What Health Care Overhaul Means For You

How exactly would new health care overhaul legislation affect you? Click on the category below that best fits your situation and see what the major proposals currently before Congress would mean for you.

Which Category Are You?

President Obama has challenged Congress to come up with a bill that provides quality, affordable health insurance to all Americans — without adding to the deficit. See how key proposals would affect you.

Uninsured 46 million
Under-insured 25 million
Employer Insured 164 million
Self-Insured 17 million
Uninsured By Choice? 9 to 18 million
 

NOTE

* Numbers listed above refer to the non-elderly U.S. population.

Can't Afford Insurance?

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If you're among the 46 million Americans without health insurance, chances are you worry about your health — with good reason. Studies show uninsured people are more likely to die after a heart attack or stroke, more likely to get diagnosed with cancer at a later stage, and less likely to have their diabetes or high blood pressure under control. You are also part of the reason for spiraling costs. With no affordable alternative, the uninsured often seek treatment at a late stage in an illness — and in emergency rooms, where costs are highest.

How Overhaul Could Affect You

Subsidizing Coverage

Under the leading proposals, the government would come to the rescue if you can't afford insurance that meets your needs. Many experts say subsidies will be necessary if the new law mandates all Americans to have coverage. Details vary, but in general, subsidies would be available if your income is up to five times the poverty level ($54,150 for an individual and $110,250 for a family of four). Small employers would also get a subsidy to encourage them to cover workers.

Drawbacks: It's expensive, at $723 billion over 10 years by one estimate. Government subsidies might prompt employers of lower-income workers to drop coverage — or not to start offering it.

Mandating Insurance

Requiring everyone to purchase insurance — or otherwise pay a tax penalty — is a cornerstone to making a universal system work in the U.S. Here's why: When the uninsured fall sick and can't pay their bills, it costs everyone money. Hospitals and doctors recoup their losses by charging insurance companies more. Insurers, in turn, pass that cost on to their clients, through higher premiums. In essence, people with health insurance are helping to cover the costs of the 46 million people who are uninsured. The idea behind a mandate, however, is that requiring millions more people to pay into the insurance pool cuts down on catastrophic, uninsured costs while pumping more money into the system. The result? Lower premiums for everyone.

Drawbacks: Does the government have any right to tell individuals or companies how to spend their money? A mandate on employers could discourage hiring and wage increases. Some minimum-wage workers could lose their jobs if employers have to cut costs to satisfy the mandate.

Public Plan

Senate Democrats back a government-sponsored health plan similar to Medicare but without age restrictions. The government would administer the plan. Care would be provided by nongovernment hospitals, doctors and others. Public plans would broaden choices; people could choose a public plan or conventional private insurance. The price should be reasonable because public plans would have low overhead — no big marketing budgets, no profit margins. Proponents say a public plan would set the pace for private insurers, forcing them to lower premiums.

Drawbacks: Opponents fear that a public plan would have an unfair advantage. Lower premiums and good benefits might draw people out of private health plans, making them financially unviable and paving the way for totally government-run financing. Critics also say Medicare, the model for public insurance, does not have a good record on controlling health costs.

Expanding Medicaid

Most uninsured Americans are in working families, and most have low incomes — less than twice the poverty level. Many stand to benefit from proposals to expand Medicaid, the federal-state program for the poor. The idea is to allow people with higher incomes into Medicaid — possibly those with up to 150 percent of the federal poverty level ($16,245 for an individual; $33,075 for a family of four). One proposal would let people get Medicaid for five years, then require them to sign up for coverage through one of the new private insurance exchanges. Expanding Medicaid could allow up to 20 million people access to coverage — that's more than 40 percent of the uninsured.

Drawbacks: State Medicaid programs are all over the map in the benefits they provide. States are in no position to pay their share of expanded eligibility or of nationally standardized benefits.

Expanding Medicare

This would allow people ages 55 to 64 to buy into Medicare, the federal program for those older than 65. It would give a new alternative to 24 million "pre-Medicare" people, 5 million of whom are uninsured. People in this age group are finding that job-based health insurance is eroding. If they have it, it comes with more exclusions. And what's covered requires more and more out-of-pocket payments. Within a few years, 20 percent of all Americans will be in this age group. Medicare, which was established 44 years ago, is familiar and popular. It would be relatively easy to open it to somewhat younger beneficiaries.

Drawbacks: Many people couldn't afford to buy Medicare at its full cost. Health care providers complain that Medicare payment rates are too low, and that expanding the program would jeopardize their bottom line.

