Health Insurance Reform

In a 9/26/09 WSJ article, Janet Adamy breaks down the health care bill that is working its way through the Senate Finance Committee. It will probably be the core of final legislation. Here’s the short and sweet:

Income: Family of four making less than $22K per year, no more than 2% of income for health insurance premiums through state run exchanges. Subsidy decreases with income with a cap of $88K for a family of four, who would pay no more than 12% of income on premiums. Credits not available till 2013.

Individual Mandate: Fines as high as $1900.

Pre-existing Conditions: Can buy plans through high risk pools till 2013.

Young people: Low cost catastrophic and preventive care policy available for those less than 25 years old.

Insurance Companies: Can’t drop people when they get sick. Limits on extra premium charges for age, family size and smoking.

“Cadillac” plans: New taxes on insurers for individual plans more than $8K, family plans more than $21K. Retirees and employees with high risk jobs will be exempt. Insurer will no doubt pass tax on to employers who will pass it on to employees or simply stop offering the plans.

Medicare: No charge for preventative services. New discounts on drugs to offset the so called “doughnut hole” gap in Medicare D coverage. Competitive bidding by insurers for Medicare Advantage programs.

Employers, Large: More uniform insurance packages throughout the states – a plus for large employers. Companies with more than 50 employees pay a fine of $400 if they don’t provide employees with affordable health insurance. Size of fine and other provisions regarding flexible spending accounts may change in future versions.

Employers, Small: Provide at least half the cost of employee’s premiums. Tax credits. State run insurance pools.

Doctors: Conflict of interest rules so that doctors could not refer patients to hospitals that they owned. Comparison reports on doctors’ use of medical resources. Those in the bottom 10% of their category would get lower payments from government programs like Medicare.

Hospitals: Bill patients with no insurance at the same rates as they bill those with insurance as long as the patients qualify for financial assistance. No overly aggressive collections on past due bills.

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