Health Reform FAQs

Frequently Asked Questions about the House and Senate Health Insurance Reform Bills


The majority of Americans have affordable health insurance and are happy with their doctor. Why do we need to “fix” the system?

Democrats claim that Americans who like their health care coverage will be able to keep it. Republicans disagree.  Who’s right?

President Obama said health care reform can’t add to the deficit. But Republicans claim reform will cost trillions. Who’s right?

How would a public plan work?

Would the health care bills before Congress require me to obtain health insurance?

I own a business. Would I have to provide health insurance to my workers?

I buy my own insurance. How would the legislation affect how much I pay?

I can't afford health care coverage. What happens to me?

Would the health bills reduce my out-of-pocket costs?

I can't get insurance now because I have a pre-existing condition. Would that change?

I’m over 65. How would the legislation affect seniors?

Will my taxes go up to pay for this?

What will I see right away in this bill?

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Q: The majority of Americans have affordable health insurance and are happy with their doctor. Why do we need to “fix” the system?

  • Even if your insurance is affordable now, it will not be in a few years if Congress does not act.  In 2000, family health insurance purchased through an employer cost $6,772 and consumed 13.5 percent of median family income.  In 2008, the same family health insurance cost $12,680, an 87 percent increase over the 2000 cost and approximately 21 percent of median family income.  In 2016, the same insurance is projected to cost $24,291, nearly double the 2008 cost, which will consume 45 percent of projected median family income.  Unless Congress takes action, few families will be able to afford such exorbitant costs.
  • Even if you have health insurance when you are healthy, your insurance may drop you when you become sick.  Currently, health insurance companies cancel your policy retroactively when you become sick, even when you have paid your premiums regularly.  This common insurance industry practice, called “rescission,” is horrifically unfair, and it would be outlawed by both the House and Senate health insurance reform bills.
  • Reform will cover millions of uninsured Americans. Although the majority of Americans have affordable health insurance, at least 46 million Americans are left uninsured.  Insured American families pay a “hidden tax” of $1,100 on their health insurance premiums due to the unpaid costs of care for the uninsured.
  • Without meaningful health care reform, American businesses will not be able to compete. U.S. manufacturing firms are at a competitive disadvantage due to high health costs, which average $2.38 per worker per hour.  These costs for our major trading partners average just $0.96 per worker per hour.  Unless these costs are brought under control, American firms will continue to be at a disadvantage.

Q: Democrats claim that Americans who like their health care coverage will be able to keep it. Republicans disagree.  Who’s right?

  • If you like your health care coverage, you can keep it.  The health care reform bill recognizes that a large number of Americans are happy with their doctor and their health insurance coverage.  For these Americans, nothing will change.  They will continue visiting their regular doctor, and they will be encouraged to continue their health insurance policies. 
  • Health care reform encourages employers to maintain existing policies.  The health care reform bill would make it more difficult for employers to drop existing coverage by charging employers that do not offer insurance a fee.

Q: President Obama said health care reform can’t add to the deficit. But Republicans claim reform will cost trillions. Who’s right?

  • Improving health care in America requires investments – and those investments must and will be fully paid back.  According to the nonpartisan Congressional Budget Office, the health care reform bill that has been introduced in the Senate would actually reduce federal deficits by $130 billion over the next ten years.
  • The health care reform bill saves money by imposing fees on those companies that will benefit the most from reform, slowing Medicare cost growth, and emphasizing prevention and wellness programs that will prevent expensive care in the future.

Q: How would a public plan work?

  • Americans in the small group and individual market will have the option of selecting health coverage from a publically-run plan. The public plan would be offered through the health insurance exchange and would compete on a level playing field with private insurance plans that in turn would reduce costs and improve services.
  • Premiums for a public option would be competitive because this plan would not have administrative costs, such as marketing, advertising, executive salaries, and profits, that many private plans have.

Q: Would the health care bills before Congress require me to obtain health insurance?

  • Under the Senate health care reform bill, no one would be required to obtain unaffordable health insurance.  If the cost of obtaining insurance exceeded 8 percent of your income, you would not be required to purchase insurance. 
  • Starting in 2014, however, Americans who could afford insurance would be required to purchase health insurance coverage or face a financial penalty. The Senate penalty for not having coverage would be $95 in 2014, $350 in 2016 and $750 in 2016 and indexed thereafter.

Q: I own a business. Would I have to provide health insurance to my workers?

  • Under both the House and Senate bills, employers would be incentivized, but not required, to provide health insurance.
  • Under the House bill, companies with annual payrolls above $750,000 would have to either provide insurance or pay a fee equal to 8 percent of payroll. The fees would be lower for firms with payrolls between $500,000 and $750,000; companies with payrolls smaller than $500,000 would be exempt.
  • Under the Senate bill, employers wouldn't be required to provide coverage. But if any of their workers got government assistance in getting insurance, the employers would have to pay an annual fee of $750 for each of their employees. Companies with fewer than 50 workers would be exempt.

