A plain language summary of the reconciliation "fix" to the health care reform bill

The health care reform bill in markup.  AP Photo

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By now most people know about the House of Representative vote on health care reform this upcoming Sunday.  However what few know the complicated details of what will actually be voted on at that time.

Through a procedure called a "self-executing rule" the House will vote on both the Senate health care bill (which has already passed with 60 votes in the Senate) and the reconciliation "fix" to that bill.  If the House finds 216 votes for the rule the Senate health care bill will only lack the President's signature before it becomes law.  The reconciliation fix will not become law until it goes back to the Senate where it needs to get at least 50 votes (Vice President Joe Biden could cast the tie-breaking vote).  After it passed through the Senate it would then go to the President for his signature.

So to be clear if the Democrats get 216 votes on Sunday the Senate bill will essentially be law.  The reconciliation fix on the other hand has two more steps to go.  A full summary of the Senate health care bill can be read here.  Below is a summary of the changes to that bill in the reconciliation fix.

More Tax Credits:

If the reconciliation fix passes it will provide more tax credits to those between 250%-400% of the federal poverty line to help them purchase health care insurance.  Right now the federal poverty line for a family of three is about $18,000.  Therefore a family making four times that amount would receive more tax credits than are already in the Senate bill.

Penalties for the Individual Mandate:

Under the Senate bill if someone does not purchase insurance in 2014 then they must pay a $750 fine or 2.0% of their income whichever is greater.  Under the reconciliation fix the flat fee amount would be reduced slightly and phased in over 3 years.  However the bill would also increase the "alternative tax" percentage from 2.0% to 2.5%.  The alternative tax would also be phased in over three years.  Finally the fix also exempts more poor individuals from the penalty.

Increased Penalties for Employers Not Providing Insurance:

Under the original Senate bill someone large employers (over 50 employees) would have to pay $750 for each employee if they did not provide insurance.  Under the fix that penalty is increased to $2,000

Closing the Medicare Part D Donut Hole:

The Donut Hole is actually too complicated to be fully explained here.  To sum it up a number of seniors are not benefiting from the Medicare Part D program because of how it was setup.  The reconciliation fix closes the hole by providing a one time rebate of $250 to people who are in the "donut hole" and late providing discounts of up to 75% on drugs by 2020.

Taxes:

The fix generally delays the taxes that medical supply companies, pharmaceuticals, and health insurance companies would have to pay but also increases the amount they would have to pay.  The fix would exempt more "cadillac plans" from being taxed.  Essentially only the very best health insurance plans (premiums well over $8,000 a year) that are provided to the wealthy would be taxed.

Premiums Review:

Possibly the biggest change through the fix is something that is surprisingly not being talked about much.  In 2011 insurance companies would be forced to report what premiums they are charging and also provide accounting as to how that money is being spent.  A review board would then have the power to deny rate or modify rate increases if they are not justified.

Increased Funding For States:

The fix provides more federal matching funds for states to provide expanded Medicaid coverage.  This would help states as they expand Medicaid coverage to the poor.

The Special Deals:

The "Cornhusker Kickback" for Nebraska is taken out in the reconciliation fix.  This was probably the most infamous provision in the Senate bill.  A number of other deals stay.  The so-called "Louisiana Purchase" stays.  Democrats see increased federal funds to Louisiana as justified given the Katrina aftermath and the unique population of Louisiana.  The Louisiana provision is about $300 million which is a lot to any American but a drop in the bucket of the overall size of this bill.  There are other small provisions for individual states that stay.  Each could be argued as justified given the differences between states and the demographics of each state but Republicans will obviously argue the provisions are corrupt deals.