Summary of the Reconciliation Bill (H.R. 4872)

Improves Affordability

Improves the premium subsidy scale for working class families buying insurance in the exchange.
Increases the percentage of medical expenses the insurer is required to cover, reducing the cost-sharing for families.
Delays implementation of the high-cost plan excise tax to 2018 and raises the amount of premiums exempt from the tax. Individual plan costing less than $10,200 and family plans costing less than $27,500 are exempt (compared to $8,500 and $23,000, respectively). Makes further adjustments to these amounts based on inflation experienced prior to 2018, age and gender of a plan's workforce, and for retirees and workers in riskier occupations. Excludes vision and dental plans from the calculation of plan costs.

Improves the employer responsibility framework. For large employers that do not offer coverage, the payment required will be $2,000 per year per full-time employee, instead of $750. The employer payment required is $3,000 per full-time worker that is eligible for a subsidy in the exchange due to an offer of inadequate insurance from the employer. For the purpose of determining which firms qualify as large employers, part-time workers' hours are calculated as full-time equivalents, based on a 30-hour full-time work week. For large employers, 30 employees are disregarded from the calculation of the penalty payment.
Modifies the individual responsibility contribution. The penalty is the greater of a flat amount or a percentage of income. The full contribution (beginning in 2017) for people without insurance is the greater of $695 (individual)/$2,085 (family) or 2.5% of household income. This contribution is phased in.
- 2014: $95 or 1% of taxable income
- 2015: $325 or 2% of taxable income
- 2016: $695 or 2.5% of income
- Exemptions are granted for families with income below the tax filing threshold ($18,700 for a married couple) and for other hardship reasons.

In 2010, seniors who reach the Medicare Part D donut hole will receive a $250 rebate.
Closes the Medicare Part D donut hole completely by 2020.
Eliminates the overpayments to Medicare Advantage plans and bases more of their payment on quality and beneficiary satisfaction ratings.
Additional fraud and abuse protections in Medicare.

Increases federal Medicaid funding to the states.
- All states will be paid 100% of their costs for expanding their Medicaid eligibility to the newly-eligible populations in 2014, 2015 and 2016. The federal contribution will be phased down to 90% in 2020 and beyond.
- For states that previously expanded coverage to the new "mandatory eligible" population, their federal match rate will be gradually increased to 90% over the 2014 to 2019 period.
- The special increase for Nebraska is eliminated.
In 2013 and 2014, provides federal funds to set Medicaid payment rates for primary care physicians equal to 100% of Medicare payment rates for primary care services.

Broadens the tax base for Medicare Hospital Insurance (HI) by adding a 3.8% tax on investment income, excluding distributions from retirement accounts, for individuals with incomes over $200k and family income over $250k, beginning in 2013.

Applies additional consumer protections to grandfathered plans, including pre-existing condition exclusion limits, elimination of excessive waiting periods, prohibition of lifetime limits, prohibition of rescission, and expanded dependent coverage.
Up to $1 billion in implementation funds are authorized, subject to appropriations.

Download this fact sheet in Word format or PDF format.