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What You Need To Know About Health Care Reform

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What Obamacare really means for you and your granny

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Fact 4: 'None Of The Above' Is Not An Option

The bill aims for universal health care coverage, but stops short of an outright mandate that you must buy it.

For individuals…

If you already have coverage, you're set.

If you're already covered by the government through Medicare or Medicaid, you're set.

If you're not quite poor enough or old enough for Medicare or Medicaid, you may be eligible soon. The bill expands the guidelines for Medicaid eligibility.

If you're still not quite poor enough or old enough for free coverage, you'll get vouchers to help you pay your premiums. Illegal aliens are specifically excluded.

If you can afford health insurance but don't buy it, you'll be fined 2.5 percent of your adjusted gross income on your tax return. This clause waffles a bit, with the fine kicking in "above a certain level" of income.

Just in case there's anybody who doesn't fall into one of the categories above, there's a hardship exemption.

For employers…

Big employers must provide coverage or pay an 8 percent payroll bonus. It isn't clear in the bill whether that payment goes to the individual or into the exchange.

Small businesses (from $250,000 to $400,000 in payroll) must provide coverage or pay a 2 to 8 percent bonus to employees, but they'll get a tax credit to offset the cost.

The smallest business -- those below $250,000 in payroll -- are not required to provide insurance, but if they do, they'll get the tax credit.

Small businesses may benefit from a clause that bans insurers from charging them more for coverage because their employee pool happens to have a lot of young parents or older workers, or for any other reason.

Fact 5: The 'Reform' Word Applies To Medicare and Medicaid

One concern floating through public forums is that the already high government cost of health care through Medicare and Medicaid will crush our economy to powder if this legislation goes through.

An equally powerful concern comes from seniors who rely on Medicare, and people who expect to get Medicare in the future.

The sheer size and scope of the bill, and its high-sounding but vague bureaucratic language, have raised fears of cuts in care, rationing of care, long lines to see a doctor and long delays for an operation.

In fact, services under both programs would be expanded.

The bill waives deductibles for preventive care under Medicare, and adds mental health services.

It expands Medicaid coverage to include more low-income people, and requires coverage for newborns.

Fact 6: Somebody Has Got To Pay For This

How We'll Pay For The Public Plan:

The public option is intended to pay for itself entirely through premiums.

If that sounds dubious, here's the logic: The public option is intended to cover most of the people who currently have no health insurance -- estimated at 47 million of us, although that figure is disputed. Over time, it may cover many other people who opt to switch from private to public plan.

Most of us are pretty healthy most of the time. So, the people in that vast pool of premiums paid by healthy people will pay premiums that cover care for those who need it right now.

If that sounds like a poor business model, it seems to have worked for the private insurers for some time now.

How We'll Pay For The Rest Of The Bill:

It looks like the richest Americans are going to pay up, one way or another.

Some truly big ideas, with big potential costs, are built into this bill. The Congressional Budget Office estimates the cost at $615 billion over 10 years, and that is probably a wild guess.

One part alone allocates an additional $38 billion over 10 years for community health centers around the U.S., part of a general focus in the bill on routine and preventive care for all.

Other ambitious pieces do not yet have price tags attached, such as training programs for primary care physicians, and for medical staff needed by those new community health centers.

At the same time, the legislation promises to cut billions of dollars of costs through elimination of waste, fraud, inefficiency and overpayments in the public health programs. And the idea underlying the entire bill seems to be an emphasis on primary and preventive care in order to free up over-burdened and costly emergency rooms and hospital wards.

The White House estimates that two-thirds of the costs will be covered by these greater efficiencies in the system.

That leaves one-third of the money to be raised. President Obama has already said that the bill must be "deficit-neutral," meaning that the cost can't just be shoveled into the national debt.

There's no agreement yet, but most proposals suggest that the paychecks of the richest Americans will be targeted with an additional tax or surcharge.

In a recent town hall meeting, President Obama repeated his definition of the richest as people with incomes above $250,000. The House bill defines the richest as individuals earning more than $280,000, or couples making more than $350,000.

At this point, the House is floating the idea of a health care surcharge on the rich, and maybe implementing a couple of obscure tax law changes that would affect foreign multinationals that use tax havens and people who pay foreign taxes on interest.

President Obama has broached the idea of capping tax deductions for the richest Americans.

Others have suggested taxing so-called "Cadillac health policies" that only the richest people get as a job benefit.

Stay tuned this autumn for a major food fight over this.
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