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Deal on health bill is reached
Those costs would be more than covered by nearly $400 billion in new taxes over the next decade and by nearly $500 billion in spending reductions, primarily cuts to Medicare, the federal health program for people 65 and older. All told, the package would reduce federal budget deficits by $132 billion by 2019, according to the nonpartisan Congressional Budget Office.
Over the long term, the analysts predicted, the package could reduce budget deficits even more sharply, slicing as much as $1.3 trillion from projected deficits between 2019 and 2029. That would represent a significant improvement in long-run savings compared with the bill approved by the House and a measure previously crafted by Reid.
Democratic leaders worked for days to hammer out a deal with Nelson. They reached a tentative agreement late Friday night. Under the deal, states could choose to prohibit abortion coverage in plans offered through insurance exchanges that the bill would set up for people who lack coverage through their jobs. The compromise is less restrictive than the abortion language contained in the House bill.
Nelson also secured full and permanent federal funding for his state to extend Medicaid eligibility to everyone below 133 percent of the federal poverty level. The bill would require all states to do so, but Nebraska alone would not be required to pay a portion of the additional cost after 2016. And he won concessions for some nonprofit insurers and for providers of supplemental Medicare coverage from a new insurance tax, and he was able to roll back cuts to health savings accounts.
Other Democrats also won important changes. Reid added $10 billion for community health centers to provide services to low-income people. That funding had been a top priority for Sen. Bernard Sanders (I-Vt.), a liberal champion of the public option.
The revised Senate bill would require every American for the first time to obtain insurance or face a financial penalty for failing to do so. Those without access to affordable coverage through an employer would be eligible to apply for federal subsidies and shop for coverage in the new state-based exchanges, starting in 2014.
The legislation would allow private firms for the first time to offer insurance policies to all Americans across state lines on the exchanges. Those plans would be negotiated through the Office of Personnel Management, which handles health coverage for federal workers and members of Congress.
Starting immediately, insurers would be barred from denying coverage to children with preexisting conditions. A total ban on the practice would take effect in 2014. Lifetime limits on coverage would be banned, and annual limits would be restricted until 2014, when they, too, would be banned entirely.
Insurers would be required to justify rate increases, and patients would have the right to appeal denials of claims to an independent state board. All insurance companies would be required to spend at least 80 cents of every dollar they collect in premiums on delivering care to customers.
All but the smallest employers would face fines of as much as $750 per worker if even one employee sought federal help to buy a policy. But at the behest of other Democratic skeptics, including Sens. Mary Landrieu (La.) and Blanche Lincoln (Ark.), Reid made changes to offer additional assistance to small businesses.
To appease fiscal conservatives, Reid strengthened cost-containment provisions by expanding the scope of an independent Medicare advisory board, empowering it to implement cuts if costs grow faster than an inflation-based target after 2019.
The package would rely on nearly $400 billion in new taxes, including a 10 percent tax on indoor tanning salons to be paid by the customer, and an increase in the Medicare payroll tax for people earning more than $200,000 a year and families earning more than $250,000.
And the majority leader rewrote a proposed fee on insurance companies to exempt nonprofit firms that spend at least 92 percent of premiums on medical service, a change that would benefit firms in Michigan and Nebraska. That change, made at the request of Nelson and Sen. Carl M. Levin (D-Mich.), seeks to identify and reward "good actors," Senate aides said.