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Health Care Bill: What Does It Mean for You?

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A Breakdown of President Obama's and Democrats' Health Care Bill

By HUMA KHAN
March 22, 2010


President Obama Tuesday is expected to sign the sweeping health care overhaul legislation that will have a significant impact on Americans across the board.
Mellody Hobson and Dr. Tim Johnson explain the medical and monetary implications

Watch live coverage of President Obama signing the health care bill into law at 11:15 a.m. ET on ABCNews.com or your local ABC station.

The $938 billion health care bill is to be paid by a combination of tax hikes on the wealthy and cuts in Medicare. The bill will expand coverage to 32 million Americans, but many of the provisions -- with the exception of prescription drug coverage for older Americans and children who have been denied insurance because of pre-existing conditions -- are not expected to go into effect until 2014.

A majority of Americans -- about 60 percent -- get health insurance through their employers. If those Americans make less than $200,000, they are unlikely to see any changes, since the health care bill is designed to maintain the role of employers in providing health insurance benefits and penalizes those that don't. But the bill will affect those in the high income bracket and poor Americans who currently cannot afford health coverage.



Here is a look at what the health care bill entails and when Americans can expect to see those changes go into effect:

Insurance Market Changes:

Starting this year, insurance companies would be barred from denying coverage to children because of pre-existing conditions. Effective when the bill is signed, they will also be prevented from placing lifetime caps on policies, or from dropping a patient's insurance if he or she gets sick.

In the next three months, "high risk pools" will be established for those who who have pre-existing conditions, to provide safeguards until all the provisions are fully enacted.

Also this year, insurance companies would be required to cover preventive services, which includes such medical procedures as vaccines that are recommended by the Centers for Disease Control and Prevention.

By 2014, insurance companies will be prohibited from denying coverage to adult patients with pre-existing medical conditions or charging them more because of these conditions.

In a move that has made many college students and young Americans happy, the health care bill allows parents to keep their children on their insurance plan until the age of 26. That provision takes effect this year.

Prescription Drugs:

Proponents of the health care bill have been touting how it aims to close the "doughnut hole" in prescription drug coverage. What that means is that older Americans who hit the cap on their Medicare prescription drug benefits will be given a rebate, starting this year. Once they spend $2,830, older Americans will receive a $250 rebate. Starting in 2011, older Americans who go past the allotted amount will be given a 50 percent discount on prescription drugs. The bill aims to close the "doughnut hole" completely by 2020, but older Americans will still have to pay for 25 percent of their drugs.


Health Care Bill: Tax Increases:

Individuals with incomes of $200,000 or higher, and families with combined incomes of $250,000, will be subject to a new 3.8 percent "Medicare Tax." They will also be taxed now on unearned income, including dividends, interest and capital gains.

If the Senate passes the "fixes" that the House of Representatives has proposed, as it plans to, there will also be a new tax on high-cost insurance plans, called the "Cadillac tax," which employers will have to pay. Insurance plans with a premium of $10,200 for individuals and $27,500 for families would be subject to a 40 percent tax. Many say such high-value, generous insurance packages that include luxuries such as no co-payments and deductibles are responsible for increasing costs in the industry, but many labor union members and teachers negotiate such plans in exchange for lower pay.

Companies in the medical industry will also be subject to higher taxes, including insurers, pharmaceutical companies and medical device manufacturers.

However, there are a wide array of tax incentives for small businesses to provide insurance to their employees.

Mandatory Insurance:

By 2014, most Americans would be required to have health insurance or pay a fine, with the exception of low-income Americans. Small businesses, high-risk patients and the uninsured would have the option of shopping for coverage in health insurance exchanges, a marketplace in which people could shop for and compare insurance plans.

Employers would also be required to provide coverage to their workers, or pay a fine of $2,000 per worker. Companies with fewer than 50 employees, however, are exempt from this rule.

Medicaid:

The bill greatly expands Medicaid and subsidies to low-income Americans. Those who are at 133 percent of the federal poverty level, or $29,327 for a family of four, would be eligible for Medicaid, starting in 2014.

Also in 2014, adults who don't have children would be eligible for such benefits that have traditionally only been given to households with children.

Louisiana specifically will receive an expansion of $300 million in Medicare funding from the federal government by 2011.


http://abcnews.go.com/Politics/HealthCare/health-care-bill-obama-sign-bill-tuesday/story?id=10169801&page=1

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