The health care reform breakdown

President Barack Obama signs the health care reform bill After decades of failed attempts by a string of Democratic presidents and a year of bitter partisan combat, President Obama signed legislation on March 23, 2010, to overhaul the nation’s healthcare system, guaranteeing access to medical insurance for tens of millions of Americans.

The long legislative battle came to an end in a dramatic Sunday evening vote on March 21, when the House approved, 219 to 212, the healthcare bill passed by the Senate in December.

Republicans, who voted unanimously against the bill in both houses, vowed to work to repeal the bill and to challenge it in court.

The landmark bill that Obama signed will provide coverage to an estimated 30 million people who currently lack it.

The measure will require most Americans to have health insurance coverage, adding 16 million to the Medicaid rolls and subsidizing private coverage for low- and middle-income people. It will regulate private insurers more closely, banning practices such as denial of care for pre-existing conditions. The law will cost the government about $938 billion over 10 years, according to the nonpartisan Congressional Budget Office, which has also estimated that it will reduce the federal deficit by $138 billion over a decade.

Change that is now

It will take a decade for all the components of health care reform signed into law to be up and running. But even though some aspects of the legislation won’t take effect for several years, there are changes that will take effect right now.

For instance, this year, small businesses will benefit from a tax credit that will help cover their workers, and exclusion of pre-existing conditions for children and prohibiting recessions [when an individual belongs to a health plan and they decide you did something wrong on your application or something and they exclude you from the plan] will be eliminated. In addition, the bill will extend dependent coverage to young adults until they are 26 years old. Young adults make up a large percentage of the uninsured, because they’re often in college and have limited access to insurance. When they are excluded from their parent’s plans, they may not yet have a job that offers coverage. The bill will also provide $250 million in rebates for seniors on Medicare to help close the gap in prescription drug coverage. Next year, there will be a 50 percent discount on all brand-name drugs, and by 2020, the gap will be completely closed.

A large portion of the newly signed bill is for Medicaid.

By 2014, Medicaid coverage will extend to everyone earning less than 133 percent of the federal poverty level and it will include childless adults who are currently excluded. So if you’re uninsured in 2014, and you make less than 133 percent of the poverty level, you will get Medicaid even if you don’t have any children.

By that same year, the healthcare reform bill will mandate that most US citizens and legal residents purchase “minimal essential coverage” for themselves and their dependents. They can get this through their employers, or, if an employer doesn’t offer health insurance, it can be purchased through new marketplaces that will sell policies to individuals.

Theoretically, the marketplaces would allow individuals and small businesses to band together and get better prices and more variety in health insurance options – the kinds of breaks that big corporations currently negotiate for their employees.

If citizens ignore this mandate and don’t get health insurance, they will have to pay a tax penalty to the federal government, beginning in 2014. This fine starts relatively small, but by the time it is fully phased in – in 2016 –it will be substantial.

An individual without insurance would have to pay up to whichever is greater: $695 for each uninsured family member, up to a maximum of $2,085, or 2.5 percent of his or her household income.

There are exceptions. Certain people with religious objections would not have to obtain health insurance. Nor would American Indians, undocumented immigrants or people in prison.

Immigrants

For immigrants, how they will benefit from healthcare reform depends on their immigration status.

Fifteen to 20 million people will remain uninsured under the new bill, the majority of them undocumented immigrants – they will not be required to buy insurance or pay a fine of $750, a requirement that applies to the rest of the U.S.

population. Certain groups will also be exempt for religious or ethnic reasons, such as American Indians.

 

Undocumented immigrants will not benefit from the expansion of Medicaid benefits or from government subsidies created to help citizens and residents to buy private health insurance in the exchange program.

Private insurance companies that receive subsidies will not be able to sell insurance in the exchange program to undocumented immigrants who want to buy a plan – even with their own money. It is possible that these companies will continue to offer coverage outside of the exchange, but it is unlikely that prices for these plans will be affordable for most undocumented immigrants.

Immigrants who have papers – legal residents and naturalized citizens – will see an immediate benefit from the reform. They will be required to have health insurance or pay a fine of $750 beginning in 2014, but they will benefit right away from the new requirement for employers to provide health insurance for their workers. They will also benefit from the expansion of Medicaid and government subsidies to get health coverage through the exchange. Single people will qualify for the benefits if they earn less than $43,000 a year. A family of four will qualify if the total family income is less than $88,000 per year.

Another good thing: health care reform will not end the Child Health Insurance Program (CHIP), the federal program that helps millions of parents buy insurance for their children at low cost.

However, one disadvantage is that legal residents in most states will not be able to access Medicaid or other state benefits until they reach five years of residence (although they will have access to government subsidies immediately). With the reform, they would be penalized for not having health insurance.