PRESIDENT OBAMA'S LEGACY ON HEALTH CARE BILL
With just a few hours to another landmark in the United States of America, President Barack Obama is leading his Democratic allies in an all-out campaign to win over wavering lawmakers ahead of a cliffhanger Sunday vote on his historic health care overhaul. The bill aims to extend coverage to 32 million Americans who now have none, bringing the world's richest country closer than ever to guaranteeing health insurance for all of its citizens, with 95 percent of Americans covered.
Proposed changes to the Senate-passed health care bill include a scaled-back tax on high-cost health insurance plans - a provision that is widely unpopular with House Democrats - and more money to help states pay for an expansion of Medicaid, the state-federal health program for the poor and disabled. The new measure, called a reconciliation bill, also would take additional steps to close a gap in Medicare prescription drug coverage and to help low- and middle-income Americans purchase health insurance through new insurance exchanges.
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Here are some of the major changes the reconciliation proposal would make to the Senate-passed bill:
Heftier subsidies: Compared to the Senate legislation, the reconciliation bill would provide more generous subsidies to low- and moderate-income Americans to help them buy health coverage.
The "Maserati" tax: The levy on high-cost insurance plans is scaled back and delayed, rendering it more a "Maserati" than a "Cadillac" tax. It would apply only to the portion of plans costing more than $10,200 a year for individuals, up from $8,500, and $27,500 for families, up from $23,000. The tax wouldn't kick in until 2018, reducing the projected revenue to the government by 80 percent. Over time, however, the tax would hit more and more plans, because the tax's threshold is set to increase at the rate of inflation while premiums are expected to continue to grow much more quickly than that.
Closing the doughnut hole: Under the new bill, seniors who hit the gap this year would get $250 to help cover the costs of their medications. Starting next year, they'd get a 50 percent discount on brand-name drugs, with the cost borne by the drug industry. In subsequent years, the discounts would expand and begin covering generic drugs, with the expense picked up by the government. By 2020, the discounts would reach 75 percent.
Shift in Medicare Advantage payouts: The new bill, besides reducing payments overall, would shift the funding; some high-cost areas would be paid 5 percent below traditional Medicare, while some lower-cost areas would be paid 15 percent more than traditional Medicare.
A raise for doctors: Primary care doctors would get a Medicaid payment boost in the reconciliation bill. Beginning in 2013 and 2014, the doctors' payment rates would be on par with Medicare rates, which typically are about 20 percent higher than Medicaid. The goal is to ensure that there will be a sufficient number of doctors willing to care for the millions of additional people who would become eligible for Medicaid under the health care overhaul.
Pushing up the Medicare tax: The Senate bill adds 0.9 percent to the Medicare payroll tax on earned income above $200,000 for individuals, or $250,000 for couples. Under the reconciliation bill, starting in 2013, people in those income brackets also would face a 3.8 percent tax on investment income, such as interest, capital gains and dividends.
Penalty for not having insurance: Under the new bill, most Americans without insurance would face an annual penalty, starting in 2014 at $95 - the same as in the Senate bill. But in following years, the penalties in the reconciliation bill are slightly different. Those without insurance in 2016, for example, would pay the greater of two alternatives: a flat fee of $695, down from the Senate's $750, or 2.5 percent of their income, up from 2 percent in the Senate bill.
Expanding Medicaid: The reconciliation package differs from the Senate-passed bill in several ways. It would delete a provision dubbed the "Cornhusker kickback" that would have exempted Nebraska from paying any cost of a Medicaid expansion included in the bill. But it would provide full federal funding to all states for newly eligible Medicaid recipients for three years. And it would give additional funding to states like Vermont and Maine that have already moved to cover adults without children, which is not required under the Medicaid program.
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Medicare spending board: The Senate bill would create an independent, 15-member board to recommend ways to control Medicare spending. The board remains in the reconciliation package, but would be expected to produce just about half of its original projected savings of $23 billion in the Senate bill. That's because the new proposal would make greater cuts in Medicare Advantage plans.
Despite this Republicans have mounted a fierce campaign designed to stop the bill, which they say would hike taxes and lead to a government takeover of the mostly private health care industry. Other stakeholders such as religious institutions as well as the American citizens have varied reactions to the above health care bill.
The health care bill, which would be the most significant social reform legislation in 40 years, is seen as crucial to establishing Obama's political authority, and to defining his presidential legacy.