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Reality Check: Health Care Reform Will Affect People Differently

Published On: Mar 22 2010 07:49:53 AM CDT   Updated On: Mar 23 2010 05:57:02 AM CDT

Federal legislation to overhaul the nation's health care system could soon be headed for President Barack Obama's desk, bringing to a conclusion months of bitter partisan battles about the scope and shape of the reform. And yet, how this legislation will affect the public isn't clear yet.

The controversial measure's progress through Congress has been contentious and succeeded in mudding what's exactly in the bill. What is known is that the outcome of the bill won't be the same for everyone. It will depend on whether people have insurance now, how much money they make and the changes won't happen all at once, WISC-TV reported.

First, health insurance coverage is now required for everyone, but the legislation tries to set up a safety net for 32 million Americans who can't afford it or have been denied coverage because of illness. To help pay for the coverage, taxes will go up immediately for high-wage earners, individuals making more than $200,000 and families more than $250,000, in the form of a 1-percent hike in the Medicare payroll tax.

Health care coverage will begin in phases for those who don't have it. First, a high-risk pool will start within six months for those who've been denied coverage because of pre-existing conditions. Then, in 2014, the government will begin state-run insurance exchanges where citizens can buy coverage. Low-income residents can get subsidies to buy insurance through the exchanges, and families making up to $88,200 will be eligible.

Also in 2014, a penalty would start for people who don't have insurance. At first, it will be an annual fine of $95 for individuals or up to 1 percent of their income, whichever is greater. By 2016, that fine goes up to $695 or 2.5 percent of their income.

But what about those who have insurance already through their employers? If employers' plans cost more than 9.5 percent of a worker's income or a family of four makes less than $88,000 a year, the worker or family could switch to an exchange plan.

For most other people who have coverage, little would change. Insurance companies couldn't drop someone if they got sick and can't prohibit how much coverage a person can get in a lifetime. They'll also have to allow children to stay on plans until they're 26 years old, and can't refuse any children for pre-existing conditions.

The exceptions to this are if someone has a high-priced insurance plan. In 2018, a person would have to start paying a 40-percent tax on it. If the person uses flex spending accounts to pay for medical costs, those accounts would be capped starting in 2013. Limits would be $2,500 and a person couldn't use it for over-the-counter medicine.

The bill also includes changes to Medicare and Medicaid, and new taxes on insurance companies to help pay for the programs.

All of this of course comes at a hefty price tag. The Congressional Budget Office figures the cost at $940 billion over the next 10 years, although it could reduce the deficit by $1.2 trillion in two decades, WISC-TV reported.

Congressional Delegation Split Over Legislation

Wisconsin's congressional delegation voted for the health care bill along party lines.

All five Democrats -- U.S. Reps. Tammy Baldwin, Steve Kagen, Ron Kind, Gwen Moore and Dave Obey -- voted in favor of the measure. The three Republicans -- U.S. Reps. Tom Petri, Paul Ryan and Jim Sensenbrenner -- voted against it.

Those in favor of the bill said that they think it will provide coverage for millions who have none.

"I've had mothers take me aside and say, 'My daughter was ill five years ago and now I can't find any health insurance because they say she has a pre-existing health condition.' All of these practices are going to come to an end because of this legislation when its fully implemented," Baldwin said.

However, Ryan said that he thinks the legislation makes the problems worse.

"Obviously, I think this is a very bad public policy. We could have done much better job. We could have passed legislation on a bipartisan basis to fix what's broken in health care without breaking what's working and turning the system upside down," he said.

Baldwin called the vote "amazing" and said she saw colleagues tearing up on the floor as they passed the bill.

Ryan said that Congress is getting more than a 100,000 calls an hour about the bill. He said he's committed to repealing it.

Stay tuned to WISC-TV and Channel 3000 for continuing coverage.

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