Proposed Changes in the Final Health Care Bill

Senate bill

Penalty: In 2014, $95 a year or 0.5 percent of a household’s income, whichever is greater; in 2015, $495 or 1 percent of income; in 2016, $750 or 2 percent of income (with a maximum of $2,250 for a family). The penalty would be adjusted for inflation after 2016.

Exemptions: American Indians; people with religious objections; people who can show financial hardship; people without coverage for less than three months; households with income below 100 percent of the poverty level ($22,050 for a family of four in 2009); households that would pay more than 8 percent of their income on premiums for the cheapest available health plan.

Senate bill

States would form their own exchanges. Several states could join together to form a regional exchange.

Open to people who do not have qualifying coverage through an employer or a public program.

Open to employers with 100 or fewer workers. Starting in 2017, states could allow employers with more than 100 employees to participate in the exchange.

Senate bill

The federal Office of Personnel Management, which provides health benefits to federal employees, would sign contracts with insurers to offer at least two national health plans to individuals, families and small businesses. The new plans would be separate from the program for federal employees, and premiums would be calculated separately. At least one of the plans would have to operate on a nonprofit basis.

Senate bill

Would provide tax credits, on a sliding scale, to people with incomes up to 400 percent of the federal poverty level ($88,200 for a family of four) to help pay insurance premiums and out-of-pocket costs like co-payments and deductibles.

Households in the lowest income group — those below 150 percent of the poverty level ($33,075 for a family of four) — would pay 2 percent to 4.6 percent of their income on premiums. Health plans would cover 90 percent of the cost of the benefits.

Households in the highest income group eligible for subsidies — those between 350 percent and 400 percent of the poverty level ($77,175 to $88,200 for a family of four) — would pay 9.8 percent of their income on premiums. Health plans would cover 70 percent of the cost of the benefits.

Subsidies would increase at the same rate as the increase in premium contributions from the previous year.

Senate bill

Employers with 50 or more full-time workers would pay a penalty if they do not offer health benefits and if any of the workers obtain subsidized coverage through the new health insurance exchanges.

Penalty: $750 for each full-time worker in the company.

Employers with more than 50 workers that offer coverage would also pay a penalty if any of the workers obtain subsidies to buy insurance. In this case, the penalty would be $3,000 for each employee who receives subsidized coverage, or $750 for each full-time worker in the company, whichever is lesser.

Employers who offer coverage would be required to provide vouchers — equal to what the employer would have paid under the company’s plan — to low- and middle income workers to obtain insurance on their own through the exchanges. These firms would not be subject to penalties if any of the employees receive subsidies. People with incomes up to 400 percent of the federal poverty level ($88,200 for a family of four) would be eligible for the vouchers if they spend between 8 and 9.8 percent of their income on premiums.

Senate bill

Employers with 25 or fewer workers and average wages of $50,000 or less could qualify for tax credits. Employers with 10 or fewer workers and average wages of less than $25,000 can get the full credit — up to 35 percent of premium costs between 2010 and 2013 and 50 percent thereafter. The credit would phase out as firm size and average wage increases.

The federal government would cover 80 percent of the cost of a retiree’s medical claims of more than $15,000 through 2013, with a cap at $90,000 — at which point the employer’s plan would pay the rest.

Senate bill

Would cover everyone with incomes less than 133 percent of the poverty level ($29,327 for a family of four).

Estimated number of new recipients: 16 million.

From 2014 to 2016, the federal government would pay all of the costs for covering the newly eligible. The share of federal spending would vary somewhat from year to year after 2016, but would average about 90 percent by 2019, according to the Congressional Budget Office. Currently, the federal government pays about 57 percent, on average, of the costs of Medicaid benefits. Nebraska is the only state that would receive 100 percent of the cost of expanding Medicaid.

Senate bill

Would increase the amount of drug costs covered by Medicare by $500 in 2010. And beginning on July 1, 2010, drug makers would provide 50 percent discounts on brand-name drugs and biologics that low- and middle-income beneficiaries have to pay for themselves once the coverage gap begins. Currently, older Americans in the coverage gap pay 25 percent of the cost of their drugs up to $2,830 in out-of-pocket spending, then the full cost of drugs up to $6,300 — a $3,470 “doughnut hole” — after which Medicare catastrophic coverage kicks in and seniors pay only 5 percent of the cost of additional drugs.

Senate bill

The basic plan would cover 60 percent of the cost of the benefits. The proposal would limit out-of-pocket costs at $5,950 year for an individual and $11,900 for a family.

