The U.S. House of Representatives passed the Senate’s version of health care legislation by a partisan vote of 219–212. President Obama signed the bill mandating health care coverage for most Americans into law.
The House also passed a separate bill to modify the newly enacted law. The so-called “reconciliation bill” is now being debated by the Senate, which is expected to pass the measure with several minor changes that require final approval by the House vote before it is signed into law by President Obama.
Given the fact that final action on health care has not yet taken place, the following is a brief summary of what the final law is expected to contain. SEMA will provide a comprehensive overview when action has been completed.
- The law is intended to extend health insurance coverage to about 32 million uninsured, increasing coverage to 95% of Americans (from current 83%). It is expected to cost about $940 billion over 10 years and will be financed by a variety of new taxes, such as a 3.8% Medicare tax on couples making more than $250,000.
- The law creates Small Business Health Options Programs (SHOP Exchanges), operated by the states, which will allow small businesses (50 employees) and individuals to pool together to purchase insurance that meets or exceeds new federal minimum standards. The SEMA-supported exchanges should spur competition, thus potentially allowing small-business owners to provide insurance options with lower premiums. The exchanges are to be operating by 2014. Beginning in 2017, states will have the option of opening the exchanges to businesses with more than 100 employees. Small businesses will also be provided tax subsidies at staggered levels to provide health care coverage.
- Companies with more than 50 employees are not required to offer insurance but would effectively pay fines if they did not. The fines would be triggered when one employee receives a government subsidy. The fine would be $2,000 per full-time employee beyond the first 30 employees by 2014. (e.g., a firm with 51 workers that does not offer coverage would pay $42,000 annually.)
- All U.S. citizens and legal residents would be required to have minimum levels of health coverage. Individuals without coverage would be fined $325 in 2014. By 2016, it would rise to 2.5% of taxable income or $695, whichever is greater. Tax credits for individuals and households would be available to help subsidize the cost.
- Insurance companies are barred from denying coverage to anyone with pre-existing illness. Parents are allowed to keep their children on their health plans until they reach age 26. Insurance companies are prohibited from putting lifetime caps on payouts.
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