Want Better Coverage?

Is your health insurance OK ... unless you get sick? Worry about going bankrupt if you get really sick? You're among the 25 million to 37 million American adults younger than 65 who are under-insured. You're at risk of spending more than 10 percent of your income on medical care. Because costs are going up and coverage is eroding, your numbers are growing. "If you are sick and earn a modest income, then you are probably under-insured, even if you have employer-sponsored coverage," says Jon Gabel of the National Opinion Research Center.

How Overhaul Could Affect You

New Coverage Standards

The proposed requirements for the new system go to the heart of your problem. Many of the insurance horror stories in recent years stem from insurers' attempts to avoid covering people at high risk of getting sick. Most in Congress would agree that it's imperative to make the system equitable. Insurers would no longer be able to refuse coverage to people with pre-existing conditions. Also, there would be strict limits on how much premiums could vary based on age, place of residence and other individual characteristics.

Drawbacks: These new requirements may appear simple, but they won't work without some others — such as a mandate that virtually everyone buy coverage. Otherwise, they would drive up premiums for people who buy insurance on their own to pay the costs of the newly enrolled older and sicker people.

Public Plan

You might see the most relief through a government-sponsored health plan similar to Medicare but without age restrictions. The government would administer the plan, but the care would be provided by nongovernment hospitals, doctors and others. Coverage would be comprehensive, and subscribers generally would have low deductibles and copays. The price should be reasonable because of low administrative costs — no big marketing budgets, no profit margins.

Drawbacks: Opponents fear that a public plan would have an unfair advantage. Lower premiums and good benefits might lure people out of private health insurance plans, making them financially unviable. Others say Medicare, the model for public insurance, does not have a good record on controlling health care costs.

Insurance Exchanges

If you have Swiss-cheese insurance that doesn't cover your needs, an exchange could help you shop for a better deal. It is a way of bringing buyers and sellers together, providing one-stop shopping among an array of competing health plans. To be listed, all would have to meet minimum coverage standards and explain themselves in clear language. Exchanges would also allow employers to offer a wider range of choices, instead of negotiating with insurers one at a time. That would increase competition and lower prices.

Drawbacks: Exchanges only work in areas that have enough insurance plans to choose from. Some critics say exchanges work only if people are required to buy insurance and are provided subsidies to make insurance affordable — two proposals under active consideration. Unless access to exchanges is restricted, some critics say they'll drain younger, healthier workers from job-based plans, making the plans more expensive for those who remain. Some say exchanges have no record of reducing premiums.

Expanding Medicaid

All the major congressional proposals include expansion of Medicaid, the federal-state program for the poor. The idea is to allow people with higher incomes to qualify — some propose up to 150 percent of the federal poverty level ($16,245 for an individual; $33,075 for a family of four). One proposal is to use Medicaid expansion to get more people adequate coverage, then, after five years, require them to sign up for coverage through one of the new private insurance exchanges.

Drawbacks: State Medicaid programs are all over the map in the benefits they provide. States are in no position to pay their share of expanded eligibility or nationally standardized benefits. As the program for the poor, Medicaid carries a stigma, and programs have not always done a good job of enrolling those who are already eligible.

Expanding Medicare

By lowering the eligibility age from 65 to 55, Medicare buy-in would give a new alternative to 24 million "pre-Medicare" people, 5 million of whom are uninsured. Many are finding that job-based health insurance is eroding. If they have it, it comes with increasingly more exclusions. And what's covered requires more and more out-of-pocket payments. Within a few years, 20 percent of all Americans will be in this age group.

Drawbacks: Many people couldn't afford to buy Medicare at full cost. Health care providers complain that Medicare payment rates are too low, so expanding the program jeopardizes their bottom line.

Subsidizing Coverage

Under the leading proposals, the government would come to the rescue if you can't afford insurance that meets your needs. Details vary, but in general you'd get varying degrees of subsidy if your income is up to five times the poverty level ($54,150 for an individual; $110,250 for a family of four). Small employers would also get subsidy to encourage them to cover workers.

Drawbacks: It's expensive, at $723 billion over 10 years by one estimate. Government subsidies might prompt employers of lower-income workers to drop coverage — or not to start offering it.

Happy With Your Coverage?

