For those too poor to buy health insurance and who aren't covered by employers or eligible for Medicaid or Medicare, the government will offer subsidies. According to the plans, those making between 133 and 400 percent of the poverty level will be able to buy subsidized insurance from state-run insurance "exchanges." By 2014, similar exchanges will be created for small businesses to buy insurance for their employees, but starting this year, business employing less than 25 people are eligible for up to 35 percent tax credits for covering workers' health insurance premiums.

The legislation also strengthens coverage for children, young adults and those with pre-existing conditions. Six months after passage, insurance companies can't deny coverage to children based on pre-existing conditions, and in 14 years won't be able to deny it to anybody with pre-existing conditions. Children can also stay on their parent's plan until they turn 26.


In order to rally many Democrats, the package also scuttled a widely loathed exemption for Nebraska from all new Medicaid expenses, widely referred to as the "Cornhusker kickback."

And to rope in conservative Democrats wary of seeing public money going to pay for abortions, the package makes clear that abortions are not covered by insurance provided through the state-run exchanges, except in cases of rape, incest or risk to the mother's life.

Dollars and sense

The bill bears a hefty price tag, around $875 billion, with an additional $65 billion from the compromise package.

Funding for the legislation comes from a new 3.8 percent tax on investments for individuals making more than $200,000 and families making more than $250,000. Most controversially, the bill also slaps a 40 percent excise tax on so-called "Cadillac" insurance plans worth over $27,500 for families, although the reconciliation package delays the tax until 2018, giving Congress plenty of time to kill the tax.

The bills also hit indoor tanning salons with a 10 percent excise tax.

Although pricey, the non-partisan Congressional Budget Office expects the bill, plus changes from the reconciliation package, to actually help the government save money, by slashing the federal deficit by $143 billion from 2010 to 2019, and then by more than $1 trillion in the following decade.

In part, the savings come from scale-backs to Medicare as well as changes in the way the government funds college education. Under proposed reforms in the reconciliation package, the federal government will no longer guarantee student loans provided through private banks, but will instead administer the same loans directly to student borrowers, while also increasing the Pell Grant program. The CBO estimates these changes alone will result in over $19 billion in savings.

More Focus on Reform

More Industry Headlines