Nine Major Changes In The Democrats' New Health Reform Bill
Topics: Health Reform, Politics
By Julie
Appleby and Mary
Agnes Carey
KHN Staff Writers
Mar 18, 2010
In their attempt to pass a sweeping health care overhaul this weekend, House
Democrats are pushing a package of legislative fixes to lure undecided or
opposed members of their party to the gyesh category.
Proposed changes to the Senate-passed health care bill include a scaled-back
tax on high-cost health insurance plans – a provision that is widely unpopular
with House Democrats – and more money to help states pay for an expansion of
Medicaid, the state-federal health program for the poor and disabled. The new
measure, called a reconciliation bill, also would take additional steps to close
a gap in Medicare prescription drug coverage and to help low- and middle-income
Americans purchase health insurance through new insurance exchanges.
If approved by the House, which is scheduled to vote Sunday, the package
would be considered in the Senate under a process that would require just 51
votes for passage rather than the 60-vote threshold to break a filibuster.
President Barack Obama has postponed a scheduled trip to Asia to be in town to
help convince wavering Democrats to vote for the bill.
A preliminary estimate from the Congressional Budget Office Thursday
concluded that the compromise bill would reduce the deficit by $138 billion over
the next decade, a finding that may help House Speaker Nancy Pelosi, D-Calif.,
and her leadership team fight back charges from Republicans who say the bill is
too big, too expensive and would disrupt the current health care system.
Here are some of the major changes between the reconciliation proposal and
the Senate-passed bill:
HEFTIER SUBSIDIES: Compared to the Senate legislation, the
reconciliation bill would provide more generous subsidies to low- and
moderate-income Americans to help them buy health coverage.
THE MASERATI TAX: The levy on high-cost insurance plans is
scaled back and delayed, rendering it more a "Maserati" than a "Cadillac" tax.
It would apply only to the portion of plans costing more than $10,200 a year for
individuals, up from $8,500, and $27,500 for families, up from $23,000. The tax
wouldn't kick in until 2018, reducing the projected revenue to the government by
80 percent.
CLOSING THE DOUGHNUT HOLE: Unlike the Senate bill, the
reconciliation measure would eventually close the coverage gap, called the
gdoughnut hole,h for Medicare beneficiaries enrolled in Part D drug plans.
(Currently, seniors who hit the gap must bear the full cost of their medications
until they spend a certain amount, when coverage kicks back in.)
Under the new bill, seniors who hit the gap this year would get $250 to help
cover the costs of their medications. Starting next year, they'd get a 50
percent discount on brand-name drugs, with the cost borne by the drug industry.
In subsequent years, the discounts would expand and begin covering generic
drugs, with the expense picked up by the government. By 2020, the discounts
would reach 75%.
SHIFT IN MEDICARE ADVANTAGE PAYOUTS: Government payments to
Medicare Advantage, the private-health plan alternative to traditional Medicare,
would be cut back more steeply than under the Senate bill: $132 billion over 10
years, compared to $118 billion.
The government currently pays the private plans an average of 14 percent more
than traditional Medicare. The new bill, besides reducing payments overall,
would shift the funding; some high-cost areas would be paid 5 percent below
traditional Medicare, while some lower-cost areas would be paid 15 percent more
than traditional Medicare. The Senate's plan that would have shielded some areas
of the country such as South Florida from major cuts was largely eliminated.
A RAISE FOR DOCTORS: Primary care doctors would get a
Medicaid payment boost in the reconciliation bill. Beginning in 2013 and 2014,
the doctors' payment rates would be on par with Medicare rates, which typically
are about 20 percent higher than Medicaid. The goal is to ensure that there will
be a sufficient number of doctors willing to care for the millions of additional
people who will become eligible for Medicaid under the health care overhaul.
PUSHING UP THE MEDICARE TAX: The Senate bill adds 0.9
percent to the Medicare payroll tax on earned income above $200,000 for
individuals, or $250,000 for couples. Under the reconciliation bill, starting in
2013, people in those income brackets also would face a 3.8 percent tax on
investment income, such as interest, capital gains and dividends.
PENALTY FOR NOT HAVING INSURANCE: Under the new bill, most
Americans without insurance would face an annual penalty, starting in 2014 at
$95 – the same as in the Senate bill. But in following years, the penalties in
the reconciliation bill are slightly different. Those without insurance in 2016,
for example, would pay the greater of two alternatives: A flat fee of $695, down
from the Senatefs $750, or 2.5 percent of their income, up from 2 percent in the
Senate bill.
EXPANDING MEDICAID: The reconciliation package differs from
the Senate-passed bill in several ways. It would delete a provision dubbed the
gCornhusker kickbackh that would have exempted Nebraska from paying any cost of
a Medicaid expansion included in the bill. But it would provide full federal
funding to all states for newly eligible Medicaid recipients for three years.
And it would give additional funding to states like Vermont and Maine that have
already moved to cover adults without children, which isn't required under the
Medicaid program.
MEDICARE SPENDING BOARD: The Senate bill would create an
independent, 15-member board to recommend ways to control Medicare spending. The
board remains in the reconciliation package, but would be expected to produce
just about half of its original projected savings of $23 billion in the Senate
bill. That's because the new proposal would make greater cuts in Medicare
Advantage plans.
KHN staff writers Jordan Rau and Phil Galewitz contributed to this story.