The Remington Report

In a rare Saturday evening session, the Senate voted 60-39 to bring a healthcare reform bill to the Senate floor for debate.

The bill would cost $849 billion over 10 years and provide health insurance to 31 million more people by 2019, according to a preliminary estimate by the nonpartisan Congressional Budget Office (CBO), and would reduce the federal deficit by $130 billion over the first 10 years, with substantial additional savings projected for the second decade. The bill would include a government-run public health insurance plan with an "opt-out" clause allowing states to choose whether to participate. The public plan would negotiate payment rates directly with healthcare providers instead of tying them to Medicare rates.

CBO projects that the bill would reduce the federal deficit by $130 billion over the first 10 years, with substantial additional savings projected for the second decade. CBO's preliminary report on the Senate bill included the following analysis:

• Coverage: The bill would ensure coverage for 94 percent of U.S. residents. However, 24 million people still would be uninsured in 2019. About one-third of these would be “unauthorized immigrants.”

• Health insurance exchanges: Health insurance exchanges to facilitate purchase of insurance by individuals and small businesses would take effect in 2014.

• High-cost insurance plans: The bill would impose a 40 percent excise tax on high-cost employer-sponsored health plans.

• Individual mandate: Most U.S. residents would be required to have health insurance by 2014. Penalties starting at $95 would apply after that time. The penalty would rise to $750 per person in 2016, with a maximum penalty of $2,250 for a family.

• Industry fees: The bill would impose annual fees amounting to $6 billion on health insurers, $2 billion on pharmaceutical companies, and $2 billion on medical device manufacturers.

• Long-term care: A voluntary government-administered insurance plan for long-term care is included in the bill.

• Medicare cuts: The CBO analysis did not offer an estimate for savings associated with Medicare payment reductions to providers. A scheduled 21 percent physician payment cut in 2010 would be replaced with the latest in a series of one-year fixes that would raise the payment rates by 0.5 percent.

• Medicare payroll tax: A payroll tax would be assessed on individuals whose annual incomes are greater than $200,000 and families whose incomes are greater than $250,000 annually. The current payroll tax, which is equal to 1.45 percent of wages, would be raised to 1.95 percent.

• Penalties: Companies with more than 50 employees that fail to provide adequate coverage options would be subject to penalties of up to $750 in fines per employee.

• Public plan: The bill would include a government-run public health insurance plan with an "opt-out" clause allowing states to choose whether to participate. The public plan would negotiate payment rates directly with healthcare providers instead of tying them to Medicare rates.

• Subsidies: U.S. residents whose incomes are below 133 percent of the federal poverty level (FPL) would qualify for Medicaid coverage, while those whose incomes are between 133 percent and 300 percent of FPL would qualify for federal subsidies and annual caps on their premiums and out-of-pocket expenses.