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If you're in this category, chances are you're one of about 164 million people in America who get coverage through their employers. But trouble could be closing in. Your premiums, and the contribution by your employer, have more than doubled since 1999. And chances are good that your company is planning to reduce its premium contribution and increase the amount you have to pay out of pocket when you see a doctor or fill a prescription. If you lose your job (more than 15 million people are currently unemployed), you lose your health coverage — something that happens nowhere else in the industrialized world.

How Overhaul Could Affect You

Public Plan

Under Senate proposals, a government-sponsored health plan would be offered to workers in small companies, which are much less likely to offer health benefits. A House of Representatives plan would phase in eligibility for larger companies. For those eligible, public plans would broaden choices; people could choose a public plan or conventional private insurance. The price should be reasonable because public plans would have low overhead — no big marketing budgets, no profit margins. Also, a public plan may set the pace for private insurers, forcing them to be more efficient and less costly.

Drawbacks: A public plan could have an unfair advantage because of government subsidies and lower overhead costs. They might lure people out of private health plans, making them financially unviable and paving the way for totally government-run financing. According to one estimate, public plans would draw 15 million people out of employer-based plans. Critics also say Medicare, the model for public insurance, does not have a good record on controlling health costs.

Insurance Exchanges

Exchanges answer one of the biggest problems in the current health insurance marketplace: It's hard to comparison-shop. Employees at small companies — which currently tend to have fewer options — would be able to choose among an array of health plans that would be obligated to offer coverage that meets minimum benefit standards. Premiums could not be based, as they are now, on health status or health risk. The President's Council on Economic Advisers says widespread participation in exchanges could bring down the price of a health plan by 20 percent, roughly $1,000 a year.

Drawbacks: Exchanges only work in areas that have enough plans to choose from. Some critics say exchanges work only if everyone is required to buy insurance and it is subsidized to make it affordable for low-income Americans — two proposals under active consideration. If exchanges are open to everyone, including those who currently have insurance, it could drain younger, healthier workers from job-based plans. That could make existing job-based plans more expensive for those who remain. Some say exchanges have no track record of reducing premiums.

Expanding Medicare

This would allow people between the ages of 55 and 64 to buy into Medicare, the federal program for those 65 and older. It would give a new alternative to 24 million "pre-Medicare" people, 5 million of whom are uninsured. Many in this age group are finding that job-based health insurance is eroding. If they have it, it comes with more exclusions. And what's covered requires more and more out-of-pocket payments. Within a few years, 20 percent of all Americans will be in this group.

Drawbacks: Many people couldn't afford to buy Medicare at full cost. Depending on the cost and eligibility rules, opening Medicare to people between the ages of 55 and 64 could lure many out of workplace plans, destabilizing them. Health care providers complain that Medicare payment rates are too low, so expanding the program jeopardizes their bottom line.

Self-Insured And Worried?

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If you buy health insurance on your own — because you're self-employed or your employer doesn't offer it — you know how expensive and iffy coverage can be. You're among as many as 17 million Americans who buy nongroup health insurance. You're likely to face high premiums, large deductibles and copayments, and the risk that your insurance won't be renewed if you get sick.

How Overhaul Could Affect You

New Coverage Standards

Right now, many of you have trouble buying and keeping coverage. Many of the insurance horror stories in recent years stem from insurers' attempts to avoid coverage for people at high risk of getting sick. So at a minimum, many say a new health care law should reduce the most glaring inequities and stabilize coverage for people who don't have access to workplace-based insurance. Requirements would include banning insurers from refusing coverage based on pre-existing conditions. Also there would be strict limits on how much premiums could vary based on age, place of residence and other individual characteristics.

Drawbacks: These new requirements may appear simple, but they won't work without some others — such as a mandate that virtually everyone buy coverage. Otherwise, they could drive up premiums as older or sicker individuals buy coverage while younger, healthier people don't.

Public Plan

A government-run public plan would give another option to people who are self-employed or can't get insurance through the workplace. Benefits would be as good as employer-sponsored insurance, and subscribers couldn't be turned away or have their coverage canceled for health reasons. Premiums should be lower because the public plan wouldn't have the marketing, sales, underwriting and administrative costs of private nongroup coverage. Premiums would be scaled to subscribers' incomes.

Drawbacks: Opponents fear a public plan would have an unfair advantage because of government subsidies and lower overhead costs. It might lure people away from private health plans, making them financially unviable. Eventually, a public plan might destroy the private nongroup market and become the only option for people who don't get workplace-based insurance or qualify for Medicaid. Critics also say Medicare, the model for a public plan, does not have a good record on controlling health costs.

