Health Care Reform as Passed by Congress March 23, 2010

The historic health overhaul that President Obama signed on March 23, 2010, in advance of further "fixes" in a reconciliation bill, will make sweeping changes in our health system. There is universal agreement that the current system desperately needs to be reformed: it is hurting too many patients. The disagreements relate to exactly what the changes are and who will pay for them. The bill passed by Congress includes new consumer protections (which all agree is desperately needed), expanded coverage of the uninsured (all agree this is needed, the question is who is going to pay for it), penalties for people and businesses who don't buy insurance, attempts to control rising costs by "a variety of means" (the devil here will be in the details, but includes decreasing the reimbursements to physicians), and Medicare "savings" (a euphomism for "decreasing reimbursements to doctors and hospitals" as well as rationing of care), and new taxes to pay for it all. It is completely unbelieveable that unlimited free healthcare will be provided to 34 million Americans while saving the taxpayer money. You will pay for it with higher taxes, and I will pay for it by being forced to provide care at below my cost of providing it, and I will be forced to do so at threat of losing my license. Much of this coercion is already in place. Currently, physician reimbursements for providing services to Medicare patients has decreased over the last decade by about 25%, while the physicians' cost of providing that care has risen by more than 25%, resulting a current reimbursement that is close to, or at times below, the cost of providing care. This is the reason so many physicians can no longer afford to see Medicare patients. You cannot pay your physician, over and above what Medicare provides; Congress made this illegal. Both you and your physician can go to jail for that.

Here is a year-by-year look at what's in store, assuming final Senate passage of a package of amendments to the landmark bill both chambers already have passed:

2010

Adults who can't get coverage because of a pre-existing medical condition can join a high-risk insurance pool (this is an interim step pending the launch in 2014 of competitive health insurance marketplaces and premium subsidies).

Insurance companies will have to issue policies for children with pre-existing conditions. They will not be allowed to revoke existing policies if people get sick. Lifetime limits on coverage will be banned in new coverage and annual limits will be restricted. Preventive services will be fully covered, with no co-pays or deductibles. Coverage will be available for dependent children until they turn 26.

People in the Medicare prescription drug program will receive a $250 rebate as the first step in closing the coverage gap, or "doughnut hole," that requires them to pay full freight after they have spent $2,700 on drugs. The gap would be phased out entirely by 2020.

Certain small businesses will start getting tax credits to offset up to 35 percent of the cost of insuring their employees. That will rise to 50 percent in 2014.

Plans must have "an effective appeals process" for decisions and claims. States will get grants to set up programs that help consumers with complaints or questions about health insurance. The federal government will set up a website to help people in different states figure out their insurance options.

The first tax increase kicks in: A 10 percent tax on indoor tanning services. Many have raised questions about how this small increase in revenue will pay for all of the above increased spending.

2011

Medicare changes will include free annual wellness visits; little to no cost-sharing for preventive care, like immunizations and cancer screenings; bonuses to primary care doctors and general surgeons; a new Center for Medicare and Medicaid Innovation to test ways to provide better, more efficient care; and, the start of a phase-out of overpayments to private Medicare Advantage insurers. People in the prescription "doughnut hole" will receive discounts on prescriptions.

2012

There will be new money for primary care services and new incentives to encourage doctors to join together in "accountable care organizations." The government will track re-admission rates at hospitals (this is currently done) and impose penalty fees on hospitals with the highest rates.

2013

This is when higher taxes will begin for households with income above $250,000 and individuals above $200,000. The Medicare payroll tax on earnings above those amounts will rise from 1.45 percent to 2.35 percent. Unearned income above those amounts, such as dividends, will now be subject to a 3.8 percent tax.

In addition, maximum contributions to pre-tax Flexible Savings Account contributions will be limited to $2,500 a year (down from the current $3,050 for individuals).

There will be a new 2.9 percent excise tax on medical devices. It is unclear how a tax on health services will decrease the cost of health care.

Medicare will sponsor a national pilot program on "payment bundling" -- paying hospitals, doctors and other providers based on patient outcome, not services provided.

2014

More consumer protections begin. Insurance companies will not be able to deny policies to anyone based on their health status or to refuse coverage of a treatment based on pre-existing health conditions. This is an important change in the health care system and one that is desperately needed. The ability of health insurance companies to charge higher rates to people based on age, geography, family size or tobacco use will be limited. Annual limits on coverage will be abolished.

Each state will open a health insurance exchange, or marketplace, for individuals and small businesses without coverage. People will be able to comparison shop for standardized health packages. There will be a multistate private plan available nationwide, supervised by the U.S. Office of Personnel Management. Tax credits will be available to make insurance and care affordable for people who make too much to qualify for Medicaid, but have incomes below 400% of the poverty level.

Most people will be required to buy insurance coverage or pay penalties that start at $95 in 2014 and rise to $695 or 2.5 percent of income in 2016. Employers with 50 or more workers who do not offer coverage will have to pay annual fees.

Medicaid eligibility will increase to 133 percent of the poverty level ($14,404 for individuals) for everyone under 65 (when they qualify for Medicare).

2015

A new Independent Payment Advisory Board will be formed to come up with ways to lower Medicare costs and promote better care. The recommendations will go to Congress and private insurers.

2018

This is when the most controversial new tax begins, a 40 percent excise tax on insurance companies and plan administrators for any family plan that costs more than $27,500. The tax applies to the cost above that threshold. There are higher thresholds for retirees over 55 and plans that cover workers in high-risk jobs.

2019

The new system will have reduced the number of uninsured people by 32 million, according to the nonpartisan Congressional Budget Office. That will leave an estimated 23 million uninsured, one-third of them illegal immigrants. Coverage of legal residents too young for Medicare (under age 65) will be 94 percent, up from 83 percent now.