Understanding the President's Health Reform Proposal

Yesterday, the White House released its version of a health care reform bill to restart the debate on how to reform the country's health care system. The CBO has announced that it will not be able to provide a detailed cost estimate of the proposal this week, citing additional needed information and the complexity of the issues involved.

In the table below, CRFB has expanded on a table put together by Think Progress' Wonk Room, comparing select components of the President's proposal to the House and Senate bills.

 Provision House Senate Obama
Premium Subsidies Limits premiums to between 1.5% and 12% of income, for families making up to 400% of poverty line Limits premiums to between 2% and 9.8% of income, for families making up to 400% of poverty line. Overall premiums are less generous than the House.

Limits premiums to between 2% and 9.5% of income, for families making up to 400% of poverty line. Subsidies between House and Senate levels for very low income families, and more generous than either for families of moderate income.
Cost Sharing Subsidies
 Limits cost sharing to between 3% and 30% Limits cost sharing to between 10% and 30% Limits cost sharing to between 6% and 30%
Spending on Community Health Center (five yrs) $12 billion $8.5 billion $11 billion
Oversight of Premiums Rate review of proposed premium increases Rate review of proposed premium increases Creates Health Insurance Rate Authority to oversee premiums
Consumer Protections Grandfather policy, but must complywith certain rules within five years Grandfather policy Grandfather policy, but plans must comply with certain protections
Individual Mandate 2.5% of income penalty for lack of compliance Flat fee of $750 (by 2016) or 2% of income for non-compliance (whichever is higher), but hardship waiver Same as Senate but lower flat fee of $695 and high percent of income (2.5%)
Employer Mandate and Small Business Support 8% payroll tax for employers who do not offer acceptable health insurance No requirement but large employers must pay amount for workers getting tax credits

Small businesses: tax credits; Large employers: same requirement as Senate Bill
Medicare Advantage Phases down payments based on local costs Creates a "bidding model" for payment rates Phases down payments based on local cost, incentivizes quality and enrollee satisfaction
High-Cost Excise Tax None 40% tax on plans above $8,500 for singles, $23,000 for families starting in 2013 40% tax on plans above $10,200/$27,000 starting in 2018
High-Income Taxes 5.4% surcharge on high-income earners 0.9% HI tax increase on earning above a certain amount Same as Senate, in addition to 2.9% tax on unearned income for those making over $200,000/$250,000
Fee on Brand Name Pharmaceuticals None Raises $13 billion over 10 years Raises $23 billion over 10 years
Closing Tax Loopholes Tightens bio-fuels tax credit, penalizes "unjustified" tax sheltered transactions None Adopts House bill policies
Federal Matching for Medicaid 100% federal matching, then 91% after first two years 100% federal matching first two years, then 32.3% increase in state's regular federal match 100% federal matching initially, phasing down to 90% by 2020 
Health Insurance Providers Fee None Raises $67 billion over 10 years Delay fee until 2014 and exempt certain providers
Medical Device Fee Raises $20 billion over 10 years Raises $20 billion over 10 years makes fee an excise tax, delayed until 2013, raises same revenue
CLASS Act Provides Payroll deduction for a program that provides cash disability benefits Same as House bill Strengthens long-run solvency of program (unspecified)
Other New Provisions N/A N/A Protects Social Security Trust Fund, spends $1 billion to effectively implement reform policies
New "Waste, Fraud, and Abuse" Provisions from Kirk Bill (H.R. 3970) N/A N/A Background checks of Medicare billing agencies, exclusing individuals making fraudulent Medicare claims, better fraud informations sharing, hold Medicare contractors liable for payments made to excluded providers, strengthens standards for community mental health centers, recovers Medicare payments to fraudulent health care providers

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