Provisions of House Healthcare Bill

November 9, 2009

Here are the main provisions of the healthcare overhaul passed by the House of Representatives:

INSURANCE MARKET CHANGES

* Creates an insurance market exchange where individuals and small businesses would purchase coverage. Sets minimum benefit packages that may be offered through the exchange.

* Creates a new government health insurance plan that would be sold through the exchange.

* Provides for the creation of nonprofit healthcare cooperatives that would sell coverage through the exchange.

* Bars insurers from excluding people for pre-existing conditions and from charging more based on medical history.

* Creates a temporary national high-risk pool program to provide medical coverage to the uninsured, including those with pre-existing conditions who have been denied coverage. The program would operate until the exchange becomes available.

* Permits young people to remain on their parents' health insurance policy up to the age of 27.

* Provides for consumer rebates if premiums far exceed the cost of covering their medical expenses.

* Sets up a state/federal process under which insurers would have to justify premium increases.

* Eliminates lifetime limits on coverage.

* Provides for states to enter compacts to allow for the sale of insurance across state lines.

COVERAGE MANDATES AND PENALTIES

* Individuals are required to obtain healthcare coverage. Those who do not would face a 2.5 percent tax penalty.

* Most employers are required to provide coverage to their workers and pay for at least 72.5 percent of the premium for individual full-time workers, 65 percent for family coverage.

* Small firms with up to $500,000 in annual payroll are exempt.

* Firms with annual payrolls between $500,000 and $750,000 that do not provide coverage would pay fees on a sliding scale of 2 percent, 4 percent and 6 percent of wages; firms with payrolls of $750,000 and above would pay 8 percent in fees.

* Tax credits available to help small firms afford coverage.

FINANCING

* Imposes a surtax of 5.4 percent on individuals earning more than $500,000 a year and couples making more than $1 million.

* Imposes a 2.5 percent excise tax on medical devices.

* Raises $6.1 billion over 10 years by repealing rules liberalizing the way multinational companies allocate interest expenses.

* Limits tax breaks for foreign multinational companies incorporated in tax havens that may be using offshore structures to evade U.S. taxes.

* Closes a loophole that lets paper companies claim a valuable tax credit for making biofuel that is already a byproduct of paper production. This provision raises $24 billion over 10 years.

* Would write into law Internal Revenue Service rules denying tax breaks on business transactions that lack an economic purpose and are undertaken only to create a tax write-off. Fines of 20 percent to 40 percent would be imposed for violating the rules.

MEDICARE AND MEDICAID

* Expands Medicaid eligibility so that anyone with an income up to 150 percent of the poverty level would qualify for the government healthcare program for the poor.

* Seeks to reduce hospital readmissions and to base payments on quality of care rather than on the number of services and treatments.

* Reduces payments to insurers providing Medicare services through the Medicare Advantage program to bring them more in line with the costs of the traditional Medicare program for the elderly.

* Gradually reduces the gap in Medicare prescription drug coverage. The so-called "doughnut hole'' begins to close starting in 2010, with the coverage gap eliminated by 2019.

* Would allow Medicare to negotiate drug prices under its prescription drug program.

(Reporting by Donna Smith; editing by Mohammad Zargham)