
  • Increased Medicare payroll tax, from 1.45% to 1.95%, on couples with adjusted gross incomes over $250,000 and individuals over $200,000
  • A 5% tax on elective cosmetic surgeries
  • Annual levies on health insurers, clinical laboratories, and pharmaceutical companies.
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