The exchanges would offer three other benefit plans, covering 70 percent to 90 percent of costs. A plan for catastrophic coverage would be available to people up to the age of 30 and those who are exempt from the requirement to obtain insurance.

Senate bill

People with pre-existing conditions who have been turned down for health insurance could sign up for a high-risk insurance pool that would be available within 90 days and remain available until 2014. Within six months, insurers would be prohibited from denying coverage to children based on pre-existing medical conditions, from placing lifetime dollar limits on coverage and from rescinding coverage when a person becomes sick or disabled. The ban on exclusion based on pre-existing conditions would be extended to every one when the exchanges are operational in 2014.

Premiums for older people cannot be more than three times the premium for young adults.

Insurers competing in the new exchanges would be required to justify rate increases and those who raise prices excessively could be barred from the exchanges.

Insurers would be required to spend more of their premium revenues — between 80 to 85 cents of every dollar — on medical claims. According to a recent Senate Commerce Committee analysis, the largest for-profit insurance companies spend about 74 cents out of every dollar on medical care in the individual market.

Senate bill

Would allow children to stay on their parents’ insurance plans until they turn 26. Currently, states set the age at which adults can no longer be covered by their parents’ insurance.

Senate bill

The program would be financed with premiums paid by participants, through voluntary payroll deductions, with no federal subsidy. People could qualify for lifetime benefits if they became disabled after paying premiums for at least five years and working for three of those years. Individuals who have substantial cognitive impairments or are unable to perform two or three “activities of daily living,” like eating, bathing or dressing, would qualify.

The amount of benefits would vary, depending on the degree of a person’s disability, but could not average less than $50 a day. The Congressional Budget Office assumes that premiums would be $123 a month for benefits expected to average $75 a day, or about $27,000 a year. The amount of benefits would vary, depending on the degree of a person’s disability. The secretary of health and human services could increase premiums to ensure “the financial solvency” of the program over 75 years.

Senate bill

Health plans could choose whether to cover abortion or not. But states could prohibit the coverage of abortions by health plans that are offered for sale through the new insurance exchanges.

People who receive federal subsidies to buy insurance could enroll in health plans that cover abortion. But subscribers of health plans that cover abortion would have to make two separate monthly premium payments: one for all insurance coverage except abortion and one for abortion coverage.

Health plans that offer abortion coverage and receive federal subsidies would be required to segregate the federal money into separate accounts and use only the premium money and co-payments contributed by consumers to cover the procedure. State insurance commissioners would police the “segregation of funds.”

Senate bill

Could not buy insurance from the exchanges, even if they were able to pay the full cost themselves, without federal subsidies.

Senate bill

Children now enrolled in CHIP would continue to receive coverage through the program. The bill would provide money to extend the program for two more years, through 2015.

States would be required to maintain current coverage levels for children enrolled in CHIP and Medicaid until 2019.

Beginning in 2014, states would receive higher federal reimbursement for the program’s beneficiaries, increasing from an average of 70 percent to 93 percent.

Senate bill

$871 billion. Expected to reduce projected federal budget deficits by $132 billion.

31 million people would gain coverage, leaving 23 million uninsured.

Senate bill

TAX ON HIGH-COST HEALTH PLANS: Starting in 2014, would impose a 40 percent excise tax on high-cost employer-sponsored group health plans with premiums over $8,500 for individual coverage and $23,000 for family. The thresholds would rise each year by the inflation rate plus one percentage point. The bill would provide a special dispensation to police officers, firefighters, miners and construction workers, who have high premiums because they work in high-risk occupations.

MEDICARE PAYROLL TAX: Starting in 2013, would increase tax rate — from 1.45 percent to 2.35 percent – for individuals earning more than $200,000 a year and families earning more than $250,000.

FEES FROM HEALTH CARE SECTOR: Would impose annual fees, allocated by market share, on health care companies. Starting in 2010, drug makers would pay $2.3 billion a year. Manufacturers of medical devices would pay $2 billion in 2011 and $3 billion after 2017. For insurance companies, the fee would start at $2 billion in 2011 and gradually increase to $10 billion a year in 2017. Nonprofit insurance companies could be exempt if they spent a large share of their premiums on medical care rather than administrative costs.

FLEXIBLE SPENDING ACCOUNTS: Starting in 2011, would place a $2,500 annual limit on what people can set aside from their paychecks before paying taxes to use for health care expenses.

TANNING TAX: Would impose a 10 percent tax on indoor tanning services starting in 2010.

MEDICARE SAVINGS: Squeeze roughly $500 billion out of the projected growth in Medicare over 10 years, including $116 billion in cuts to federal subsidies for privately offered Medicare Advantage plans.