Insurance Exchanges

Exchanges could solve one of the biggest problems in the current health insurance marketplace: It's hard to comparison-shop. They are ways of bringing buyers and sellers of health insurance together, providing one-stop shopping among an array of competing health plans. To be listed on the exchange, all plans would have to meet minimum coverage standards and explain themselves in clear language.

Drawbacks: Exchanges only work in areas that have enough plans to choose from. Some critics say exchanges work only if people are required to buy insurance and there are subsidies to make them affordable — two proposals under active consideration. Some say exchanges have no record of reducing premiums, or that exchanges might unfairly favor public insurance plans.

Expanding Medicare

Government-run Medicare is established, familiar and popular. It would be relatively easy to lower the eligibility age from 65 to 55. And that would be an important new alternative, since buying an individual insurance policy is especially expensive for older workers — if they are eligible for coverage at all.

Drawbacks: Many people couldn't afford to buy Medicare at full cost. Health care providers complain that Medicare payment rates are too low, so expanding the program jeopardizes their bottom line.

Subsidizing Coverage

New subsidies from the government could be a boon for those now struggling to pay for individual insurance policies. Details vary, but in general you'd get varying degrees of subsidy if your income is up to five times the poverty level ($54,150 for an individual; $110,250 for a family of four).

Drawbacks: It's expensive, at more than $720 billion over 10 years, by one estimate. Even so, some who favor subsidies point out that proposed subsidies are too low; the premium for a standard health plan currently offered to federal workers would amount to 18 percent of the income for a family of three making 400 percent of the poverty level ($73,240).

Don't Want Insurance?

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If you're uninsured but your income is more than 2.5 times the federal poverty level ($27,075 for an individual), you might be uninsured by choice. At least 40 percent of the 46 million people without coverage may fall in this category. Experts say you should be able to afford some kind of coverage. Signing you up is essential to making the U.S. insurance system cost-effective. Those who can afford insurance yet opt out tend to be young, healthy and single. But an insurance system works best when there is a mix of people; the low-cost healthy subsidize the high-cost sick.

How Overhaul May Affect You

Mandating Insurance

If a bill is passed, it will most likely require all who can afford insurance to buy it — or pay a tax penalty. Many people — especially younger, healthier adults — won't buy insurance unless they're required to; they think they don't need it. But sometimes they suffer serious illness or trauma and end up not being able to pay their bills, which costs everyone else money. If they paid monthly premiums, these lower-cost subscribers would also help lower the premiums for everyone else.

Drawbacks: Many say the government has no business telling individuals or companies how they must spend their money. A mandate on employers discourages hiring and wage increases. Minimum-wage workers are most likely to lose their jobs if employers have to cut costs to satisfy the mandate.

Public Plan

If a public plan — similar to Medicare but without age restrictions — could offer good coverage at a lower premium, some of the 20 million people who choose not to spend their money on health insurance might be persuaded to buy in. Since public plans would have low overhead — no big marketing budgets, no profit margins — proponents say they should have lower premiums. That might also prompt private plans to lower their prices.

Drawbacks: Opponents say public plans might undermine private health plans, making them financially unviable and paving the way for totally government-run financing. Critics also say Medicare, the model for public insurance, does not have a good record on controlling health costs.

Insurance Exchanges

If you're forced to buy insurance under a new law, exchanges would make it easier to choose a plan that meets your needs and budget. They are ways of bringing buyers and sellers of health insurance together, providing one-stop shopping among an array of competing health plans. To be listed on the exchange, all plans would have to meet minimum coverage standards, offer a standard package of benefits and explain themselves in clear language.

Drawbacks: Exchanges only work in areas that have enough plans to choose from. Some critics say exchanges work only if people are required to buy insurance and subsidies are provided to make it affordable — two proposals under active consideration. Unless access to exchanges is restricted, some say they'll drain younger, healthier workers from job-based plans, making them more expensive for those who remain. Some say exchanges have no record of reducing premiums.

Expanding Medicare

About a third of the voluntarily uninsured are between the ages of 45 and 64. It's possible some of these people would take advantage of a proposal to expand the government's Medicare program. It would lower the eligibility age from 65 to 55.

Drawbacks: Many people couldn't afford to buy Medicare at full cost. Health care providers complain that Medicare payment rates are too low, so expanding the program jeopardizes their bottom line.

