Health Care Reform: An Overview

This an Overview of what Obamacare is going to do in order to provide Health care for all Americans, But I think it is essential to develop the best health care system in the world for all Americans. In that "best of all plans" we need to reward new technological breakthroughs and procedures, pay promptly for services and goods provided, and develop standards for acceptable care and facilities. I will use the House plan as the jumping off point and note differences with the Senate’s version. Here we go

The Current Proposed Plan:

· Costs $1.04 trillion over 10 years (Congressional Budget Office) [Senate plan would cost more]

· Covers 97% of legal American citizens

· Mandates all individuals to purchase insurance or pay penalty of about 2.5% of gross income

· Establishes insurance exchange where consumers can compare policies and buy coverage

· Includes Public Options to compete with private insurance

· Individual subsidies: The government will offer assistance (credits) on a sliding scale up to four times the poverty level (up to $43K for individual and $88K for a family of 4)

· Requires employers to provide health coverage or pay a fee to the government [Senate plan is $750/employee for employers with > 25 employees]

ü Payroll > $400,000 = 8% of Wages

ü Payroll $250,000-$400,000 = to be determined (smaller penalty)

ü Payroll < $250,000 = NO FEE

· Bars insurance companies from denying coverage due to illness or health status

· Eliminates insurance company lifetime caps

Where’s this money coming from?

Under the House plan, there are three main sources available to fund health care [The Senate plan seemed to pass over this not-so-small detail]:

1) New Taxes on Wealthy Generating $544 Billion

· 5.4% surtax income > $1M

· 1.5% surtax on income $500,000 - $1M

· 1% surtax on income $350,000 - $500,000 (starts at $280,000 for individuals)

2) Surcharges on Businesses

3) Reduction in spending for Medicare and Medicaid

Sticking Points:

· New taxes on rich

· Impact on small businesses

· Change in care–Americans will wonder whether their doctors will participate in public op

What’s next?

Now the fun begins. The Senate Health and Finance Committees must agree to a unified version of the bill. Then, the House and the Senate start to wrangle over a compromise. Once that’s done, the bill goes to the President for signing.