Health Reform: What's in It for You?

MONDAY Nov. 30, 2009 -- The two health reform bills moving through the U.S. Congress differ in a number of ways but achieve the same goal: a dramatic reduction in the number of uninsured Americans.

Legislation approved by the House of Representatives earlier this month would expand coverage to 96 percent of Americans. The Senate is preparing to debate a proposal to expand coverage to 94 percent of Americans.

"These bills build on the current system of providing insurance in the U.S.," a system that includes Medicaid, employer-sponsored health insurance and individually purchased health plans, explained Elizabeth A. McGlynn, an associate director at RAND Health in Santa Monica, Calif.

"I think these bills do not constitute a radical change but rather a 'build out' of our current system," she added.

The bills require most Americans to have health insurance or pay penalties for failing to comply. The House imposes a fine of 2.5 percent of adjusted income. The Senate phases in penalties, which rise to $750 a year starting in 2016 and are adjusted annually for cost of living.

People of modest means who don't have health insurance may qualify for coverage under Medicaid. The House bill expands Medicaid eligibility to 150 percent of the federal poverty level. In 2009, that's $16,245 for an individual or $33,075 for a family of four. The Senate bill is slightly less generous, boosting Medicaid eligibility to people with incomes at or below 133 percent of the federal poverty level, or $14,403 for an individual and $29,326 for a family of four.

The bills also benefit people who lose health insurance because their employers no longer offer coverage or go out of business, said Warren Greenberg, professor emeritus of health policy at George Washington University in Washington, D.C. These people would be eligible to purchase health insurance through an insurance exchange, he explained.

Under both bills, individuals and families with incomes up to 400 percent of the federal poverty level would be eligible for help paying for plan premiums and other cost-sharing through national or state-based exchanges.

Under the House version, employers with annual payrolls exceeding $750,000 would be required to offer coverage to their employees. The Senate doesn't mandate coverage, but employers with more than 50 employees that fail to offer coverage would be fined $750 annually per worker when an employee obtains federally subsidized health insurance through an exchange.

"An employer mandate to offer insurance and a fine if employees bought insurance in the insurance exchange would essentially amount to the same thing," Greenberg explained. "It would provide incentives for employers to offer health insurance."

Each bill offers an array of differing financing mechanisms. The House bill includes a 5.4 percent tax on individuals making more than $500,000 and families earning more than $1 million. The Senate proposes increasing the Medicare payroll tax on individuals earning more than $200,000 and couples making more than $250,000. It would also impose a 5 percent tax on cosmetic medical and surgical procedures.

Health reform isn't a done deal. First, the Senate must act and, if it passes legislation, then the House and Senate would appoint a conference committee to work out differences between their two bills. Both chambers would vote on the compromise version. And if each passes the bill, it would go to the president for his signature.

Before that happens, any number of contentious issues could derail consensus. One smoldering debate concerns whether the government should offer a public plan to compete alongside private health-plan options. The House bill creates such a plan, while the Senate has proposed allowing states to opt out of offering a public plan.

"The public option is a lightning rod that reflects ideological differences in Congress and among the American people at large," said Roger Feldman, a professor of health insurance and economics at the University of Minnesota in Minneapolis. "I think the public option will either be removed or it will torpedo the whole reform effort . . . ."

The House and Senate bills also support research to compare the clinical effectiveness of various medical treatments. But that type of research has come under scrutiny since a federal panel issued controversial guidelines recommending against routine mammography screening for women in their 40s.

"Unfortunately, the mammography guidelines are coming at a wrong time," Greenberg said. "I understand that one's physician can overrule the guidelines and the government has not necessarily endorsed them," he added. "But it seems that opponents of government action are taking them to mean a sign of a government-run health plan. I think that it will make passage of a bill more difficult."

More information

For help comparing the House and Senate versions, visit the Kaiser Family Foundation.

Posted: November 2009


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