Monday, March 22, 2010

Health Care: Now what happens and when?

The $940 billion health-care overhaul will take nearly a decade to roll out in full. A look at the key parts of the bill and when they go into effect.


■Subsidies begin for small businesses to provide coverage to employees.
■Insurance companies barred from denying coverage to children with pre-existing illness.
■Children permitted to stay on their parents' insurance policies until their 26th birthday.


■Set up long-term care program under which people pay premiums into system for at least five years and become eligible for support payments if they need assistance in daily living.

Taxes and fees

■Drug makers face annual fee of $2.5 billion (rises in subsequent years).

Taxes and fees

■New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.
■Tax on wages rises to 2.35% from 1.45%.
■New 3.8% tax on unearned income such as dividends and interest.
■Excise tax of 2.3% imposed on sale of medical devices.

Cost control

■Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services.


■Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage. Insurance companies barred from denying coverage to anyone with pre-existing illness.
■Requirement begins for most people to have health insurance. Subsidies begin for lower and middle-income people. People at 133% of federal poverty level pay maximum of 3% of income for coverage. People at 400% of poverty level pay up to 9.5% of income. (Poverty level currently is about $22,000 for a family of four.)
■Medicaid, the federal-state program for the poor, expands to all Americans with income up to 133% of federal poverty level.
■Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer's contribution. Tax credits phase out for larger businesses.

Taxes and fees

■Employers with more than 50 employees that don't provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees.
■Insurance industry must pay annual fee of $8 billion (rises in subsequent years).

Cost control

■Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

Taxes and fees

■Penalty for those who don't carry coverage rises to 2.5% of taxable income or $695, whichever is greater.


■Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits it.

Taxes and fees

■Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.

—Sources: House bill; Kaiser Family Foundation

Corrections & Amplifications
The House health legislation imposes a 2.3% excise tax on the sale of medical devices. An earlier version of this article incorrectly said the tax was 2.9%, the figure before a last-minute change to the legislation.


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