Healthcare Reform Legislation: Overview of Facts
Last night the House of Representatives passed sweeping healthcare reform legislation by a vote of 219 to 212. While PYA works toward more comprehensive informational materials surrounding this legislation, we have outlined a brief overview of key facts below.
Cost: $940 billion over the first ten years as measured by the Congressional Budget Office
Expanded Coverage: 32 million currently uninsured Americans
Funding:
- Medicare Tax on Investment Income – Beginning in 2012, Medicare’s Payroll Tax will expand to include unearned income (i.e., a 3.8% tax on investment income on individuals and families whose annual earnings are more than $200,000 and $250,000, respectively)
- Excise Tax – Beginning in 2018, insurance companies must pay a 40% excise tax on high-end insurance plans
- Tanning Tax – 10% excise tax on indoor tanning
Individual Mandate: With certain exceptions for low-income citizens, by 2014 Americans must purchase health insurance or face an annual fine
Employer Mandate: Employers with greater than 50 employees must provide health insurance or pay an annual fine if any worker receives federal subsidies in order to purchase health insurance
Insurance Reforms:
- Dependent children will be permitted to continue coverage on their parents’ plans until age 26
- Children may no longer be denied coverage due to a preexisting condition
- Beginning in 2014, insurance companies cannot deny coverage to any individuals with preexisting conditions
- No lifetime limits will exist on coverage paid out under insurance plans
Exchanges and Subsidies:
- Uninsured and self-employed Americans will be able to purchase health insurance via state-based exchanges
- Individuals and families earning between 100% and 400% of the federal poverty level will be eligible for subsidies to purchase health insurance on an exchange
- Illegal immigrants are not permitted to buy health insurance in the exchanges
- Beginning in 2014, separate exchanges will be developed in order that small businesses can purchase coverage
Abortion:
- Separate accounts will be maintained for private insurance premium funds and taxpayer funds with individuals paying for abortion coverage via two separate payments
- Healthcare plans will not be required to offer abortion coverage and states may pass legislation choosing to opt out of such coverage through the exchange
Medicare and Medicaid:
- Medicare funding will be cut by $500 billion over the next 10 years
- The Medicare prescription drug “donut hole” will be closed by 2020 and seniors who reach the donut hole this year will receive rebates
- Beginning in 2011, seniors in the donut hole will receive 50% discounts on brand name drugs
- States will be required to consider as Medicaid-eligible those individuals who make up to 133% of the federal poverty level
- Beginning in 2014, states will be required to expand Medicaid coverage to childless adults
- Through 2016, the federal government will pay 100% of the costs for covering newly eligible Medicaid individuals
Please note that the above-outlined information is preliminary in nature and may be updated by PYA as we continue to evaluate and review the legislation.
