What's in the Health Care Overhaul Bill

WASHINGTON - Now that health care reform is moving from a concept to a reality, Americans who haven't had time to delve into the details of the health care plan want to know how this will affect them. What we found is that there aren't many simple answers, and it all depends on who you ask.

We went to the conservative Heritage Foundation and the liberal Center for American Progress to ask their analysts how the changes will take shape.

"It's a huge, huge gamble," says Ed Haislmaier, senior fellow for health policy studies at the Heritage Foundation.

Health care researcher and blogger Igor Volsky of the Center for American Progress sees it another way, saying, "I think many of those critics are now changing the rules midstream."

The easiest reforms will take place in six months to a year. Those include allowing young people to stay on their parents' insurance until age 26, making preventive measures such as cancer screening, free, and extending seniors' prescription coverage under Medicare Part D - which currently stops at $2,830 of total drug costs.

The more difficult changes are set to take place in 2014, when all Americans are required to have health insurance.

"This really takes everyone's health care, some 300 million Americans, and throws it up in the air, hoping that the pieces come down in some semblance of order," says Haislmaier

Those with incomes below 133 percent of poverty-- currently $14,403 for singles and $29,326 for families of 4-- would get coverage under their state's Medicaid program. Everyone else, either gets it on the job, or will have to buy it from the new exchange.

How much will it cost?
The Congressional Budget Office weighed in on that question at the request of Senator Evan Bayh in November. According to its estimates, premiums for large group insurance-- under which 70 percent of Americans are covered-- aren't expected to change much. Small group insurance participants, about 13 percent of the market, would only go up 1 percent at the most.

Premiums for individual insurance will increase - as much as 13 percent. CBO predicted the cost for premiums for "non-group" insurance in 2016, two years after the mandates kick in. It says premiums for will cost on average $5,800 for singles, $15,200 for families of four.

CBO predicts 57 percent of that group will also be eligible for federal subsidies, which are expected to cover about 2/3 of the cost.

"So they would be paying less than if no reform had passed at all," explains Volsky.

The subsidies are for those with incomes between 133 and 400 percent of poverty. In 2009 dollars, that's singles with incomes up to $43,320, and families of four with incomes up to $88,200.

The fine for not buying insurance is 2 percent of income. So let's do the math: A single person earning $44,000 would have to choose between paying a fine of $880.00 (if the tax is levied on gross income, not AGI) or paying $5,800 to buy a basic health insurance policy, plus out of pocket costs.

CAP's Volsky says the federal government will have to embark on an aggressive marketing campaign to make sure those people do sign up for the insurance exchanges.

"It only works if you have more healthy people to balance out the sick people. It's going to be interesting to see what actually happens," says Volsky.

Heritage believes some states and employers will be doing the same cost/benefit analysis -- weighing the fines versus the savings to skip out of the mandates.

"There will be a massive exercise in either cost shifting or avoiding," predicts Haislmaier.

The biggest question ism, will this plan really reduce the deficit? That all depends on Congress, and if legislators continue to apply the rules of the bill-- such as reducing Medicare payments and increasing certain taxes-- as they are currently written.
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Congressional Democrats released a final version of President Barack Obama's health care overhaul bill in advance of passage Sunday by the House. Some features of the legislation, which makes changes to the bill the Senate passed on Christmas Eve:

COST: $940 billion over 10 years, according to the Congressional Budget Office.

HOW MANY COVERED: 32 million uninsured. Major coverage expansion begins in 2014. When fully phased in, 95 percent of eligible Americans would have coverage, compared with 83 percent today.

INSURANCE MANDATE: Almost everyone is required to be insured or else pay a fine. There is an exemption for low-income people. Mandate takes effect in 2014.

INSURANCE MARKET REFORMS: Starting this year, insurers would be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents would be able to keep older kids on their coverage up to age 26. A new high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear.