Health care bill passes, puts benefits in reach for millions of people

house passes health care reformHouse Democrats passed the Senate version of the health care reform bill after hours of debate and politicking. It took about 9 1/2 hours to get to the crucial vote that passed health care reform at 10:46 p.m. ET by a vote of 219 to 212. All the Republicans and 34 Democrats voted against the bill.

The bill now goes to President Barack Obama for signature, possibly as early as Monday. When signed, about 32 million Americans who now don't have health care insurance will have improved chances of getting covered.

Next the house passed changes to fix the problems with the Senate bill. This reconciliation bill will then go to the Senate, where Senate leader Harry Reid (D-Nev.) says he has the 51 votes needed to pass the legislation. Debate on this reconciliation bill will likely begin on Tuesday in the Senate and last a few days. How long will depend on how many delay tactics and amendments the Republicans attempt to pass. If any changes are made to the reconciliation bill, it will need to go back to the House.

House Majority Leader Steny Hoyer (D-Md) opened the "historic" health care debate on the floor of the House of Representatives, saying that "America is on an unsustainable course" and we need to do something before "another family falls into bankruptcy because someone had the misfortune to get sick." It will mean "more control for consumers than health insurance companies." Coverage will reach 95% of all Americans who will be able to buy health insurance in a "competitive, transparent marketplace."

Rep. Nathan Deal (R-GA) opened the debate for the Republications saying, "the problem with socialism is that you eventually run out of other people's money." He called the mandates on the states and on individuals "unconstitutional" and announced that 39 states will join in a lawsuit to question the constitutionality of the bill. A court case on constitutionality will likely make it to the Supreme Court. Deal is resigning from the House to run for Governor of Georgia.

So now that it's passed, what will it mean for you? Most people won't see any changes until January 1, 2014, but a few who now can't get insurance because of pre-existing conditions will be eligible for a temporary high risk pool. You can review the provisions of the reconciliation bill and the Senate bill yourself, using the comparison tool on health care reform at The Henry J. Kaiser Family Foundation.

Once the bill takes effect on January 1, 2014, insurance companies will not be able to refuse coverage for pre-existing conditions. You'll be able to buy insurance on state-based health insurance exchanges. Starting January 1, 2014 you will be required to have health insurance or you'll have to pay a tax penalty. That penalty will be $695 per year up to a maximum of $2,085 per family or 2.5% of household income. The penalty will be phased in gradually over three years, starting with $95 in 2014.

Let's take a closer look at some key provisions of the Senate bill and the reconciliation bill:

Temporary high-risk pool

People without insurance because of pre-existing conditions will be able to tap into a temporary, high-risk pool that will be available within 90 days -- now that the bill has passed -- and be effective until the new health insurance rules take effect on Jan. 1, 2014. Any U.S. citizen or legal immigrant who has pre-existing conditions and who has been uninsured for at least six months will be able to tap into this temporary, high-risk pool.

Both the Senate bill and the reconciliation bill provide the same provisions. All will receive subsidized premiums. The pool will be established based on the rates for a standard population and may vary no more than 4 to 1 due to age. Maximum cost sharing will be limited to current Health Savings Account (HSA) law: $5,950 for an individual and $11,900 for a family in 2010.

Pre-existing conditions can't knock you out of health coverage
Individuals, who can not get access to a group plan, either through their employer or their union, will find it much easier and more affordable to get insurance. All plans will be guaranteed issue and require renewability, which means you can't be denied health insurance because of a pre-existing condition, nor can you be kicked out of a health plan because you got sick. Plans will only be allowed to rate people based on age, and that premium difference will only be able to vary by a 3-to-1 ratio.

Benefit Tiers
Both the Senate bill and the reconciliation health bill provide for four benefit categories for health insurance plan designs, as well as a catastrophic option as well. Starting with a Bronze plan, which will cover 60% of the benefit costs of the plan with an out-of-pocket limit equal to the Health Savings Account (HSA) current law limit of $5,950 for individuals and $11,900 for families. The second tier is a Silver plan, which covers 70% of the benefit costs of the plan with the HSA out-of-pocket limits.

Next comes the Gold plan, which provides 80% of the benefit costs of the plan with the HSA out-of-pocket limits. The most comprehensive is the Platinum plan, which covers 90% of the benefit costs of the plan with the HSA out-of-pocket limits.

Out-of-Pocket limits will be reduced for those with incomes up to 400% of the Federal Poverty Level (FPL). If you earn at 100% to 200% of the FPL, then your out-of-pocket limits will be one-third of HSA or $1,983 for an individual and $3,967 for a family. Those earning between 200% and 300% FPL will see their out-of-pocket limits lowered to one-half of the HSA limits.

Creation of Health Insurance Exchanges
Both the reconciliation bill and the Senate bill call for creating state-based American Health Benefit Exchanges and Small Business Health Options Program Exchanges that will be administered by a governmental agency or non-profit organization. Individuals and small businesses up to 100 people will be able to purchase insurance through these exchanges.

This list is not meant to summarize all the provisions of the health reform legislation, but instead highlights some key provisions. You can read a detailed comparison of the bills at The Henry J. Kaiser Foundation's website.

Lita Epstein has written more than 25 books including "The Complete Idiot's Guide to Social Security" and "Medicare and The Pocket Idiot's Guide to Medicare Part D."
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