Subsidizing Coverage

If you've hung back from buying coverage because of the cost, this feature might change your mind. Details vary, but in general you'd get varying degrees of government subsidy if your income is up to five times the poverty level ($54,150 for an individual, $110,250 for a family of four). Small employers would also get a subsidy to encourage them to cover workers.

Drawbacks: It's expensive, at $723 billion over 10 years by one estimate. Government subsidies might prompt employers of lower-income workers to drop coverage — or not to offer it.

Key Proposals

A refresher on the main proposals before Congress:

Expanding Medicaid

Most uninsured Americans are in working families, and most have low incomes, so many of the uninsured stand to benefit from proposals to expand Medicaid, the federal-state program for the poor. The idea is to allow people with incomes above the poverty level into Medicaid. In some proposals, this would include people who make up to 150 percent of the federal poverty level ($16,245 for an individual; $33,075 for a family of four). One proposal is to allow these people to keep Medicaid for five years, then require them to sign up for coverage through one of the new private insurance exchanges. Expanding Medicaid could reach 20 million more people in a program that already exists throughout the nation. That's more than 40 percent of the uninsured.

One problem: State Medicaid programs are all over the map when it comes to the benefits they provide. And in a bad economy, states are in no position to pay their share of a larger program.

Expanding Medicare

Allowing people ages 55 to 64 to buy into Medicare would give a new alternative to these 24 million "pre-Medicare" people, 5 million of whom are uninsured. Medicare, established in 1965, is familiar to many people, and popular. It would be relatively easy to open it to younger beneficiaries. The cost, however, may keep people at bay. Many couldn't afford to buy Medicare at full cost — that is, without the subsidy currently provided to those older than 65. Health care providers complain that Medicare payment rates are too low, so expanding the program jeopardizes their bottom line.

Insurance Exchanges

A way of bringing buyers and sellers together, providing one-stop shopping among an array of competing health plans. To be listed on the exchange, all plans would have to meet minimum coverage standards, provide a minimum package of benefits and explain themselves in clear language. Exchanges could solve one of the biggest problems in the current health insurance marketplace: It's hard to comparison-shop. They also might allow employers to offer a wider range of choices, instead of negotiating with insurers one at a time as they do now.

But exchanges only work in areas that have enough plans to choose from, and many areas have only two health plans available. Some say exchanges have no record of reducing premiums.

Mandating Insurance

The government would require you to purchase insurance — with subsidies for those who can't afford it — or pay a tax penalty. Some propose a mandate on most employers to offer coverage, too. Requiring everyone to purchase insurance is key to making a universal system work in the U.S. Here's why: When the uninsured fall sick and can't pay their bills, it costs everyone money. Hospitals and doctors recoup their losses by charging insurance companies more. Insurers, in turn, pass that cost on to their clients, through higher premiums. In essence, people with health insurance are helping to cover the costs of the 46 million people who are uninsured.

A fundamental question: Should the government tell individuals or companies how to spend their money? A mandate on employers also could limit wage increases and discourage hiring. Minimum-wage workers could lose their jobs if employers have to cut costs to satisfy the mandate.

New Coverage Standards

At a minimum, many say a new health care law should reduce the most glaring inequities and stabilize coverage for people who don't have access to workplace-based insurance. Requirements would include banning insurers from refusing coverage based on pre-existing conditions. Also there would be strict limits on how much premiums could vary based on age, place of residence and other individual characteristics. These new requirements may appear simple, but they won't work without some others — such as a mandate that virtually everyone buy coverage. Otherwise, they could drive up premiums as older or sicker individuals buy coverage while younger, healthier people don't.

Public Plan

A government-run health plan similar to Medicare but without age restrictions. Care would be provided by existing hospitals, doctors and others. Another model is the plans that public employees have in many states.

Proponents say a public plan would set the pace for private insurers, forcing them to be more efficient. Opponents fear that a public plan would have an unfair advantage and draw people out of private health plans, making them financially unviable. That would pave the way for a government takeover of all health insurance. Possible compromise: Nonprofit health "cooperatives" owned by members, launched with federal startup funds.

Subsidizing Coverage

Under the leading proposals, the government would come to the rescue if you can't afford insurance that meets your needs. Details vary, but in general you'd get varying degrees of subsidy if your income is up to five times the poverty level ($54,150 for an individual; $110,250 for a family of four). Small employers would also get a subsidy to encourage them to cover workers. Again, cost is a factor. Critics balk at the $723 billion to $1 trillion price tag for subsidies over 10 years. Government subsidies might also prompt employers of lower-income workers to drop coverage — or not to start offering it.

 

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