Senate legislation would create a new insurance exchange

The Senate legislation would create a new insurance exchange, or marketplace, where consumers could shop for affordable coverage that complies with new federal guidelines. Insurance companies would be barred immediately from denying coverage to children because of a preexisting health condition. The prohibition on denial of coverage for adults would not take effect until 2014. And most Americans would be required to purchase insurance, with federal subsidies available to help defray the cost for lower- and middle-income individuals and families. Here's a closer look:

The Congressional Budget Office finally weighed in Saturday with its scorecard. It said the Senate bill would:

• Cost $871 billion over 10 years.

• Be paid for by $483 billion in cuts to Medicare and other federal health programs, as well as tax increases.

• Cover 94 percent of Americans younger than 65, including 31 million currently uninsured.

• Cut the deficit over 10 years by $132 billion.

• Leave 23 million people still uninsured in 2019.

Sen. Ben Nelson of Nebraska, the last Democratic holdout, was won over Friday night by proposed further restrictions on abortion coverage in policies sold inside the exchanges.

States would be permitted to ban insurance coverage of abortions in policies sold in the exchange, except in cases of rape, incest or when the life of the mother is in jeopardy.

In states where such coverage is permitted, consumers must notify their insurance company they want it, and pay for it separately.

Nelson also won increased federal funds to cover his state's cost of covering an expanded Medicaid population at a cost that one Democratic official put at $45 million over a decade.

"You've got to compliment Ben Nelson for playing 'The Price Is Right,'" Sen. Richard Burr, R-N.C., said.

• No so-called public option, which would have competed with private insurance companies.

• No expansion of Medicare to include some people ages 55 to 64, a change that hospitals and doctors fought because it would have meant taking care of more patients at lower Medicare rates.

• The "Louisiana Purchase," as it is being called, a provision for Sen. Mary Landrieu, Democrat of Louisiana, who obtained an extra $300 million in Medicaid funds for her state.

• The Hawaii exemption, a measure that allows the state to keep its own health care system.

• A break on the excise tax on so-called Cadillac health insurance plans for people in the 17 states where premiums are the highest.

• An exemption for small makers of medical devices from a new tax -- relief that was sought by Democratic senators from states including Minnesota, Indiana and Massachusetts, where such device makers are based.

• $10 billion increase in funding for community health centers nationwide. Sen. Bernie Sanders, I-Vt., made an impassioned speech last week on behalf of a doomed proposal for government-run health care. He said he only agreed to vote for the legislation on Friday, when Senate Majority Leader Harry Reid told him additional billions for the health centers would be included.

• Additional federal funding for hospitals in Montana, Wyoming and the Dakotas, although no cost estimate was available.

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Instead of offering government-run insurance to compete with private insurers, the Senate bill would allow private insurers for the first time to offer national insurance policies to all Americans across state lines. Those plans would be negotiated through the Office of Personnel Management, the same agency that handles health coverage for federal workers and members of Congress.

The bill would set up new insurance marketplaces -- called exchanges -- where people without access to affordable coverage through an employer could purchase comprehensive plans. Tax credits would be available on a sliding scale for individuals and families who earn as much as 400 percent of the federal poverty level ($88,200 for a family of four).

Individuals must purchase insurance or pay a penalty that would be the greater of $750 or 2 percent of income by 2016.

Employers will not be required to offer health insurance. However, if even one employee receives a subsidy through the new exchanges, firms with more than 50 employees would have to pay a fine equal to $750 for every person on their payroll.

The latest amendment would increase certain levies in the original bill. For example, couples making more than $250,000 a year would pay an additional 0.9 percent in Medicare payroll taxes, instead of the 0.5 percent increase originally proposed. The new version also eliminates a 5 percent levy on elective cosmetic surgery and instead adds a 10 percent tax on indoor-tanning services.

The bill includes bans on lifetime limits, premium disparity based on health and gender, and coverage denials based on preexisting conditions.

Medicaid would be expanded to cover everyone earning less than 133 percent of the federal poverty level ($29,327 for a family of four).

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