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Health Care Reform:

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What's Next for Health Insurance Reform?

Senate and House Negotiators Must Work Out Differences in Health Care Bills

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Reviewed by Louise Chang, MD

WebMD Health News

Dec. 28, 2009 -- The Senate and the House will try to reconcile their differing versions of health care reform when members of Congress return from their holiday break.

The Senate passed its health care bill on Christmas Eve by a vote of 60-39. Lawmakers must now work out differences in the House and Senate bills in a conference committee.

Here are the major elements of the Senate's health care bill, followed by a look at how that differs from the House bill.

Financing of Senate Bill

The legislation passed by the Senate, at a cost of $871 billion over 10 years, will be financed by taxes and fees, Medicare reductions, and at least one quirk.

To pay for coverage expansions, more than $400 billion will be cut from the Medicare program. The Senate bill also raises the Medicare payroll tax for individuals making at least $200,000 a year and couples earning at least $250,000, from 1.45% to 2.35%.

One key provision creates a new excise tax on high-cost "Cadillac'' benefits. Health plans valued at more than $8,500 for individuals and $23,000 for families would trigger the tax, though some occupations would be exempted.

Along with these new levies, medical industries -- from drug manufacturers to medical device makers -- would pay annual fees. Also, as a last-minute addition, tanning-salon treatments would draw a 10% tax, replacing a proposed levy on elective cosmetic medical procedures.

Main Provisions of Senate Bill

Insurer prohibitions: The Senate bill would bar health insurance companies from discriminating against people with pre-existing conditions. No longer could an insurer deny coverage to them.

It also would end premium differentials based on gender. Insurers could no longer set lifetime limits on coverage, and would be restricted on how much they charged older people. And the bill would also require insurers to spend at least 80% of their premium revenues on medical care.

Exchanges: States would establish new health insurance marketplaces where the uninsured, individuals, and small businesses could shop for health plans.

Subsidies: Lower- and middle-income individuals would receive government subsidies to afford health insurance. They would be available to people with incomes up to 400% of the federal poverty level ($88,200 for a family of four).

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