Democrats’ goal of passing health care reform early next year took a big step toward becoming reality Thursday, when the Senate passed its version of the legislation. But though the bill would reshape many aspects of the U.S. health care system, very few people would see changes right away.
Even if Congress can work out its differences between the House and Senate legislation and deliver a final bill to President Obama early next year, most major aspects of it wouldn’t go into effect until 2013 (in the House bill) or 2014 (in the Senate bill).
Which aspects of the bill would wait? Well, among many others: The health insurance exchanges where the uninsured could shop for coverage; the federal subsidies to help people afford it; the new regulations that would bar insurers from refusing customers or charging them higher rates based on preexisting conditions; and the requirements that every individual carry health insurance, and that medium and large-sized employers provide it. Many of the new fees and taxes that would help pay for reform, on the other hand, would go into effect more quickly. In the Senate bill, that includes immediate new fees on the pharmaceutical industry and medical device manufacturers, among others — fees that could raise health insurance premiums, some analysts believe. “There’s going to be an expectations gap, no question about that,” Drew Altman, president of the Kaiser Family Foundation, [told the Associated Press](http://www.google.com/hostednews/ap/article/ALeqM5iYgWjNDSjwAo-nyO-TSW-LWEHkHAD9COSVM80). “People are going to see their premiums and out-of-pocket costs go up before the tangible benefits kick in.” And in 2013, one year before the rest of the reforms in the Senate bill go into effect, a new tax on high-cost “Cadillac” health plans would begin, along with an increase in the Medicare payroll tax for people who make more than $200,000 per year or families that make more than $250,000. In the House bill, a new 5.4 percent surtax on high wage earners — individuals who earn more than $500,000 or families that earn more than $1 million — would begin in 2011, two years before the major reforms in the bill take effect. Although most reforms won’t take effect right away, some people will see significant changes quickly. Beginning in 2010, for example, dependent children up to age 26 (in the Senate bill) or 27 (in the House bill) could stay on their parents’ insurance. Some new insurance industry regulations would begin in both bills, including a ban on insurance companies setting lifetime caps on benefits, and a ban on the practice of “rescission,” in which insurers retroactively cancel customers’ coverage after they are diagnosed with an expensive disease. In the Senate bill, insurers would also be immediately barred from denying coverage to children based on pre-existing conditions. Seniors would also see a small immediate change, as both bills begin to close the Medicare Part D prescription drug coverage “donut hole” by $500 in 2010. Both bills also provide $5 billion in funding for a temporary national “high-risk” insurance pool that will last until the new insurance regulations go into effect in 2013 or 2014, to provide a place for people with pre-existing conditions to look for temporary coverage. Finally, in the Senate bill, some tax credits for small business begin right away — meaning those businesses could be more likely to offer insurance to their employees. In 2010, businesses with fewer than 25 employees would be eligible for credits of up to 35 percent of their contribution to employee premiums (the credits ramp up to as much as 50 percent in 2013).