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More to be insured, get consumer protections

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Posted on March 25, 2010 |
By Andy Kirkaldy



MIDDLEBURY — Health care reform legislation passed by the U.S. House of Representatives on Sunday and signed by President Obama on Tuesday calls for sweeping changes in American medical care, some of which will take effect this year and others that will be phased in over the next several years. 

In a conference call Monday, U.S. Rep. Peter Welch (D-Vt.) gave some Vermont-specific data on how the new law will hit home. State Rep. Steve Maier (D-Middlebury), a member of the Vermont House’s health care committee, also provided research from the state’s Health Care Reform Commission on the Vermont impact of federal reform.

Maier said the commission completed 5,000 surveys of uninsured and underinsured Vermonters to gather its data.

Overall, the new law will extend coverage to an estimated 32 million uninsured, about half of them to be added be expanded Medicaid eligibility.

It will also bar insurers from denying coverage on the basis of existing medical conditions or from dropping those who become sick. According to the non-partisan Congressional Budget Office, the bill will cut the federal deficit by an estimated $138 billion over a decade. 

According to CNN, the legislation will:

• “Subsidize insurance for a family of four making up to about $88,000 annually, or 400 percent of the federal poverty level.”

• Establish “a series of health insurance exchanges designed to make it easier for small businesses, the self-employed and the unemployed to pool resources and purchase less expensive coverage.”

• “Significantly” expand Medicaid, thus “ensuring coverage to those earning up to 133 percent of the poverty level, or just over $29,000 for a family of four.”

• Cut projected Medicare spending by “roughly $500 billion, in part through reductions in the Medicare Advantage program.” CNN noted that “Democratic leaders have promised the reductions will not affect service to Medicare recipients.”

• Increase Medicare payroll taxes on families making more than $250,000.

• Beginning in 2018, impose a “40 percent tax on insurance companies providing ‘Cadillac’ health plans,” starting at $10,200 for individuals and $27,500 for families. 

• Require individuals to buy health insurance or face a fine of up to $695 or 2.5 percent of their income — whichever is greater. The bill includes a hardship exemption for the poor. 

• Require companies that employ more than 50 to pay a fee of $2,000 per worker if the firms don’t provide health coverage — if any of their workers rely on government help to buy coverage.

• Allows parents to keep children under their health insurance umbrellas until the age of 26.

VERMONT IMPACT

In Vermont, Welch estimated that:

• 156,000 families would be eligible for federal help in purchasing insurance.

• 7,000 Vermonters who now lose coverage every year would be able to keep it.

• 22,000 Vermont businesses with fewer than 100 employees would qualify for tax credits to help them pay for workers’ insurance. The commission’s research stated that “11,500 small businesses could be helped by a small business tax credit to make premiums for their employees more affordable.”

Other Vermont commission findings were that:

• 47,000 uninsured residents and 14,000 residents with non-group insurance “could get affordable coverage through the health insurance exchange.”

• 52,800 residents could qualify for “Federal premium tax credits” to help them buy health insurance.

• 92,000 Medicare recipients would for the first time receive free preventative services.

• 18,600 seniors would immediately see brand-name drug costs drop by 50 percent in the “doughnut hole” in Medicare coverage, while the coverage gap would be cut by $500.

• 10,500 Vermonters 26 or younger could be covered by their parents’ plans.

Reporter Andy Kirkaldy is at andyk@addisonindependent.com.

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