The Details Of The New Merged Senate Bill

pelosi_reid_0705Moments ago, Senate Majority Leader Harry Reid (D-NV) released the merged Senate health care bill. According to preliminary CBO analysis, the Senate bill costs $849 billion over 10 years and reduces the deficit by $127 billion over 10 years. The legislation could further reduce the deficit by up to $650 billion cut over the following decade, the budget office says.

The bill –which includes a national public health insurance plan with the option for states to pass a law and opt-out — reduces the uninsured by 31 million Americans and covers 98% of Americans by 2019.

The bill increases the threshold for the so-called Cadillac tax, raises the payroll tax by 0.5% on individuals who earn more than $200,000 and families earning more than $250,000 a year, and cuts waste from Medicare. The payroll tax increase would only apply to employees (not employers) and generate $54 billion.

The bill maintains the Senate Finance Committee’s immigration language and preserves much of the more moderate Capps-abortion compromise. Federal dollars can only be used to pay for abortions when the pregnancy threatens the life of the mother or results from rape or incest; private premiums must be used to pay for any other type of abortion, including those for health reasons. Each plan in Exchange will decide whether to cover additional abortion services and at least one plan in each market must offer abortion services and one plan must not. In the public option, the Secretary can cover abortion only if the procedure is financed with private funds.

Since the Exchanges don’t open open until 2014, the bill offers immediate insurance reforms for Americans purchasing coverage in the individual market. Insurers will no longer be allowed to rescind coverage or impose life-time or annual limits and will be required to meet a medical-loss ratio of 85 percent. Americans who are denied coverage because of a pre-existing condition would participate in a national high-risk pool program until the Exchanges are established. Young Americans can stay on their parents’ policies until they turn 26. Small businesses will receive a tax credit.

Below is a comparison of the relevant provisions in the House and Senate legislation:

Senate Bill ($849 billion/10 years) House Bill ($894 billion/10 years)
Individual Mandate Yes, penalty of $750 by 2016 for those don’t purchase coverage. ($95 penalty in first year) Yes, penalty of 2.5% of income for those who remain uninsured
Employer Mandate Free rider provision. Employers would have to pay whichever is lower: $3,000 per every employee who receives a subsidy in the Exchange, or $750 for every employee (not just the subsidized worker). Yes, employers who don’t’ offer coverage would pay a fee equal to 8% of their payroll
Medicaid Expansion Up to 133% FPL. 100% federal funding for the first 3 years, then revert to Senate Finance language. Up to 150% FPL
Subsidies Between 133 – 400% FPL on sliding scale; spend 2%-9.8% of income on premiums Between 133 – 400% FPL on sliding scale; spend 2%-12% of income on premiums
Public Option National public plan, states can opt-out by 2014. Co-ops are also available. Yes, HHS secretary negotiates rates
Financing Excise tax on policies above $8,500 (individuals) and $23,000 (families), increases the payroll tax by .5% (increases to 1.95%) on individuals who earn more than $200,000 and families earning more than $250,000 a year, tax on insurers, pharmaceuticals, and medicare devices; Medicare savings 5.4% surtax on individuals earning > $500,000, couples earning more than $1 million; Medicare savings