Senate Takes A Step Forward Towards Healthcare Reform

Senate healthcare bill expands coverage through insurance exchanges, Medicaid expansion.  In an historic move, the Senate voted to reform the way healthcare coverage is structured in the United States.  The 2,077-page Patient Protection and Affordable Care Act, which passed 60 – 39, has the goal of restructuring the $2.5 trillion annual healthcare sector in just 10 years.

With an $871 billion price tag, the legislation will extend coverage to 41,000,000 Americans who currently lack any healthcare insurance.  According to the Congressional Budget Office, 94 percent of citizens will have healthcare coverage by 2019.  Of that, 26,000,000 will have coverage through innovative insurance exchanges; an additional 15,000,000 will be covered by expanded Medicaid and children’s health insurance programs.

In essence, the bill requires all legal residents to buy healthcare insurance.  To offset the cost, the government will offer hundreds of billions of dollars of subsidies and expands Medicaid to people earning less than 133 percent of the federal poverty level.  Individuals who fail to buy coverage face a $95 penalty in 2014, which rises to $750 in 2016.  Companies with more than 50 employees who do not offer coverage would be subject to a $750 penalty for each full-time worker who has subsidized coverage through an insurance exchange.

In one little-discussed provision, the legislation creates an Independent Payment Advisory Board, which would control Medicare payment formulas.  The board also would make yearly recommendations to the president, Congress and private entities on actions they would like to take to improve quality and control the rate of cost growth in the private sector.  The Medicare recommendations are non-binding in years where growth is slower than the targeted rate.

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