Q: I buy my own insurance. How would the legislation affect how much I pay?

  • Individuals would be able to purchase coverage through new state or national "exchanges" – regulated marketplaces that would offer several standardized types of plans from a variety of insurers and possibly a government-run option. New rules would bar insurers from varying premiums based on health status or gender, but would allow differences for age, geographic location and family size.
  • Some individuals with lower incomes would be eligible for subsidies to help cover the cost of health insurance.
  • The non-partisan Congressional Budget Office estimates that premiums will stay about the same for those who purchase insurance through their employers.  For those who purchase insurance individually, premiums will rise by 10 to 13 percent, but the quality of coverage will improve dramatically.  For the majority of those who purchase insurance on the individual market, the premium increase will be more than offset by subsidies.

Q: I can't afford health care coverage. What happens to me?

  • Under the Senate bill, if you make up to 133 percent of the poverty level, or $29,327 for a family of four, you would be eligible for Medicaid, the state-federal program for the poor and disabled. Those making a bit more – 150 percent of the poverty level - would be eligible under the House bill. Both bills would expand Medicaid.
  • If you aren't eligible for Medicaid, you could be eligible for government subsidies to help buy insurance. Under both the House and Senate bills, the assistance would be made available for people with incomes up to four times the poverty level, or about $88,000 for a family of four.
  • The subsidies would kick in once premiums exceed a certain percentage of annual incomes. That threshold would be on a sliding scale, with people at higher incomes expected to pay 12 percent of their incomes for insurance under the House bill and 9.8 percent under the Senate bill. But those thresholds would rise in future years if premiums grew faster than incomes—a likely scenario that would result in smaller subsidies down the line.
  • These subsidies are not available if your employer provides coverage - except if your company expects you to pay a very large portion of the premiums. In that case, you can forgo your employer's coverage, buy insurance directly and be eligible for subsidies.

Q: Would the health bills reduce my out-of-pocket costs?

  • The legislation provides new protections. Under both the House and Senate bills, for example, insurers could no longer impose annual or lifetime limits. In addition, under the House bill, individuals would not pay more than $5,000 a year for deductibles and co-insurance. Families would have a $10,000 limit. The Senate bill sets higher limits. How much so won't be clear for a few years, but if the law were in place today, the caps would be $5,950 for individuals and $11,900 for families. Under both bills, out-of-pocket costs would be set lower for most people who qualify for government premium subsidies.
  • Under this legislation, many preventative services, such as checkups, immunizations, and recommended mammograms will be available without a co-pay.
  • The bottom line is that if you have exorbitant medical expenses now, you will probably pay less in out-of-pocket costs under the legislation. But if you shell out a few thousand dollars a year and do not qualify for government help, your out-of-pocket costs might not change under either bill.

Q: I can't get insurance now because I have a pre-existing condition. Would that change?

  • Yes. Both bills would stop insurers from rejecting applicants with medical conditions once the exchanges are operational – 2013 in the House bill and 2014 in the Senate version. The bills create a temporary subsidized high-risk pool that would start immediately so that people who have been rejected for coverage and others with pre-existing medical conditions have access to affordable coverage.
  • It would also immediately shorten the time - from a year to three months - that insurers could exclude coverage of certain pre-existing medical conditions under group policies. Both bills would also bar insurers from retroactively canceling policies of individuals who fall ill with costly conditions for reasons other than fraud.

Q: I’m over 65. How would the legislation affect seniors?

  • Under both bills, government payments to Medicare Advantage, the private-plan part of Medicare, would be cut back. If you are one of the 10 million beneficiaries covered by those private plans, you might lose benefits such as free eyeglasses, hearing aids and gym memberships.
  • However, both bills would eliminate all Medicare co-payments on preventive services, such as screenings for colon, prostate and breast cancer. In addition, the Medicare prescription drug benefit would be improved under both bills.

Q: Will my taxes go up to pay for this?

  • It depends how much you earn - both bills would increase taxes for affluent Americans.
  • The House would impose a 5.4 percent surtax on individuals earning more than $500,000 a year and couples making more than $1 million.
  • The Senate bill would increase the Medicare payroll tax by 0.5 percent for individuals with annual incomes of over $200,000 and couples earning more than $250,000. It would also tax insurers on health policies with premiums over $8,500 for individuals and $23,000 for families.

Q: What will I see right away in this bill?

  • A ban on life-time limits and restrictions on annual limits
  • A subsidized high risk pool so that people with pre-existing conditions can get coverage
  • Prescription drug assistance for seniors
  • Tax credits for small businesses
  • No co-pays for preventative services
  • Assistance for early retirees
  • Limits on how much insurance companies can spend on profits and overhead
  • Ban on arbitrary termination of coverage