Senate Democrats Release $849B Health Reform Bill

The Senate Democratic Leadership has released its health reform bill for floor debate and eventually a vote by the full Senate, following passage earlier this month of a companion House bill, according to news reports.

Congressional budget analysts say the measure would cost about $849 billion over 10 years, offset by a combination of spending cuts and tax increases.

Here are some key provisions.

Reforms of the insurance industry

• Insurers would be prohibited from dropping coverage by 2010 and from excluding applicants for pre-existing conditions by 2014.
• Non-profit insurance cooperatives would provide medical coverage to members.
• A new government option would compete with private insurers, but only with the approval of each state.
• Insurance market exchanges would open in 2014, allowing individuals and small businesses to shop for insurance.
• States could band together to form regional exchanges, which would offer a package of minimum benefits.
• A voluntary federal program would provide long-term care insurance and benefits to individuals with severe disabilities.

Measures to expand the coverage to more Americans

• Most U.S. citizens and legal residents would have to obtain health coverage by 2013. Penalties for lack of coverage would be phased in, starting at $95 in 2014, $350 in 2015 and $750 by 2017, and there would be a higher penalty for failing to cover children.
• People with incomes up to 400 percent of poverty would receive subsidies to help buy insurance, and there would be limits on deductibles and out-of-pocket expenses based on incomes.
• Young adults up to age 26 would be able to stay on parents' healthcare policies.
• Medicaid would be expanded to cover anyone up to 133 percent of the poverty line.
• Employers with a workforce of 50 or more would pay a $750 penalty for each employee who obtains federally subsidized insurance.
• Small businesses could get tax credits for providing health coverage for employees.

New fees and taxes

• A tax on expensive "Cadillac health plans," amounting to a 40 percent of the value of insurance exceeding $8,000 for individuals and $21,000 for families. This provision is not in the House bill.
• Medicare payroll tax raised from 1.45 percent to 1.95 percent for individuals earning $200,000 or more and couples earning $250,000. This is also not in the House bill.
• Health insurers pay a total annual fee of $6.7 billion; drugmakers, $2.3 billion; medical device-makers, $2 billion, all starting in 2010.
• A 5 percent tax on elective cosmetic surgery, which is not in the House bill.

To learn more, read The New York Times' report on the Senate health reform bill.

Read the text of the proposed bill.